Spaceport Claims Don’t Add Up

The following appeared in the Las Cruces Sun-News on February 12, 2020.

A study released recently by the consulting firm Moss Adams made headlines with the rather implausible claim that Spaceport America began producing net economic and fiscal benefits for New Mexico as early as 2013. Since its anchor tenant, Virgin Galactic, has yet to launch a single manned space tourism flight, the Rio Grande Foundation undertook a detailed critique of these claims, relying on the audited financial statements from the Spaceport Authority and Capital Spending Records.

Using these publicly-available data along with information from the Moss Adams report which were not previously available (such as estimates of Virgin Galactic’s spending on employee relocation), we estimate the Spaceport project has cost taxpayers roughly $275 million while generating just $54.3 million in income over the last 12 years. The Spaceport’s audited financial statements do not list any revenue other than taxes and transfers from the State government before 2015, making the 2013 breakeven date presented to the media especially egregious.

Only some very creative accounting can turn a $221 million dollar loss into a net profit, but no one has ever faulted paid proponents of more government spending for a lack of creativity. The report seems timed to gather support for a significant hike in tax dollars appropriated for the Spaceport. Notably, the most “pessimistic’ scenario imaginable in the Moss Adams scenario analysis projects “only” $81.25 million of additional financing. Runway extensions, hangars, and other infrastructure have been added on to the facility over the years and (as we learn from the Moss Adams report) there are millions of dollars worth of taxpayer-funded infrastructure projects to come at the facility.

One of the biggest problems with the Moss Adams report is it considers the $100 million collected and spent by various Southern New Mexico counties as a positive in the overall return on the facility. It is true that construction companies were hired and projects were undertaken at the facility with that $100 million, but what about the $100 million in foregone economic activity on the part of taxpayers and businesses who saw their gross receipts tax burdens go up in order to fund the Spaceport?

This report, like so many other “economic impact studies,” relies on a controversial tool known as “input-output modelling,” a favorite for lobbyists and consulting groups eager to show credulous politicians that $100 million for a new sports stadium will create an economic renaissance in the area. These models take in more sober revenue calculations, and multiply them by arbitrarily determined “multipliers,” which inflates the benefits based on little more than faith and fancy math.

So-called economic “multipliers” are problematic under the best of circumstances, but one of their worst problems is when their impact is calculated only after the money is taxed away by the government. Ignoring the economic impact of allowing people to keep their own money not only stretches logic, but such mental gymnastics could be used to make any government program look like a winner for the economy.

At this point, we at the Rio Grande Foundation are not calling for the State of New Mexico to sell this facility as we have in the past. In fact, like most New Mexicans we also hope for a successful manned flight out of Spaceport America in the near future.

But, to call the facility a financial success before the primary purpose for which it was constructed rings false on its face. And, to use this as a talking point to request even greater access to taxpayer funding in the near future is to base important economic policy decisions on faulty information. We in New Mexico should know better than most that new government spending programs are not the ticket to prosperity. After a decade of broken promises, it’s well past time companies like Virgin Galactic stopped asking taxpayers to pick up their tab.

Seymour is a policy analyst with New Mexico’s free market think tank, Rio Grande Foundation

Print Friendly, PDF & Email

We support pension reform, but not taxpayer-funded lobbying

As the bi-partisan 25-15 vote on the Senate floor in support of SB 72 which significantly overhauls New Mexico’s PERA public employee pension system, this issue has created a number of “strange bedfellows.” RGF and various groups of public employees have largely been on the same side. And, that is good news for keeping the system solvent.

But,  support for the reform doesn’t mean that we support fire fighters (on taxpayer-paid time) using their equipment (paid with taxpayer money) to head to the Capitol to lobby in support of the bill. An anonymous tipster alerted us to the fact that firefighters from Albuquerque and Santa Fe (at least) were doing this on a regular basis as the reform bill made its way through the committee process.

After all, 99% of the time RGF is fighting alone or nearly alone against taxpayer-funded lobbying efforts. The last thing we need is for tax dollars to be used to be diverted away from public safety and fire prevention and towards lobbying (no matter how much we may agree with their efforts in this particular instance).

The mayors of Santa Fe and Albuquerque should step in and make sure that from here on, no on duty, in uniform, firefighters are allowed to spend their day at the Roundhouse.  They have a job that taxpayers are paying them for, it’s called public safety. Lobbying for their own benefit should always be done off duty.

Check out a few photos below:

Print Friendly, PDF & Email

Tipping Point New Mexico Episode 170: Pricey Travel, Legislation and RGF Freedom Index

On this week’s podcast discussion, Paul begins by discussing the Foundation’s recent post-Oscars interview on KOAT Channel 7. The issue involved an Albuquerque City Councilor’s pricey travel at taxpayer expense.

Wally and Paul spend the rest of the podcast discussing the 2020 New Mexico Legislative session and various good and bad bills that are moving and not moving forward in the session. This includes the Foundation’s tracking software known as the Freedom Index which can be accessed through the RGF website.


