Information Asymmetry and Tribal Bonds
Gavin Clarkson, Department of Finance
As separate sovereign governments, Indian tribes, like state and local governments, have an obligation to improve the lives of their citizens. Unlike state and local governments, however, tribal governments are more limited in their ability to access the capital needed to fulfill their obligations. For state and local governments, issuing tax-exempt debt in the form of bonds for infrastructure development – roads, water treatment plants, and even convention centers – continues to play a catalytic role in stimulating local economic growth, as it has for nearly two centuries. Tax-exempt debt can simply be issued at lower interest rates. Unfortunately, federal law limits the ability of tribal governments to issue bonds. Section 7871(b) of the Internal Revenue Code requires tribal tax-free bond proceeds to be used only for “essential governmental function[s],” a restriction not applicable to state and municipal bonds.
Complete Article: Information Asymmetry and Tribal Bonds
Minimum wage: Implications of recent research
Christopher A. Erickson, Ph.D., New Mexico State University
Minimum wage is in the news. President Obama has proposed an increase in the federal minimum wage from $7.25 to $9 per hour. A bill in Santa Fe, introduced during the 2013 regular session, would amend the New Mexico constitution to adjust the state minimum annually based on changes in the consumer price index. The minimum wage in Albuquerque was increased by a vote of the people to $8.50. At $10.55, Santa Fe, has the second highest minimum wage in the country, behind only San Francisco.
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Christopher A. Erickson
It is nearly impossible to find good news to write about. Economic growth statewide and in Las Cruces continues to lag. The state ranked 49th out of 50 states for the fourth month in a row, beating only West Virginia in job growth. Las Cruces is losing jobs at a rate of 3.4 percent, year-over-year. Meanwhile sequestration seems to be almost inevitable.
Complete Article: Talking Points