On this week’s interview Paul talks to Bob Perls. Perls is a former Democrat state legislator and also ran New Mexico Open Elections, and the current chair and a candidate for US Senate from the New Mexico Forward Party. Paul and Bob discuss semi-open primaries along with a wide variety of election issues facing New Mexico. Check it out!
Yesterday it was reported that New Mexico has yet another massive budget surplus on its hands thanks to revenue from the oil and gas industry. The Rio Grande Foundation has been reporting and analyzing New Mexico’s economic situation since long before the oil boom started. We asked the question then (in 2018), “would New Mexico’s politicians squander the opportunity?” The answer appears to be “yes,” but that’s not just our take. Check out this article from Source NM which we consider to be a credible, center/left online journalism organization.
While the article notes massive growth in the State’s sovereign wealth fund which now stands at $75 billion, the fact is that New Mexico’s economy outside of oil and gas and data centers is weak.
Ismael Torres, chief economist for the (LFC), told lawmakers that investment income (from oil and gas $$) is expected to become the state’s second-largest source of state general fund revenue by 2030, surpassing oil and gas revenue as well as personal and corporate income taxes combined.
But forecasters had a warning for lawmakers too. The strength of the state budget is masking weakness in the broader economy.
“We’re still seeing an economy that I would describe as either tepid or maybe stuttering,” Torres told lawmakers. “We’re struggling to find our footing.”He pointed to faltering wage growth and stubborn inflation, while describing investments as the “golden goose for the general fund.”Without them, he said, state revenues driven by the economy are growing very little.
New Mexico’s job market is growing slowly. The state had 5,800 more jobs in June than it did a year earlier. Forecasters expect little improvement overall, projecting employment growth of 0.6% this fiscal year and just 0.2% the following year.
Wage growth is slowing also. University of New Mexico economists recently cut their forecast for wage and salary growth this fiscal year from 4.7% to 3.8%.
Ironically (or perhaps in line with New Mexico’s anti-business attitude and approach, data centers are the other area of New Mexico’s economy (besides oil and gas) that is doing well. The article goes on to note that “Construction-related gross receipts taxes jumped 18.5% in the last fiscal year, fueled in part by data-center construction in southern New Mexico.”
As reported in the Albuquerque Journal New Mexico is sitting on an unexpected $924 million in revenues thanks to elevated oil prices (due largely to the Iran War). While the Gov.’s call for small $250 rebates has been ignored by the Democrat-controlled Legislature, bigger tax reform hinges on the results of the upcoming election in November. Deb Haaland shows no sign of returning money to taxpayers and will likely spend it or dump it into the permanent fund. Candidate Gregg Hull has said he’d like to eliminate the personal income tax. He has bipartisan support for that as Sen. Finance Committee Chair George Muñoz has also called for such a move, but AGAIN, the Democrats’ legislative leadership shows no signs of being willing to embrace broad-based tax reform efforts.
New Mexico collects $2.1 billion from the personal income tax annually. With nearly $1 billion in unexpected money available and an economy in serious need of growth and diversification even a phased in approach to income tax elimination with revenue triggers would be both desirable and possible. But, New Mexico’s “progressive” legislators have never shown an interest in broad-based economic growth or diversification. Changing that would grow the State’s economy and lift New Mexicans out out of poverty. November’s election will have a great deal to say about whether tax reform happens in New Mexico or economic stagnation continues amid an unprecedented oil and gas boom.
Paul is at the State Policy Network meeting in Orlando. What is going on there?
Virgin Galactic slashes payments to Spaceport.
NM Supreme Court puts permits on hold for Project Jupiter.
San Juan County is “open” for data centers though.
DeSantis calls for end to Congressional pensions (maybe for the Legislature as well?).
Will Buc-ees ever come to New Mexico? Not based on these comments.
New Mexico to pay for gender transition surgery with Medicaid pulling back.
The US is levying 50% tariffs on Canada and Canada will retaliate?
According to the website World Population Review, New Mexico’s education spending has accelerated dramatically in recent years and the State now spends more than the national average. When you consider New Mexico’s income levels New Mexico’s K-12 spending ranks 6th-most in the nation. Good, timely information can be hard to find when it comes to education spending data. The Census Bureau doesn’t include everything and takes a long time to publish its data.
