The last time we addressed the massive online retailer Amazon.com, New Mexico’s political leadership was falling all over themselves (along with economic development staff nationwide) trying to get the “HQ2.” To the surprise of no one New Mexico was not chosen as the HQ2 location which instead went to the DC area and New York (which AOC and her acolytes successfully pushed out).
But, in writing the posting yesterday about New Mexico charging GRT on online sales AND shipping I started to wonder whether the GRT might be keeping Amazon out of New Mexico entirely. Well, Amazon certainly isn’t going to tell us WHY they do not have a fulfillment center in New Mexico, but you can find a list of their fulfillment centers worldwide here.
Notably, New Mexico is completely absent from that list. Will New Mexico get an Amazon fulfillment center? Is the GRT at least partially-responsible for their lack of investment in the State? Whatever the cause, you can see a regional map of Amazon’s fulfillment centers that Rio Grande Foundation put together. New Mexico’s absence is noteworthy.
On this week’s podcast discussion Paul and Wally take a closer look at the New Mexico Gross Receipts Tax. Why is this tax so problematic? How does the tax inflict harm on New Mexico’s economy while also encouraging the growth of government? Is momentum building for change? The Albuquerque Journal recently editorialized in support of reform.
With New Mexico luxuriating in billions of dollars worth of oil-generated revenues, it is high time to address this economically-harmful tax.
On July 1 New Mexico began forcing online consumers to pay gross receipts taxes. While the Rio Grande Foundation has never supported such a policy we were resigned to the fact that New Mexico’s voracious policymakers would choose to unlock this revenue source. Currently the tax is 5.125% which is the Statewide rate. Local GRT rates will be tacked on starting in 2021.
Of course online sales themselves are not the only cost of buying things online, there are shipping costs to consider. And, as this article from Avalara notes (and the map below illustrates) New Mexico is one of the States which charges taxes on the shipping component of online sales.
So, next time you make that purchase online and wonder why it costs so much more, thank the Legislature and Gov.
The leading proponent on Bernalillo County Commission, Commissioner Hart-Stebbins, had a very enlightening (and public) discussion about the County’s efforts to force businesses to comply with their proposed paid leave mandate lest they be “ineligible” for County contracts.
According to the Albuquerque Journal, Hart-Stebbins told Dale Armstrong of TLC Plumbing at the recent Commission meeting “It’s just kind of an interesting irony that we had somebody talking to us today opposing our sick leave ordinance who now is asking for county dollars.”
The comment was made in reference to a County contract for “on-call” plumbing services the Company provides for the County although Armstrong showed up to speak in opposition to the paid leave mandate being considered by the Commission (although his company provides paid sick leave).
The County Commission appears to wish to require any business contracting with the County to offer mandated benefits (like paid leave), but Hart-Stebbins’ public statement should be seen for what it is: a not-so-veiled threat against a prominent business leader who happens to disagree with her on policy.
To be fair, Hart-Stebbins ultimately voted to approve the contract in the end, but is this really the way government should operate? Finally, while emergency plumbing services are clearly an appropriate service for government to contract out, this episode illustrates the danger of big government. When businesses must kowtow to government officials lest they put their business in jeopardy they tend to “go along to get along.”
One year ago (on June 27, 2018), the US Supreme Court handed down its decision in Janus v. AFSCME which recognized that government employees throughout the United States should not be forced to pay union dues or fees as a precondition of employment.
Mark Janus, pictured below with RGF president Paul Gessing, visited New Mexico earlier this year.
The issue of worker freedom remains extremely important (and controversial in some quarters). The Rio Grande Foundation worked with a coalition here in New Mexico to get 10 of New Mexico’s 33 counties to adopt legislation based on the principles of Janus for private sector workers before those laws were overturned by the liberal New Mexico Legislature.
And, in Congress, H.R. 1154, the Public Safety Employer-Employee Cooperation Act was introduced just recently. That bill would repeal Janus rights for public safety workers. Other legislation in Congress would allow government employees in ALL US states to unionize regardless of state laws on that matter.
The issue of worker freedom remains salient in New Mexico and across the nation. While New Mexico’s elected officials remain firmly in the camp of organized labor, the Janus decision remains a huge victory for thousands of New Mexico workers and millions of others across the nation.
According to KOB Channel 4 job growth in New Mexico exceeded the national average for the first time since 2013. That growth was driven by particularly strong growth in the “mining and construction” category.
But, over the past year (from April 2018 to April 2019) the picture isn’t so pretty once you narrow the job numbers down to the four largest cities in New Mexico and compare them to our neighbors as a whole. See the chart below which is the four New Mexico cities tracked by Bureau of Labor Statistics compared to the city averages from BLS for New Mexico’s neighbors.
