President Trump and his Administration are taking a hatchet to unnecessary government spending in Washington. This effort was clearly going to have an impact on New Mexico which (according to USA Facts) is the 2nd-most federally dependent state in the nation. To that end, Gov. Lujan Grisham has ALREADY stated that she plans to call a special session to address federal cuts, particularly to the Medicaid program.

The President is 100% correct to target Medicaid for cuts. For example, New Mexico plans to increase Medicaid spending in the FY 2026 budget alone by “$3.3 billion to $15.5 billion, a 27% jump” according to this recent AP article. The federal government picks up approximately 72% of New Mexico’s Medicaid budget while the State’s share is about 28%.

This federal subsidy has led to New Mexico politicians to “scam” Medicaid for many years. For example, in 2024 New Mexico adopted the “Health Care Delivery and Access Act.” Under the law, “The state law will assess a tax on hospitals — a larger tax on big hospitals — pool it, leverage those funds for a federal Medicaid match, then bring about $1.5 billion in total funding back to New Mexico to provide sustainable reimbursement to our state’s hospitals.” In other words, by manipulating the Medicaid formula the State of New Mexico will fleece taxpayers in the other 49 states out of $1.5 billion.

It is no surprise given New Mexico’s political inclinations that the State would have a positively huge Medicaid population. Indeed, according to the Legislative Finance Committee 47% of the State’s population is on Medicaid. Other analyses place New Mexico as the highest Medicaid receiving state in the nation. But some in the Legislature would like to expand Medicaid eligibility in New Mexico even more. The health care benefits of massive Medicaid spending are

It is time for the Trump Administration to prevent states like New Mexico from misusing the Medicaid system to take advantage of taxpayers in other states. If that means New Mexico using a portion of its massive oil and gas budget surpluses to pay for Medicaid at least New Mexico won’t be fleecing taxpayers in other states (as badly).

Data for the following chart can be found here and here and in the AP article mentioned above (here). 

After being the stumbling block for Paid Family and Medical Leave in 2024 the New Mexico House passed a somewhat scaled back but potentially insolvent plan (HB 11) on Friday afternoon. While a thorough financial analysis is still lacking the LFC’s analysts found that the “high” and “moderate” update scenarios would result in deficits (see page 6). In other words, the tax hikes contained in the bill are only the start under the most likely scenarios and that is barring some kind of negative stock market shock since the funds collected will be invested in the stock market.

The vote board is below and this bill will be scored “-8” in the Foundation’s Freedom Index.

On this week’s interview Paul sits down with attorney, activist, and author Ilya Shapiro. Shapiro worked at the libertarian Cato Institute for more than a decade and attempted a career change to Georgetown Law School. Sadly, a factually accurate but “controversial” post on social media got him into hot water and caused nationwide controversy including at Georgetown Law. The dustup caused Ilya to look elsewhere for employment and also resulted in his new book “Lawless: The Miseducation of America’s Elites.” You don’t want to miss this informative conversation!

Under its current leadership the Rio Grande Foundation has been involved in the Legislature for many years. there have long been serious problems with the process, but those problems seem to be getting worse. These legislative processes used in Santa Fe hinder public involvement in the process and leave legislators uninformed about the impact the bills being considered in Santa Fe will have on citizens.

Whether this is by design or not, it is important to understand that the public is not really welcomed to the process.

Here’s the situation:

Committee chairs are clearly under pressure from leadership to move bills along as quickly as possible. Among their tactics is dramatically limiting public comment. Repeatedly and in nearly ALL committees on very controversial bills, Democrat committee chairs often limit comment to a handful of individuals or a very limited time period. This is the case whether the testimony is being done in person or online.

• More than once the chair has limited testimony to “the first 10 people” in line at the microphone or some number. One committee chair on HB 11 (paid leave) limited testimony to 10 people after seeing 42 hands raised in opposition setting off a dramatic and potentially dangerous rush to the microphone. Imagine being elderly or disabled and traveling to Santa Fe to testify on a bill only to be literally outrun by younger participants.
• In addition to limited numbers testimony is often limited to as little as one minute.
• Zoom testimony is both limited AND participants are ignored. While Zoom testimony is one of the best things to happen to the legislative process in Santa Fe, being on the call on time and raising your “Zoom” hand to testify but never being recognized. Zoom testimony is also extremely limited on the most important bills.
• Bills are shifted around the calendar. You’d think with all of the time limits and efforts to move the process along that bills would be heard in a relatively timely fashion in a manner that respects the time of those who travel to Santa Fe to participate in the democratic process. Sadly, bills are continuously “rolled” to the next meeting and meeting times are changed at the last second.