World Population Review (the site is worth a look) does a good job and has more timely data. According to them, in 2025 the United States average was $17,619 per pupil. New Mexico spent $17,844, so above the national average. When New Mexico’s income levels are factored in, New Mexico moves dramatically up the list spending 4.17% of its taxpayers’ income on K-12 education.
New Mexico spends vastly more per pupil than any of its neighbors for far worse results.
New Mexico spends: $17,844
Colorado: $15,897
Utah: $11,342
Arizona: $12,003
Texas: $12,444
Oklahoma: $12,162
Can New Mexico improve its dead-last student outcomes? We believe so, but more spending hasn’t done it in the past and won’t do it in the future. The answer is in bold reforms like Mississippi’s and broader school choice.
OK, that’s not EXACTLY what he said, but he implied as much recently. “At a recent store opening he said, “Life’s too short to try to build in places that people don’t appreciate what you’re bringing.” That’s just another way of saying that businesses and money flow where it is welcomed, a concept the Rio Grande Foundation has championed in its work to make New Mexico less poverty-stricken and its people less reliant on both government handouts AND cash.
But, New Mexico’s politicians don’t see it that way. They LIKE it when voters depend on them because that means votes for them and their friends. So, Buc’ees goes to other, neighboring states where it is welcomed. And, if you’ve ever been to one of these stores (and we have), you may be aware that Buc’ees pays VERY well for people with little job experience. Check out the sign below.
Will New Mexico EVER get a Buc’ees as it has (finally) a few In & Out burger places? It makes sense. I-40 is an incredibly busy east-west thoroughfare. But, unless the people and politicians of New Mexico have a change of heart about economic growth and business, we’re resigned to traveling to Amarillo, TX or near Fort Collins, CO (to name two
With the help of our summer interns Isa Thakur (University of Southern California’s Marshall School of Business) and Jamal Witter (Rhodes College), the Rio Grande Foundation held a campus event (at UNM Main) in which we shared a bit about the work of the Foundation and the work we do on behalf of New Mexicans and free markets, prosperity, educational reform, and constitutional government. While most interns are with us during the summer, we have interns throughout the year. If you know a young person who might be interested, you can find the form online here along with instructions for submitting the application.
On this week’s interview Paul sits down with economist and Texas-based free market policy consultant Vance Ginn. They discuss the importance of eliminating New Mexico’s personal income tax. They then discuss the political and policy situation in Texas. Gov. Abbott recently issued a moratorium on data centers. Will a hard-left “progressive” be able to win the Senate seat? Finally, states are considering reforming or eliminating property taxes. What is the right approach? Check out this important conversation!
Virgin Galactic hasn’t launched from the taxpayer-funded Spaceport on June 8, 2024 (more than 2 years ago). The latest statement from the company claims they’ll launch again in February 2027. Originally, the Company had claimed they’d launch by fall of 2026. The Company is also bleeding cash and its reserves are plummeting.
But, Virgin Galactic HAS managed to save money (at the expense of New Mexico taxpayers, of course) by slashing the monthly user fees it pays to the spaceport by 73.5%, from $188,888 to $50,000. That’s an annual loss of $1.6 million. Despite the reduction in revenue, Spaceport America must still maintain the same day-to-day operational support and testing services for Virgin Galactic. According to KRQE 13, the Spaceport will be coming to the Legislature in 2027 for additional funding to bridge the gap.
While the facility cost $225 million to build it has continued to require infusions of cash almost every year. Earlier in the year, for example, the Legislature’s allocated $4 million in capital outlay funds for infrastructural improvements at the facility.
Will Virgin Galactic launch in February of next year? That’s anybody’s guess. Should New Mexicans and policymakers be more careful before allocating taxpayer dollars to big capital projects based on big promises? Of course.
Former Democrat House Majority Leader Sheryl Williams Stapleton convicted on all counts. She was paid by APS while in the Legislature illegally in addition to her corruption.
There are two big problems with Democrats’ primary plans.
Paying the Legislature isn’t a bad idea, but the ballot measure on this fall’s ballots is.
Welcome to NM job creators, get lost!
Rep. Stansbury has some “interesting” takes on NM economy/policy.
Is Secretary of State Oliver actually doing her job? She makes $144,000 annually.
