Tipping Point New Mexico Episode 151: Rep. Jason Harper – Gross Receipts Tax

On this episode, Paul sits down with Rep. Jason Harper. Jason is one of the most knowledgeable people in the New Mexico Legislature when it comes to taxation and especially the horrendous New Mexico Gross Receipts Tax. Jason and Paul discuss the disastrous 2019 legislative session, the oil boom, and the opportunities it poses for New Mexico.

Finally, Jason has some hopeful news on the issue of GRT reform in the upcoming 2020 session. If you want to know why the GRT is a problem for New Mexico’s economy and what can/must be done about it, this is a must-listen episode.

 

No, New Mexico doesn’t need a gas tax hike

The following appeared in the 11/27/19 edition of the Las Cruces Sun-News.

As we move toward 2020 and the start of the short, 30-day legislative session, there are some who want the big-spenders in Santa Fe to raise taxes once again on hard-working New Mexicans.

In 2019, the Legislature, despite a massive surplus, passed the largest tax hike in New Mexico history. Although this was completely unnecessary, a portion of that money supposedly went to improving our roads. If that is still inadequate, there is plenty of surplus revenue sloshing around in the Roundhouse to ensure that roads across New Mexico are improved.

The following are five specific reasons not to raise the gas tax.

  1. It is no secret that New Mexico is in the middle of historic budget surpluses with general fund spending (thanks to record oil production) booming from $6.3 billion to nearly $8.0 billion. That’s a 27% increase in just two years. There is plenty of money available to build and repair roads, especially in Southeast New Mexico where roads have been impacted by the incredible oil and gas growth.
  2. The tax hikes adopted in 2019 just increased taxes with $52 million annually going to roads starting this year. That number will rise in the years to come. It would be premature to raise taxes so quickly after taxes were raised “for roads” just this past year.
  3. New Mexico should stop wasting $30-plus million annually on operating the Rail Runner. Ridership on the train is vanishingly small and wastes money that could otherwise be used for road maintenance. To keep spending money on this boondoggle while also calling for higher taxes is ridiculous. Transit is in decline nationwide. The sooner we realize this and stop spending money on it, the better.
  4. Gas taxes are “regressive.” Not only do the poor allocate a greater percentage of their incomes to paying such taxes, but low-income folks also drive older, less fuel efficient cars.
  5. Finally, although the current political situation in Santa Fe is unlikely to result in needed reform of New Mexico’s labor laws, the fact is that reforming the state’s Davis-Bacon “prevailing wage” law could result in cost reductions for a variety of transportation projects including roads (and schools). A 2017 fiscal analysis from the Legislature found that legislation that would simply have reduced the impact of New Mexico’s law would have saved New Mexico’s Department of Transportation between $20 million to $22 million annually based on 2017-2018 active construction projects.

New Mexico government is already bloated and the state is considered the worst run in the entire nation according to a new analysis by 24/7 Wall Street. Rather than just handing more money over to Santa Fe, it is time we expect a little better management of our tax dollars.

Building and maintaining basic infrastructure like roads is arguably the core function of government. It’s right up there with public safety. Even in the very best of economic times (thanks to national economic growth and record oil production) New Mexico state government has a poor track record of addressing those core functions (thus the 24/7 Wall Street ranking).

In particular Republicans must push back with full-throated opposition to raising taxes. Although lacking in power in Santa Fe, there’s a need to step up and provide a reasonable, limited-government alternative to the big-spending liberals in Santa Fe. They cannot yield to calls for still higher taxes whether they are sold as being for road improvements or something else.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility

Tipping Point New Mexico Episode 150 Economic Freedom, School Choice, and More

NM slides to 45th in latest Fraser Institute economic freedom report.

Rep. Javier Martinez calls New Mexico’s education results “tragic” but when asked to support school choice, his response is “tragic.” 

How much more would New Mexicans have in their pockets if we had Colorado’sTABOR on the books?

Proposed hazardous waste fees unnecessary and simply anti-business.

Some claim NM needs to raise the gas tax. 

Finally, the Albuquerque City Council just adopted new regulations and fees on closed captioning on televisions at local businesses. Will the over-regulation never cease? And what are Republicans on City Council doing about it?

RGF submits comments in support of Trump Administration donor privacy regulations

The Rio Grande Foundation is a 501c3 organization under the IRS Code. We operate as a public policy research “think tank” that deals with economic policy issues here in New Mexico. We are based in Albuquerque, New Mexico.