The difference is quite stark and tracks with similar data the Foundation posted on this site back in February. Beating the national average is great, but New Mexico is not the average state. It is in the fastest-growing region in the nation and has experienced one of the greatest oil booms in memory. It is also surrounded by some of the most economically free states in the nation.
The Rio Grande Foundation supports free market policies. New Mexico Voices for Children is on the left of the political spectrum and usually support more government. There are vast areas of disagreement but I believe that in the end New Mexicans across the political spectrum ALL want New Mexico’s children to do better.
That’s why it is so disappointing that Voices for Children is using the annual “Kids Count” report it publishes with the support of the Annie E. Casey Foundation to sharpen political axes rather than working to ensure that New Mexico does the best it can for its children.
Upon release of the “Kids Count” report, the group’s executive director James Jimenez stated that New Mexico’s ranking of 50th, “Was a real failure by the Martinez administration to invest in youth, children and families in a way that made much of a difference in terms of these kinds of rankings.”
But Jimenez himself notes elsewhere that New Mexico was ranked 49th before Martinez took office. Bill Richardson was Martinez’s predecessor (and Mr. Jimenez’s previous boss).
One can quibble with many aspects of the Martinez Administration and its policies, but it’s not as if New Mexico children were doing great relative to those in other states before she took office. And, if Voices were being more realistic and less political they might point out that Martinez struggled mightily during her 8 years in office to get any of her policy reforms through a hostile, Democrat-controlled Legislature. It is after all the Legislature that makes economic policy in New Mexico and the Legislature has been under Democratic control for a vast majority of New Mexico history. They get no blame from Voices however.
The report itself covers numerous variables and is pretty good overall despite a few quibbles (is it really critical that 3 & 4 year old children be in school, for example). It is hard to argue that children in poverty or without parents working steady jobs are good things (two more variables). We also agree completely that 4th graders should be able to read (a Martinez priority) and 8th graders should be proficient in math. Ironically, you never hear Voices folks discuss one of the report’s 16 variables which is “Children in Single-Parent Families.” Perhaps “old-fashioned” advice on marriage and family formation is not seen as “progressive” enough.
The fact is that a majority of the Kids Count report tracks and relays what we already know: New Mexico is an economically impoverished state with some major social issues driven in part by the breakdown of the family. We don’t need this report to know that these are long-standing issues in New Mexico. Even if you take the report at face value and as 100% accurate, it is hard to criticize one person, the head of one branch of New Mexico government for all of these failings.
We at the Rio Grande Foundation disagree with most of Voices for Children’s policy objectives. They see more government programs and more spending as the likely solution for nearly all of the issues raised in the report. My Foundation sees New Mexico’s problem as a lack of free markets and economic freedom leading to poverty and dependency. Our solutions involve more choice for parents and children in education, and a limited role for government welfare programs so as to not encourage dependence on them or the replacement of family and community with government. Finally, we support government getting out of the way of businesses and entrepreneurs in ways that encourage the entrepreneurial spirit and private sector growth.
No matter what you believe New Mexico’s problems with child outcomes are deep-seated and complicated. We are all responsible for solving them and it is simply unfair and unwise to blame one politician for our failings or to expect some new government program to solve them.
Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility
Alongside some other local business leaders I shared some of the Foundation’s concerns about the paid sick leave mandate being considered by Bernalillo County Commission and expected to be voted on by Tuesday, June 25.
A brief description of concerns from opponents can be found in this recent Albuquerque Journal opinion piece.
As soon as Tuesday night the Bernalillo County Commission may vote on a mandatory paid sick leave proposal. You can go to the website Trickleave.org to contact your commissioners on this important issue.
But activist Bob Gore of the newly-formed “East Mountain Conservative Outreach” has collected signatures from dozens of East Mountain businesses opposed to the mandatory paid sick leave ordinance. The County ordinance would apply to “unincorporated” areas of the County which are mostly concentrated in the East Mountains and South Valley although all commissioners will be voting on the proposal. Commissioner Pyskoty is the new-ish representative of the East Mountains which has traditionally been a conservative bastion in the County.
As the head of the effort Bob Gore said, “Albuquerque voters rightly turned down a similar mandate in 2017. I find it hard to believe that small businesses in rural East Mountain communities should be forced to bear the costs of mandatory sick leave that their competition in incorporated areas like the Village of Tijeras and City of Albuquerque will not bear.”
The Group’s release can be found here.