Print Friendly, PDF & Email

Some bad bills go down in Santa Fe

A few weeks ago we labeled SB 110 (introduced by left-wing Democrat Sen. Mimi Stewart) “the worst bill of 2020.” And although there may have been one or two worse bills (such as the ban on fracking), we felt that this one had a realistic chance of passing into law because it represented a massive giveaway to government employee unions who are one of the Democrats core constituencies.

Thankfully local governments around New Mexico who would have been most negatively impacted by SB 110 were not fooled and turned out in Senate Judiciary to oppose the legislation which had (in a sneaky move) been amended at the last second (RGF was in attendance as well). That  was in important victory for sanity in Santa Fe, but we will be watching to make sure this bill doesn’t rise from the dead.

Another truly awful bill was HB 173 which was introduced by another left-wing Democrat Rep. Matthew McQueen). That bill would have raised New Mexico’s gas tax from 17 cents/gallon to 47 cents/gallon. Sadly, it drew support from a contingent of young people driven by fear of climate change, but thankfully those on the Committee weren’t interested in tripling the State’s gas tax.

These bills are some of the worst of the worst. And, while HB 173 was unlikely to pass in an election year, it is good to see it (and SB 110) dead at least for this session.


Print Friendly, PDF & Email

SB 5 isn’t just a “red flag” bill, it’s also a giveaway to trial attorneys

SB 5 (you can read the latest at this link) isn’t just a “red flag” bill to allow the confiscation of guns, it is also a giveaway to the trial bar. A sneaky line in the bill states “failure to comply with duties established pursuant to state or law” would allow liability.

Perhaps this is an effort to demand compliance from reluctant law enforcement agencies, but it could also allow for a great deal of legal shenanigans.

Image may contain: possible text that says 'NM Shooting Sports Association @NM_SSA Under SB5, a law enforcement officer who refused to issue a gun confiscation order could be sued by the petitioner. Both of the bill's sponsors Daymon Ely and Joe Cervantes are personal injury attorneys; they could personally financially benefit from the bill. #nmpol #nmleg #2a 3:32 PM· • 10 Feb 20 Twitter for Android'

Print Friendly, PDF & Email

RGF and KOAT Channel 7 question City Councilor’s costly family vacation on taxpayer dime

In case you missed the story which appeared after the Academy Awards show on KOAT Channel 7, check it out here. The gist of the situation is that Albuquerque City Councilor Klarissa Peña took a very expensive trip with her family to the East Coast on the taxpayer dime. She says her fear of flying caused her to take the train, but it is clear that the taxpayers wound up picking up the tab for a variety of family expenses. Worse, the expenses were pre-approved by the City.

Using city documents, Target 7 did a breakdown of the trip. This is what taxpayers paid for:

$3,290 for train trips.
$960 for daily meal allowance.
$2082 for hotels.
$18 for cab fair.

That totals more than $6350. You can watch the full story by clicking on the picture below: 

Print Friendly, PDF & Email

Freedom Index 2020

The Rio Grande Foundation’s Freedom Index is back for the 2020 legislation session. Keep track of your legislators and how they vote on key legislation.

Visit the Freedom Index anytime at:

Here’s how it works:

Basically, legislation is scored on a scale of -8 (very bad) to +8 (very good). When a legislator votes on legislation, how they vote gets added into their score.

Example: if a bill is ranked as -2, and a legislator votes no, their score goes up by +2. Similarly, if a bill is ranked as +2, and a legislator votes yes, their score goes up by +2.

We’ll continue to track key legislation until the end of the session, February 20. Stay informed!

Print Friendly, PDF & Email

Tipping Point NM Episode 169 Len Gilroy – Pension Reform and an outsider’s view of the New Mexico Legislature

On this week’s interview podcast, Paul brings Reason Foundation pension expert Len Gilroy on to discuss the latest developments in pension reform in the Legislature. Len appeared on episode 121 of the podcast to discuss the need for pension reform.

Now, SB 72 and other pension bills are moving their way through the Legislature. Len has been to the Roundhouse in New Mexico twice to discuss pension reform with legislators of both parties. He shares further details about the pension debate as well as his experiences in the Legislature on this episode

Print Friendly, PDF & Email

Reporter covers Taxpayers Bill of Rights discussion (relatively fairly)

Milan Simonich is the roundhouse reporter these days for the Santa Fe New Mexican. As such he is generally left-of-center and we at the Foundation have not always seen eye to eye with him in terms of his coverage. But, in his recent article “DOA: Taxpayers Bill of Rights Goes Nowhere in a Hurry” he is not unfair. He DOES miss or ignore several important facts.

While Simonich does not appear to be a fan of Colorado’s TABOR, he neglected to mention that back in November Colorado’s voters decided to keep TABOR in place overwhelmingly 56-44.

He also failed to note the stark differences between Colorado’s booming economy (especially since 1992) and New Mexico’s slow-population and economic growth and relative poverty not just to Colorado but to the rest of the nation. How would Simonich (or House Speaker Egolf who was quoted in the article) answer those points)? It’s hard to say, but there is no doubt New Mexico lags badly behind its neighbors despite the oil and gas boom. And we know that can’t last forever.

Government Spending by State in Percent GDP (Fiscal Year 2019)

Print Friendly, PDF & Email