The Rio Grande Foundation supports IRS guidance that eliminates unnecessary reporting requirements for exempt nonprofit organizations. On September 10, 2019, the Internal Revenue Service announced proposed rulemaking to eliminate donor disclosure requirements for certain nonprofit organizations. In 2015, laws regarding gift taxes and nonprofit organizations changed. As a result, there was no longer a tax administration need for the IRS to continue collecting donor information from certain nonprofits. IRS guidance was announced in 2018 stating that those certain nonprofit groups no longer needed to report the private information of their donors, including names and addresses, on Form 990, Schedule B of their annual returns.

Making a donation to support an organization or cause you believe in is a way to express your personal views and exercise your constitutional right to freedom of speech and association. That support can and should be private if that is the preference of the donor.

Whether the case is state and local laws or the IRS regulation that is being revised for the better here, the term “transparency” has been co-opted as an excuse for the government to collect private information – information of no practical use to it – about the activities of ordinary citizens. “Transparency” is a buzzword that should apply to government at all levels and its activities. It is spending our tax dollars and should thus be beholden to the public in ways that average citizens should not.

In our work we have been forced to deal with local campaign finance disclosure legislation that appears to be designed with the intention of making it difficult to impossible for average citizens to engage in public policy debates. Government disclosure requirements should not stifling political speech.

Additionally, examples abound from all over the nation of people who have been picked on and ostracized for donating to a political cause or expressing unpopular political beliefs. The proposed regulations take a small but significant step towards defusing some of the tension created by the unnecessary forced disclosure of personal information.

Of course once it is collected, data can be used and misused. The large-scale collection and storage of donor information is a risky endeavor with potentially serious consequences. There is always the potential for private details to be leaked – either unintentionally by a careless employee, or intentionally by a rogue employee or politician looking for revenge against a political opponent.

For these reasons and others we strongly support the proposed IRS guidance.

If you are concerned about the federal government’s new rules in support of donor privacy comments can be submitted online here no later than December 9, 2019. https://www.regulations.gov/docket?D=IRS-2019-0039

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Closed captioning mandate and the GOP: a sad shade of the same

It is hard to say with a straight face that imposing $250 or $500 fines on restaurants or other public businesses that fail to have closed captioning on their televisions is anything less than massive government overreach. But, that  is exactly what the City of Albuquerque just chose to impose on local businesses. Now, we could easily have the “closed captioning police” running around town playing “gotcha’ with people who are just trying to manage their businesses among the thicket of taxes, regulations, and crime issues.

And, like so many misguided policies that have been adopted in Albuquerque, the closed-caption fees are the product of “bi-partisan” action by City Council. Supposed “Republican” (city council is technically non-partisan) councilors Brad Winter and Trudy Jones voted in support of the ordinance (full text here) while Don Harris was absent (vote results here).

With everything going on in our City it is sad that more ridiculous regulations are being imposed by City Council. Sadder still is the fact that supposedly pro-business “Republicans” who (with the exception of the departed Dan Lewis) all supported the ART boondoggle keep pushing right alongside “progressives” like Pat Davis and Isaac Benton for ever more government.

When are closed captions required by law?

 

 

New Mexico slides to 45th among US states in latest Economic Freedom Report, remains far behind fast-growing neighbors

(Albuquerque, NM) – The latest edition of the Economic Freedom of North America report is out. The report measures government spending, taxation and labor market restrictions using data from 2017, the most recent year of available comparable data.

New Mexico is the 45th most economically-free state in the union, that’s down from 42nd place in the 2018 Index. The report is compiled by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

New Mexico scored 5.17 out of 10 in this year’s report, far behind top-ranked New Hampshire (7.93) and above lowest-ranked New York (4.49), which ranked last for the fifth year in a row. Said Rio Grande Foundation president Paul Gessing, “

“When governments allow markets to decide what’s produced, how it’s produced and how much is produced, citizens enjoy greater levels of economic freedom,” said Fred McMahon, report co-author and the Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute.

Rounding out the top five freest states are Florida (2nd), Tennessee (3rd), Virginia (4th) and Texas (5th). Rounding out the bottom five are West Virginia (49th), Alaska (48th), Vermont (47th) and Oregon (46th). New Mexico was noteworthy in that it lagged dramatically behind its neighbors on economic freedom. Aside from Texas at 5th-freeest, Oklahoma ranked 9th, Colorado 13th, Arizona 20th, and Utah 23rd.

The report also includes an additional all-government ranking, which adds federal government policy to the index and includes the 50 U.S. states, 32 Mexican states and 10 Canadian provinces.

From 2003 to 2017, the average score for U.S. states in the all-government index fell from 8.23 to 7.92. Across North America, in the most-free jurisdictions, the average per capita income in 2017 was 9.2 percent above the national average compared to 3.4 percent below the national average in the least-free jurisdictions.