Albuquerque’s effort to sell or use vacant land is worthwhile.
As is so often the case in New Mexico when criminals are not held accountable for breaking the law they simply continue to break the law until or unless they are finally held accountable. But, that often means lives lost and people harmed. Sheryl Williams Stapleton is different in the sense that she was a state legislator, but her illegal behavior was made public long before her corruption scandal.
Take a few minutes to check out this story by Larry Barker of Channel 13 from back in 2011. Barker blew the whistle on Stapleton receiving a salary for her day job with Albuquerque Public Schools while also serving as a state representative in the New Mexico Legislature. At the time, Albuquerque Public Schools Superintendent Winston Brooks said Williams Stapleton’s actions were contrary to the school district’s policy. Yet, Stapleton remained in the Legislature through 2021 when she resigned due to the criminal investigation.
Was there ever accountability for APS? Is APS currently enforcing its policy of NOT paying legislators?
While KRQE focuses inordinate time on whether New Mexico should or should not pay legislators that is a separate question. This was corruption on the part of Stapleton and APS.
Rep. Melanie Stansbury recently gave a talk to the Albuquerque Chamber of Commerce. It was covered in the Albuquerque Journal. Stansbury seems to be both delusional AND clueless at the same time. For starters, check out the following quote from the article: “What happens is we tend to have an economic development opportunity that happens in New Mexico … and because we haven’t invested in the long-term pipeline from pre-K all the way through higher ed for our workforce, we have to look outside of New Mexico for those skilled workers.”
New Mexico has taxpayer-funded pre-K, childcare, has dramatically increased spending on K-12 (despite declining enrollment, and has “free” college. What more does she want?
Stansbury then calls out New Mexico’s infrastructure which is a fair point, but she then goes on to “caution against the strategy of bringing large companies to rural areas to spur economic growth, citing a lack of water and basic infrastructure. Her comments come as a data center, Project Jupiter, is being constructed in Santa Teresa, a small town in Doña Ana County.
“We are going to have to build industries that rely on water in places where water exists in the state, and we should not be building industries in places where there is not water.” Well, the fact is there IS the water. If New Mexico’s leaders were smart (Democrats all like Stansbury) we would be “investing in infrastructure” to treat that water and using it for a variety of economic development purposes.
Finally, for someone in Congress who also broadly shares the philosophy of a Governor who has been in office for 8 years, Stansbury sure seems like she has some big problems with New Mexico’s leadership. She also seems to yearn to be back in the Legislature or (more likely) run for Governor.
New Mexico Democrats have successfully pushed their national party to move the New Mexico Democratic presidential primary vote forward to February 15 from its current June slot. As has been discussed for many years, this will give the Land of Enchantment a greater say in Democratic presidential primaries. Generally speaking that is not a problem although there is no indication that the Republicans will be able to do the same. Also, the Legislature is in session in New Mexico on February 15 which means no campaigning, no fundraising, and basically no way that either party’s legislative candidates will want that kind of date shift for their races.
This means two primaries: one for Democratic Party presidential candidates in February and the rest of the candidates for both parties in June. Who pays the $15 million for the early primary? It shouldn’t be New Mexico taxpayers.
Also, New Mexico JUST had its first ever “semi-open” primary meaning that independents could participate and essentially choose which party to vote for on primary day. In fact, New Mexico hasn’t even had a primary like this in a presidential election year. If Democrats move their primary and Republicans don’t how would that work for the primaries? Moving the primary would seemingly eliminate the opportunity for anyone but registered Democrats to vote in the presidential primaries. After all, an independent could, in theory, vote in the Democrats’ presidential primary in February and then again in June in the Republican primary for president (and other offices).
Needless to say, there are some major questions regarding shifting the primary date that haven’t been discussed. Will Democrats simply ram this through in the upcoming session or will we have an honest discussion about these serious challenges?
While Albuquerque’s population growth has largely stalled in recent years the City still faces challenges with a lack of housing and developable land as the City has become landlocked by the mountains, tribal lands, Air Force Base, and volcanoes. The idea of using or selling off these lands is worthwhile. You can check out the website here. Of course, while our strong preference is for as much land as reasonable to be sold off and used for market housing or other economic uses, that may not always be possible.