These are just a few of the significant issues relating to the process for people who attempt to testify in Santa Fe. The rules are set by the majority party. If the Democrats who have run Santa Fe for decades actually care about “democracy,” they need to act to solve some of these process to really serve the people of New Mexico.

Originally placed in Los Alamos Daily Post. By Paul Gessing, President, Rio Grande Foundation.

New Mexico’s Legislature continues to meet in Santa Fe. Sadly, it continues along the same trajectory it has been on in recent years where the government spending grows while also keeping more of our money and (often) adding an ever-increasing number of taxes for us to pay.

For starters, the House recently passed a budget that increases spending across all areas of New Mexico government. An amendment was offered by Republicans to rebate a portion of the money ($600 each) to average New Mexicans. The plan was rejected by Democrats.

That’s by no means the only plan offered in Santa Fe to reduce burdens on New Mexico families. I had the opportunity to present expert testimony on HB 275 which would have eliminated New Mexico’s personal income tax. Nine other states have no income tax. Two states (Alaska and New Hampshire) have no income or sales tax. Having no income tax would instantly make New Mexico competitive with other states for investment, business relocation, and economic growth.

Sadly, plan after plan to return some portion of New Mexico’s current budget surpluses has been rejected by Democrats in the Legislature. This, despite New Mexico having $13.5 billion in general fund revenues with the House-passed budget totaling “only” $10.8 billion.

Clearly, New Mexico has plenty of money, but where is it going? Aside from 6 percent spending growth this year and 70% growth since Michelle Lujan Grisham took office, the State is simply hoarding cash. According to a recent article in the Santa Fe New Mexican the State Investment Council now has a mind-blowing $61 billion under its management.

This may seem like a good thing, but it isn’t.

For starters, New Mexico has plenty of serious problems that could be addressed by returning some of this money to taxpayers. The State’s economy is widely known to be too dependent on oil and gas revenues. New Mexico’s population is among the poorest states in the nation with nearly half its citizens on Medicaid.

New Mexico also has a rapidly aging population that has not grown much (especially relative to its neighbors) for years. This is unique in the fast-growing American southwest which is home to some of the fastest-growing states in the nation. Clearly it is driven by public policy decisions out of Santa Fe.

Specifically, one of the bills that seems likely to become law this session is HB 417. The bill would impose a new “point of sale” tax on alcohol of 6% on top of numerous other taxes. The bill is being pitched as a way to reduce the harms of alcohol abuse, but it was amended in committee to exempt New Mexico brewers, distillers, and winemakers. Exempting in-state producers from a tax increase that is supposed to reduce alcohol abuse makes no sense.

Many bills moving in the 2025 legislative session would impose further taxes on New Mexico individuals and businesses at a time of unprecedented prosperity (and spending) for the State.

At the Rio Grande Foundation we support the oil and gas industry and think it will continue to supply jobs and tax revenues to New Mexicans for decades to come. But if you believe that oil and gas are on their way to irrelevancy, shouldn’t we use these revenues to diversify our economy now?

Paul Gessing is president of New Mexico’s Rio Grande Foundation, a research and educational organization dedicated to limited government, economic freedom and individual responsibility.

For more than a decade the Rio Grande Foundation has rated bills in the New Mexico Legislature based on their impacts on constitutional freedoms, tax burdens, education choice, regulations, whether they are pro/anti-energy, and numerous other factors relating to whether they make New Mexicans freer or less free. You can find the full Freedom Index here. Click on the votes of individual legislators. Votes are happening every single day of the session, so these numbers are changing and will wind up very different by the end of the 2025 session which will be on March 22nd (and can’t come soon enough).

You can find out which legislators are yours (you’ll have one in the House and one in the Senate). If you see specific votes that you disagree with, please consider sending an email to your legislator. 