“Higher levels of economic freedom lead to more prosperity, greater economic growth, more investment, and more jobs and opportunities,” said Dean Stansel, report co-author and economics professor at Southern Methodist University.

Why New Mexico is the worst-run state (hint, it’s the “leadership”)

If you are a reader of this blog and you are on the various social media outlets, you might want to consider following RGF president Paul Gessing on Twitter @pgessing

A lot of the Foundation’s information is distributed online along with interesting news and articles….and sometimes interactions with New Mexico’s political classes.

An issue that has been discussed and pushed by the Rio Grande Foundation since its founding is school choice. Charter schools are one form of choice and we are pleased that New Mexico has them (although Democrats have been persistently attacking them in recent years).  So, I had this short discussion with a very “progressive” state representative on Twitter. Of course, his “solution” is exclusively focused on spending more money and expanding government. Our solution is to improve the existing system via greater competition. But, when you make a salient point you get, “OK, boomer.”

The so-called “progressive” (the dominant wing) of the New Mexico Legislature claims they care about children and educational outcomes, but they are literally fixated on tapping the permanent fund for universal pre-K despite ample research showing that pre-K is not an effective means of improving educational outcomes.

Education is just one of many areas in which New Mexico lags. And, the dominant political party has continued to do the same thing over and over again (spend more money, pick winners and losers) for decades. Until the voters decide to change directions we’ll get more of the same results.

If New Mexico had a Taxpayers Bill of Rights like Colorado’s…every man woman and child would receive $786

This fall, the biggest issue on ballots across the nation was in Colorado where voters in the “blue” state overwhelmingly turned down politicians’ efforts to grow government. The vote was 56 to 44% to keep TABOR in effect.  That vote is one reason why the AVERAGE Coloradoan makes a mind-boggling $17,000 per year MORE than the average New Mexican. 

What is TABOR and why is it relevant to New Mexico? TABOR or (Taxpayers Bill of Rights) is the best single law on the books in any US state in terms of limiting government. It amended the Colorado Constitution to limit annual spending growth (at all levels of government) to the combined rate of inflation and population growth. Money above that needs to be returned to the taxpayers. There other aspects to TABOR including the requirement that a vote be taken ANY time politicians want a tax hike, but for New Mexico these days, with oil and gas revenues flowing into government coffers, it is worth discussing the limit on government revenues.

As can be seen below, when Gov. Martinez left office at the end of 2018 the State’s General Fund budget was $6.3 billion. This year the Legislature is expected to have approximately $8. billion. That’s an increase of nearly 27 percent in just two years.

As illustrated in the chart below, given New Mexico’s slow population growth during that time period and a modest inflation increase of 3 percent, New Mexico government will have grown by an incredible $1.648 billion IN REAL TERMS over just two years. We believe New Mexicans (like their counterparts in Colorado) deserve those refunds. How much are we talking about?

By our calculations, as seen below, every man, woman, and child in New Mexico should be given a $786.49 refund thanks (largely) to the oil and gas industry.  For my family of 5, that would come to $3,932.45. Rather than pouring the money into wasteful government in the worst-run state in the nation, (Colorado is 6th-best BTW), New Mexicans deserve their money back!

New Mexico’s Proposed hazardous waste fee increase will do nothing for environment

No one likes or wants hazardous waste, but so many products we consume and depend on every day result in the creation of some amount of such waste. The disposal of such waste is strictly controlled in the United States and here in New Mexico.

The State’s Environment Dept. has proposed new, costly regulations on hazardous waste, which, if adopted, will take effect in January of 2020. The Environmental Improvement Board (EIB) is an unelected government board here in New Mexico which will be considering new fees to be imposed on businesses which generate hazardous waste. The Hazardous Waste Bureau had proposed the increases early in 2019.

There is currently a fee paid by companies that generate hazardous wastes from their operations. The new fees represent an increase from 100% to 16,600% over the old fee structure.

These fees are expected to cover the administrative and operational costs of the Bureau, but will do little to improve public safety or the environment. There are more than 3,000 companies in New Mexico that generate hazardous waste as a result of normal business operations. The increased fees will likely be used for more inspections (and fines) than for helping the companies cope with the very complicated waste management rules in the State of New Mexico.

They are just another cash grab by State government. The new fee structure will target businesses that produce small amounts of waste but will affect the large waste generators the most. You can read about the regulatory process and how to comment for yourself here.

The proposed fee increases are detailed here.

A webinar that explains the new fees is available at http://EHStips.com/NMED27

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