As the Albuquerque Journal reports, using its new website the City is hoping to bring more of these vacant lands into use. We applaud the City for this effort and for putting a list of properties together on a website. Hopefully it results in numerous beneficial uses, preferably by the private sector. The County should make a concerted effort to do the same and Albuquerque Public Schools which is seeing annual declines of 1,500 students should have unused properties available as well.
Returning government-owned lands to the private sector, especially those that are unused, unnecessary, or should simply be consolidated (especially since the County bought it’s own headquarters downtown) would be a win-win. Whether the challenge is the housing situation or simply bringing properties back onto the tax rolls (thus lowering taxes for the rest of us) this is a worthwhile effort with numerous benefits.
Click below to check out the City’s website. Perhaps you’ll have a use for City property!
John Lonergan is a Santa Fe-based entrepreneur and venture capitalist with a long track record of successes. He is also a job creator and investor. His current work is as Chairman of American Fertilizer.
He attempted to build a fertilizer plant in New Mexico (near Hobbs) but was thwarted at every turn by the State’s political class. Ultimately he shifted the plant to business-friendly Wyoming.
Paul and John discuss the challenge of entrepreneurship and job creation in New Mexico and why hostility toward entrepreneurs holds New Mexico back.
During the 2025 legislative session the hot topic for Rio Grande Foundation and the business community was another round of push back against an onerous paid family leave program. We won that battle. For what it’s worth, while these battles were fought in the Legislature, it was unclear what Gov. MLG’s views were and whether she would have signed that bill. As it turned out, MLG had her own plans for a brand new taxpayer-funded entitlement program that (as the courts would eventually decide) didn’t even need legislative approval: universal “free” childcare. The program is estimated to cost $850 million annually to start.
The Gov. outlined her plans for taxpayer-funded universal daycare in New Mexico on September 8, 2025. Acting on her own, the Gov. changed New Mexico’s childcare program from covering families up to 400% of the federal policy level ($132,000 in 2026) to make it “universal.” That program took effect on November 1, 2025. The Democrat-controlled Legislature ratified the program with a few additions and changes during the 2026 session.
But, between November 1, 2025 and the end of New Mexico’s fiscal year (June 30, 2026), the program was found to be running a deficit of approximately $83 million. Since then, two whistleblowers have come forward saying they were retaliated against for calling out these deficits. Carmel Pacheco-Aragon: The Early Childhood Education and Care Department’s chief financial officer filed a suit alleging she was placed on administrative leave after reporting an $83 million shortfall for fiscal year 2026 and warning about improper fund transfers without legislative approval. The Department’s former budget director Kimberly Gonzales filed a subsequent lawsuit claiming she was wrongfully terminated for publicly reporting that the department was facing a $258 million shortfall, partially due to the state’s new universal childcare program.
Clearly, MLG’s administration did not want the public to know the program she created was running massive deficits and took retribution on some of the best-placed people that she’d hired to manage the program. Those people can and likely will receive big payoffs (courtesy of New Mexico’s taxpayers) for their troubles. But, New Mexico’s Supreme Court simply ratified the Gov.’s seemingly unconstitutional power grab without so much as a hearing and from a policy perspective that’s all that matters. MLG is getting her way by clearly abusing her power (in multiple ways) and setting a precedent that allows future governors to engage in the same behaviors.
The political and legal incentives to abuse the law in support of an unproven and at best questionable policy is one of MANY reasons why New Mexico is ranked poorly when compared with other states.
As free market advocates who believe in paying people a competitive wage for their work, we’re not opposed to paying legislators. But, that doesn’t mean that any and all plans to pay legislators makes sense.
This November New Mexicans will go to the polls to vote on a number of issues including a statewide constitutional amendment (set in motion by HJR 5) that, if approved, would result in legislators receiving an annual salary tied to the median household income in New Mexico which is about $67,800 annually (adjusted annually for cost of living). As you can see in this chart from the National Conference of State Legislators, this would make New Mexico’s Legislature the best paid in the region by far.
But, the real problem isn’t the proposed salary, it’s the fact that it would come on top of BOTH the existing per diem payments of $202 per day PLUS mileage reimbursement AND a very generous pension program.
While RGF believes the Legislature is in need of an infusion of new thinking and talent, the idea that New Mexico taxpayers should pay per diem, a generous salary, and a pension is simply too much. We recommend voters turn down this measure and that the Legislature commissions a study to consider eliminating per diem and the pension system in favor of a reasonable salary that will maximize the number of people willing to run for the Legislature.