Here is a screenshot of what the Freedom Index looks like. You can click on it to go to the Index itself:

Paul and Wally share the latest from the Roundhouse. Paid Family Leave is revised and heading for the House floor. HB 417 a revised alcohol tax of 6% has passed through the House Tax Committee on partisan lines.

Free speech is under attack in Santa Fe: In a bit of good news SB 4 (net zero) was tabled in the Senate Finance Committee.

RGF’s president had an article in National Review about the disaster that would be Deb Haaland as Gov. of New Mexico. Former Las Cruces Mayor may run for Gov. He says he’s “do things 90% differently than MLG.” Will changes to New Mexico voting law impact this race? Paul and Wally discuss.

Despite numerous dire challenges facing New Mexico the Legislature has no solutions besides shoveling money into various “permanent funds.” New Mexico now has $61 billion under SIC control.

Another fabulous Trever cartoon highlights (just some) of the good bills that get no love from the hyper “progressives” in Santa Fe. Sadly, plenty of bad bills ARE moving quickly.

The event is all about tax reform at both the federal and state levels. RGF’s President Paul Gessing will be discussing how to reform New Mexico’s tax code given the fact that the State has massive budget surpluses. What can be done to improve New Mexico’s tax structure? How should we think about taxes and tax reform? Are there realistic solutions given New Mexico’s status as a “blue” state?

Additional discussion will take place involving the Trump Tax Cuts, their economic importance, and what New Mexicans can do to get them done!

It is being put on by Americans for Prosperity New Mexico. Details below:

Date: Saturday March 8th.

Time: 11:30 a.m.-1:30 pm.

Location: 3339 Central Ave SE suite G, Albuquerque, NM 87106

This is a Protect Prosperity Event sponsored by Americans for Prosperity.

Enjoy a delicious catered lunch.

* RSVP to Bobbi Curtis @ 505-385-5564 by March 6.

HB 476 is another in a long line of bad ideas that have been put forth in legislation during the 2025 session here in New Mexico. Thankfully, to date, it has received little interest, but that could easily change in the 2nd half of the legislative session.

This bill would prohibit interchange fees on electronic payment transactions in New Mexico. Thus, the State of New Mexico would be in charge of controlling the price of operating a credit card network – risking higher costs for consumers in a time of continued inflation.

The bill mirrors federal attempts to impose price controls on operating credit card networks (these have been opposed by the Rio Grande Foundation). Analyses of federal bills, such as the federal Credit Card Competition Act, consistently find that consumers will not benefit from future savings under these policies. A report from the Government Accountability Office, for instance, stated that if similar regulations that apply to debit cards “had not been implemented, 65 percent of noninterest checking accounts offered by covered banks would have been
free.” Additional regulation on credit interchange will affect fees and interest in the credit market, thus increasing costs for consumers.

Additionally, a Federal court partially granted an injunction to banks in an Illinois case which held that the state prohibition on interchange fees applies to Illinois chartered financial institutions, but not other banks. While state-chartered institutions received no injunctive relief, larger banks managed to successfully argue against interchange fee regulation. States that pass analogous laws will only hurt local banks chartered within their borders while leaving larger financial institutions with an unfair
advantage.

Price controls levied on interchange fees are diametrically opposed to free market principles. All legislators should oppose such laws and any attempt at price controls for credit cards.
Under HB 476, the government would insert itself into this functioning system and try to make one party bear the full burden of the costs of operating a card network by preventing payment processors from applying the usual interchange fee to the full amount of a transaction. Like every government attempt to control the market, there will be unintended consequences. If processors are forced to create new systems, software, and even new equipment, costs for small businesses and consumers in New Mexico

would rise. These added costs will be placed on the processing system, merchants will pass them down to consumers, and everyone will lose.

Schrödinger’s Cat is a famous thought experiment that demonstrates the idea in quantum physics that tiny particles can be in two states at once until they’re observed. What does that have to do with public policy in New Mexico? Simple, yesterday the New Mexico House voted to pass a $10.8 billion budget. Republicans attempted to reduce spending somewhat while offering $600 rebates to ALL New Mexicans. While we would rather have permanent tax cuts rebates are superior to keeping ALL the money in government coffers or spending it.

The kicker is that Democrats claimed (as reported by the ABQ Journal) that rebates were a violation of the State’s anti-donation clause.

That’s laughable because Democrats are CURRENTLY pushing for $3,000 payments to new parents under HB 11. Not to mention the fact that Democrats have given New Mexicans rebates during both the Lujan Grisham and Richardson administrations. Now, rebates are suddenly against the law?

Instead of helping New Mexicans with a small portion of New Mexico’s amazing oil-and-gas largesse we are now told that the State is sitting on a mind-blowing $61 BILLION under control of the State Investment Council alone. Awhile back on the pages of National Review we noted that New Mexico is a rich state with poor people. This session is only reinforcing that reality.

The Albuquerque Journal’s John Trever remains the best political cartoonist New Mexico has ever seen and his latest cartoon from Sunday’s paper is no exception. The following illustrates how New Mexico’s Legislature consistently kills off good policy ideas for no apparent reason. Of course, the electorate continues to accept/embrace the same bad policies pushed by so-called “progressives.”

Trever could have easily added several bills including school choice or education accountability, spending restraint and reducing government waste, limiting the Gov.’s “emergency” powers, and preserving traditional/affordable energy (to name just a few).

SB 4 would destroy New Mexico’s economy if it becomes law. It would impose “net-zero” policies on New Mexico’s economy ending the State’s oil and gas industry and pretty much ever aspect of New Mexico’s economy, thus making the state a complete economic basket case. If you don’t think “net zero” will have a profound, negative impact on New Mexico, check out this from energy expert Robert Bryce who recently was in London where “net zero” is the law of the land:

The letter RGF signed is below. Read the full text by clicking here or on the letter:

Paul recently sat down with Americans for Prosperity’s new state director for New Mexico Sarah Hetemi.They discuss what AFP does and is doing here in New Mexico especially during the ongoing legislative session (and how you can help) as well as what their plans are nationally in terms of issues like the Trump tax cuts and education choice. Paul and Sarah then move on to discuss Sarah’s personal journey from Norway to Alaska and now to New Mexico.

AFP is one of the Rio Grande Foundation’s most important partner organizations. You don’t want to miss this conversation!

The following appeared at National Review Online on Friday, February 21, 2025.

Democrat Deb Haaland recently announced her candidacy for governor of New Mexico. Haaland was most recently secretary of the interior under Joe Biden. She previously served as the U.S. representative for New Mexico’s first congressional district (Albuquerque area) from 2019 to 2021 and as chair of the New Mexico Democratic Party from 2015 to 2017. Haaland is a registered member of the Laguna Pueblo of Native Americans.

That last part of her biography, being a Native American, is why she has moved up the Democratic Party ladder in New Mexico. Even from an honest left-wing perspective, Haaland’s rise has little to do with achieving anything significant in her recent positions of power. Rather, her rise is attributable to her ethnic background and her reliable support for left-wing policies.

During her one full term in Congress, she rated an “F” by the National Taxpayers Union (also here). In Congress, she supported boondoggles like the “Green New Deal” and opposed fracking on federal lands. Nothing in her congressional track record stands out as particularly thoughtful, nor did she deviate from the typical government-first approach of modern “progressives.” She was just another hard-left vote.

Perhaps more notable than any vote or legislation, while in Congress Haaland said that students from Covington Catholic High School had displayed “blatant hate, disrespect, and intolerance” when they were confronted by a radical left-wing activist after a pro-life march in Washington, D.C.

A lawsuit brought by student Nick Sandmann (a student who was unfairly pilloried and labeled a racist by numerous media outlets) against CNN was settled for $275 million. A similar libel lawsuit brought by students of the school that called Haaland’s words “false and defaming” was dismissed on the grounds that her statements were made in the scope of her employment as a legislator.

Armed with a nondescript but reliably left-wing record in Congress and her identity as a Native American, Haaland was chosen by the Biden administration with the express purpose of her becoming the first Native American cabinet secretary and by definition the first Native secretary of the interior).

The Interior Department includes both the Bureau of Indian Affairs and Bureau of Indian Education, which of course further led to the Biden administration’s desire to place Haaland in this critical role. But Interior is a sprawling government agency that includes numerous swaths of federally managed lands including those under the Bureau of Land Management (BLM).

The BLM oversees more than 247.3 million acres of land, or one-eighth of the United States’ total landmass. The agency manages the federal government’s nearly 700 million acres of subsurface mineral estate located beneath federal, state, and private lands severed from their surface rights by the Homestead Act of 1862. Most BLM public lands are located in Western states including my home state of New Mexico, where the BLM is the largest land manager in New Mexico, managing 13.5 million acres.

With the Biden administration having pledged to attack the oil and gas industry at every opportunity, Deb Haaland as interior secretary was thus placed in a position to carry out the anti-energy policies of the administration — even if that meant attacking the economy of her home state.

As secretary of the interior, Haaland controlled access and leases and permits for oil, gas, coal, mining, timber, and ranching. In 2022, oil and gas produced from federal lands accounted for about 11 percent of U.S. oil and 9 percent of U.S. natural gas. Increasing production on those lands is one of the simplest tools the federal government has available to address prices at the fuel pump. But as prices at the pump rose rapidly under the Biden administration, Haaland instead attempted to squash American energy at every turn.

There are numerous cases of Haaland’s anti-energy approach, but one fascinating case was her denial of oil and gas development at Chaco Canyon National Historical Park in New Mexico. Haaland arbitrarily imposed a massive 10-mile buffer zone around the park. Thanks to Haaland (and Biden of course), federal oil and gas leasing is now prohibited in this 336,400-acre area.

While non-Natives and many living outside New Mexico may be under the impression that policies supported by one group of Natives would automatically be supported by others, that is not the case. In fact, Haaland’s Chaco radius was unpopular with significant numbers of Navajo tribal leaseholders in the area.

Many Navajo who preferred economic development and the financial benefit of leasing their mineral rights protested Haaland’s move. In fact, when Haaland arrived in the area for a photo op, her motorcade was blocked and the event was canceled.

What would a Haaland governorship mean for New Mexico? Simply put, it would be a disaster. New Mexico already suffers from nearly a century of misguided “blue state” governance. Since 1930, Republicans in the state have never held both houses of the legislature and the governorship at the same time.

Despite being the second-leading producer of oil in the nation after Texas, New Mexico is one of the poorest states. Little in the way of economic reform or tax reduction has taken place despite multibillion-dollar state budget surpluses in recent years. New Mexico has also ranked dead last in the National Assessment of Educational Progress (“the nation’s report card”) for two cycles running (2022 and 2024) despite rapid growth in education spending. Crime is a serious issue, as is broader dependence on government and the nation’s highest percentage of Medicaid recipients in the nation.

Sadly, Haaland would likely be even more aggressive than current Governor Michelle Lujan Grisham in doubling down on all the things that have made New Mexico an impoverished, slow-growing outpost in the American Southwest.

Paul Gessing is president of New Mexico’s Rio Grande Foundation, 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.

I testified yesterday on a bill that would eliminate New Mexico’s income tax. Here’s what I said and here’s what happened. Speaking of zero income tax states, IN & OUT burger chain moves to Tennessee from California.

PFML will finally be considered in its 2nd committee on Wednesday. Paul and Wally discuss what that means.

NM Democrats seem to have settled on a plan to raise alcohol taxes.

SB 139 which would have eliminated MLG’s EV mandate was defeated in its first committee on partisan lines.

A “study” claims UNM athletics creates a big economic benefit for New Mexico. We appreciate collegiate sports but take the study with a big grain of salt.

How’s the NM “Portfolio” doing? We have an update.

New Mexicans spend 6th most on groceries as a percent of income according to a new report.

After weeks of delay sponsors of HB 11, formerly Paid Family and Medical Leave, the bill has been reintroduced under the same number but with some significant alterations. You can read the newly minted “Welcome Child and Family Wellness Leave Act” for yourself. It is an attempt to placate businesses which have been (and remain) nearly universally opposed to HB 11 by whatever name.

We’ve looked closely at the bill and have put together a few thoughts:

It now provides 6 weeks per year, except for welcome child leave, which allows for up to 12 weeks.

Contributions from businesses and employees start out somewhat lower but can rise starting in 2030.

The revised bill ADDS a $3,000 welcome child refund, to be paid to one of the child’s parents each month for the three months immediately following the birth or adoption of the child for a total of $9,000.

The biggest problem with the revised bill is that the numbers just don’t add up. It is impossible to tell if the plan will be solvent in the future with the numerous different figures being thrown about and a lack of actuarial analysis.

What IF the program is insolvent? Is there an assumed source of revenue to make up the difference? The bill limits how quickly premiums can be raised. Shouldn’t there be a backstop if the plan is insolvent? As the original FIR notes: Other states have had to increase their payroll taxes to cover increasing utilization of their PFML programs. Washington State’s rate has increased from 0.4 percent to 0.92 percent since the start of the program due to high usage. Actuarial studies in Washington predict the rate will reach its statutory cap of 1.2 percent by 2028. Rhode Island, Massachusetts, California, and Rhode Island have all experienced rate increases.

Democrats remain steadfastly opposed to allowing Social Security to invest in the stock market to generate increased returns for recipients but the bill calls for these funds to be invested by the state investment officer.” So, if the stock market tanks?

Then, “an applicant shall not be required by the Welcome Child and Family Wellness Leave Act to use any leave consecutively.” So, someone can take off work, come back to work for a few weeks, and then take off again????

Finally, why even include self-employed New Mexicans? Being self-employed by itself implies a willingness to take on a certain amount of risk. Why bother with them one way or the other? Worse, self employed individuals only need to pay into the fund for six months to qualify for benefits, opening the door for people, especially those who are expecting a child or have upcoming medical needs, to pay in for six months, claim the benefit, and then opt out of the system.

This bill remains an expensive and dangerous tax hike on New Mexicans and New Mexico businesses. Sadly, it appears to be heading to the House floor after recently passing out of the House Commerce Committee with all Democrats except Rep. Marian Matthews supporting and all Republicans opposed.

As passed by the Senate, S.B. 85 would worsen New Mexico’s already objectionable donor reporting requirement for independent expenditures (IEs). The bill brazenly doubles down on a law the Rio Grande Foundation (RGF) is currently challenging in court for being unconstitutionally overbroad.

• Background and Ongoing Litigation. The existing law that RGF is challenging requires any organization that spends more than $3,000 on IEs in connection with a non-statewide race,
or more than $9,000 on IEs in connection with a statewide race, to publicly report any source of “contributions” to the organization of more than $5,000 during an election cycle.
Crucially, IEs include not only election campaign ads, but also any messages that merely refer to a candidate within 30 days before a primary or within 60 days before a general election
that are targeted “to the relevant electorate.” This includes messages asking elected officials to support or oppose legislation or take a stance on a policy issue.

• Chilled Speech. The existing law already chills organizations’ speech about issues. Citizens give to their favored causes with the expectation of privacy, and nonprofits shouldn’t have to
choose between speaking out about issues that are important to their mission and their supporters and violating those individuals’ privacy. This is especially so in an age of “cancel
culture” and weaponized government when New Mexicans can be targeted for retaliation based on the causes they support.

• Junk Disclosure. The existing law already results in junk disclosure by associating donors on public reports with messages they did not necessarily support or intend to fund. New
Mexicans give to nonprofit causes for countless reasons and rarely give specifically for the purpose of paying for particular communications.

• An Attack on Personal Privacy. S.B. 85 doubles down on existing New Mexico law by replacing the word “contribution” in the statute with the word “donation.” Current law
defines a “contribution” as funds given or received “for a political purpose.” Therefore, an argument could be made that an organization making IEs is only required to report donors
who give “for a political purpose,” even though the context in which the existing law uses this term argues for a broader and general requirement to report all donors. S.B. 85 makes it
explicit that donors who give for any purpose – not just “a political purpose” – are required to be reported if an organization makes IEs.

This is illogical. While the IE reporting requirements purport to be aimed at organizations engaged in some political activities, S.B. 85 makes it clear that donors who give for no political
purpose have to be identified on political activity reports. The intent of the bill seems to be to name and shame donors to organizations that speak out about policy issues and to
deter those nonprofits from voicing their opinion in public debates.

• A Constitutional Quandary. If existing New Mexico law is held to be unconstitutional in the pending RGF litigation, S.B. 85 will be even more unconstitutional because it takes the existing
law being challenged and makes it worse. Even if the existing law is upheld, S.B. 85 may still be unconstitutional because it requires a broader scope of reporting than current law.

We know that New Mexico’s “progressive”-controlled Legislature has zero interest in robust tax cuts or tax reform. But, HB 275 which was introduced by several Republican legislators (with the effort led by Rep. Elaine Sena Cortez of Hobbs) was heard in the House Tax Committee on February 27, 2025. If adopted the bill would eliminate New Mexico’s personal income tax. The comments below are those of RGF president Paul Gessing who provided expert testimony to the Committee in support of HB 275:

For years NM has had massive budget surpluses thanks largely to its booming oil and gas industry. This year is no different. NM has an estimated $13.6 billion in GF revenue while the Gov’s proposed budget is $10.9 billion. That means $2.7 billion left over. And, of course the state is sitting on $58 billion in its sovereign wealth funds and has another $6 billion sitting unspent in capital outlay money.

If you go to page 6 of the Gov.’s budget you’ll find that the State of New Mexico generates $2.1 billion annually in personal income tax revenue. That not only means there is nearly $600 million left over even AFTER the PIT is eliminated.

New Mexico SHOULD eliminate its income tax and even generate additional tax revenues to diversify and grow its non-oil and gas economy. Cutting spending is not necessary and should not be necessary moving forward.

NM has the third highest poverty rate. It has a slower growing population than any of its neighbors and the main business area in its biggest city is struggling. New Mexico needs to do something bold to bring economic growth to the State.

It has the highest PIT in region at 5.9% Colorado is 4.4%, Utah at 4.65%, Texas Zero, Arizona 2.5% Nine states have no PIT, none of them aside from Texas have oil and gas $$ like we do. Two states (Alaska and New Hampshire have no PIT and no sales tax)

According to World population review four of the fastest growing population states in the nation (TX, NV, FL, and WA) have no personal income tax.

Economically speaking things point even more dramatically toward zero income tax stats. In 2023 5 of the top 10 fastest-growing states economically had no income tax. These were Washington, Wyoming, Texas, Alaska, and Florida.

NM has a serious workforce participation rate challenge. Eliminating the income tax as a disincentive to work would help address that issue.

If we are serious about addressing our health care workforce problem these high earners will be more likely to work in New Mexico thanks to no income tax.

And, of course, New Mexico is one of the fastest aging states in the nation. Eliminating the PIT would give New Mexico’s economy a shot in the arm and make it competitive nationwide as a destination for jobs and businesses to locate bringing jobs and economic opportunities.

If you’d like to watch the testimony for yourself you can click here. 

UNM’s athletics department recently announced that it had a study which found that UNM athletics has a $240 million annual economic impact.  Among other impacts, “UNM athletics generates nearly $75.2 million worth of yearly economic activity across Albuquerque, per a study contracted by the department. Over $150 million in local direct and indirect revenue over the last three years was traced to Lobo athletic events, he added, representing nearly a fourth of the total economic impact provided by the department in that span.”

We looked at any number of UNM and UNM athletics websites for the report and were unable to find it. In fact, we have done a IPRA request for the report. So, we relied on the Albuquerque Journal report and the report authors Collegiate Consulting.

While we are indeed sports fans here and we have no particular beef with UNM or NMSU athletics and consider them a great amenity for the locals. We oppose plans to allocate $5 million to UNM/NMSU athletic departments, however. We don’t give this report much legitimacy as an economics document for the following reasons (these are by no means limited to THIS particular report):

1.  It was undertaken by consultants, not economists. Consultants are paid by the customer and will generally give the customer what they want in order to drum up more business. Academics are by no means perfect, but they have a better track record.
2. Advertising value of TV appearances is notoriously subjective as are terms like “direct and indirect revenue.”
3. And of course, where are these $$ coming from? What percentage of Lobo fans are coming from out of state for games? Economic development implies that we are not simply “recycling” existing tax dollars.
4. According to the St. Louis Federal Reserve Bank the Albuquerque Metro area GDP is nearly $60 billion annually. Limited and poor as our economy may be UNM athletics doesn’t really move the needle especially since so much of its inputs are generated through taxes paid by New Mexicans and of course oil and gas.

One interesting note in the coverage of this report is that UNM’s annual athletic budget ($47,763,222) is currently second-to-last in the Mountain West; only San Jose State’s budget ($44,546,781) is lower while San Diego State ($103,930,691) boasts the highest in the league. Whatever the RIGHT number is, there is no doubt that New Mexico’s lack of a strong, diversified economy negatively impacts this situation.

On this week’s interview Paul talks to return guest, author, and commentator Philip K. Howard about DOGE. For advocates of limited government DOGE is the most exciting effort to cut wasteful spending and bring functionality to the federal government that we have seen since at least the Grace Commission during the Reagan Administration. Howard and Gessing have a robust discussion of DOGE and numerous aspects of its mission and activities so far. They address whether Congress will go along with DOGE, whether there are more effective potential ways to streamline government, and whether this effort will ultimately succeed. More information about Philip K. Howard’s work can be found at his Common Good website and at his recent Manhattan Institute paper.

After weeks of the legislative session and a year after their plans to hike the state alcohol tax fell apart, it looks like the left-wing legislators pushing for an increase in the gas tax have settled on a plan as outlined in  House Bill 417 that “would retain the current tax levied on the volume of alcohol sold, and add a 6% sales tax to alcohol purchased in restaurants, stores, and other places that sell alcohol to the public.”

As RGF wrote recently in an article distributed statewide, New Mexico’s alcohol taxes are hardly low and as a whole New Mexicans are not particularly big drinkers. But, in classic New Mexico fashion, this bill dramatically increases prices for all drinkers and since it is a 6% tax at the point of sale it is yet another “regressive” tax levied on hard working New Mexicans.

This is a newly filed bill with a long way to go in the session, but with agreement among these bickering so-called “progressives” it has a path to likely passage.

New Mexico’s legislative session is in full swing, but with far-left Democrats in firm control of all levers of power it is unlikely that New Mexicans will receive any significant broad-based tax relief. Instead, among many other things that will happen with the money, New Mexico will plan on subsidizing a few chosen businesses rather than helping New Mexico families and businesses in a substantive way.

That’s why we have come up with the “New Mexico portfolio.” That portfolio includes EBON solar, Maxeon (MAXN) solar, and Virgin Galactic (SPCE). It would be hard to come up with a worse group of stocks than the following. This data on stock returns is from Yahoo Finance and it was collected mid-day on February 12, 2025.

Rather than spending money on specific “chosen” businesses, the Rio Grande Foundation advocates creating a low tax rate economy with reasonable regulations and (hopefully) a prepared workforce. These three businesses have lousy rates of return no matter how you look at it.

Super Bowl: game wasn’t so great, but great to see America celebrated and Trump cheered.

A bill relating to expanding Medicaid is moving through the session. This is madness!

Now MLG is the education reformer? This one is a doozie!

I went on KOAT 7 to discuss a crazy bill that would hand our tax dollars to UNM and NMSU to pay athletes.

HB 11 PFML remains bottled up in committee. Some lawmakers even blame us for “bullying.”

A bill to increase royalties (taxes paid on oil and gas) is moving through the Legislature.

A recent op-ed running across New Mexico by our policy analyst Carter Swanson ran in the ABQ Journal last week.

HB 275 which would eliminate New Mexico’s personal income tax immediately and completely will be heard in the House Taxation and Revenue Committee on Wednesday morning. This bill is one of the very best that will be considered in the Legislature this session. The PIT generates an estimated $2.1 billion annually for New Mexico so it is extremely odd to see the fiscal impact report place a $3.8 billion initial “cost” to the State’s coffers on the tax. Obviously, some amount of economic growth and diversification will generate tax revenues, but we’re not even talking about that. RGF rates this bill +8 (our highest ranking).

Anyway, we plan to testify and would encourage you to do so as well.

HB 184 would provide an annual $1,000 “rebate” to every man, woman, and child in New Mexico (not just this year, but for years to come).  The bill is being heard Wednesday morning in House Government and Indian Affairs. Perhaps the most interesting thing is that this bill is being sponsored by very left-wing Democrat Rep. Patricia Roybal Caballero.  RGF rates this +5.

The following bills are being heard in Senate Tax, Business and Transportation Committee tomorrow afternoon:

SB 20 would increase taxes on tobacco (see how much based on different types here). Tobacco taxes are highly regressive meaning they impact the poor the most. RGF rates this -6.

SB 89 would remove planned future tax hikes on cannabis. The current 12 percent cannabis excise tax rate would be maintained in perpetuity. RGF rates this a +3.