New Mexico suffers from voters choosing legislators (and other elected officials) that do not understand basic economics and how individual freedom contributes to a successful state. It is unclear whether adding a salary would improve New Mexico.
Two big wins for RGF on local taxes and no public financing of county elections.
The stunning conclusion of “hoodie-gate”.
How could New Mexicans benefit from the federal school choice tax credit?
Is demography New Mexico’s biggest problem?
Alternative licensing for attorneys is a winner for New Mexico. Perhaps the Legislature will take notice?
A response to Stephanie Schardin Clarke on income taxes.
The RailRunner costs $150 per rider and it isn’t even “green”.
The Rio Grande Foundation spends quite a bit of time discussing economic development policies, especially New Mexico’s anti-business tax and regulatory policies. But, in many cases New Mexicans and their elected officials seem to prefer the declining status quo over economic diversification and prosperity. For starters, there is the ongoing controversy over Project Jupiter and other data centers.
While data centers have their issues (mostly water and electricity demands) there are ready solutions to both issues. In fact, New Mexico’s 2025 session saw the passage of a bill creating “microgrids” that would separate data centers off from the electrical grid, thus preventing rate hikes. New Mexico’s water challenges relating to data centers can be solved (along with numerous other problems) by treating and using water produced in the oil and gas extraction process. New Mexico’s oil and gas industry generates 2.7 billion barrels of “free” water annually.
Unfortunately, although the folks behind Project Jupiter HAVE made their share of mistakes in the process of getting their facility approved, politicians like Land Commissioner Stephanie Garcia Richard have attempted to thwart the project at every turn. Radical environmental groups and their advocates have also pushed back since they don’t want ANY development, let alone a facility that uses large amounts of electricity or justifies the existence of the oil and gas industry through the use of recycled water produced by it.
Ironically, the best long-term solution to energy demands from data centers and society at large is nuclear energy. Widely acknowledged to be a critical tool in ANY effort to reduce CO2 emissions, nuclear power requires uranium mining. Of course, uranium mining back in the 40s and 50s was not regulated appropriately and was often detrimental to humans and the environment alike.
But we’ve come a long way since then. That hasn’t stopped opponents from pushing back against any and all proposed uranium mining operations in New Mexico.
Finally, as New Mexico-based venture capitalist John Lonergan notes, “New Mexico has developed a habit — particularly in certain communities — of reflexive opposition to business and investment. Every outside investor is presumed to be a predator. Every corporate entity is assumed to have hidden motives. The default posture is suspicion and obstruction.”
Changing economic policy would require a change of attitude toward economic growth and success. New Mexico policymakers and many individuals and interest groups have looked toward oil and gas and the federal government to support the economy. But that hasn’t worked out. Nor has the taxpayer-funded film industry, spaceport, pre-K, free college, free childcare, Rail Runner, numerous capital outlay funded projects, and whatever else has been promoted as the “next big thing.” This doesn’t mean EVERY business that looks to come to New Mexico is worth having, but the immediate reactions shouldn’t be “no.”
At the Rio Grande Foundation we have been watching and waiting for Gov. Lujan Grisham to decide whether New Mexico will participate in the federal education freedom tax credit. You can see a map of all the states that ARE and ARE NOT participating here. In fact, we encourage YOU to take 5 minutes today and send the Gov. an email on the subject.
Our friends at the American Federation for Children have created a fact sheet (see below) on the credit. Click on it for a printable version.
NEW MEXICO BY THE NUMBERS:
The Albuquerque Journal has a VERY important article detailing the recent closure of two Catholic schools and two charter schools. It also asserts that Albuquerque Public Schools is closing schools, but there are still active websites for Duranes Elementary (now an early childcare center) and La Luz Elementary while Taft Middle School has changed to Coronado Dual Language Magnet Elementary School.
But, that’s not even the biggest problem. One of New Mexico’s biggest issues is the steep drop in our young population. Shockingly, according to the article, according to “APS Superintendent Gabriella Durán Blakey, the district is expecting a drop of about 1,500 students — as it has every year in recent memory — when the new school year starts Friday.”
That’s a loss of students the size of Sandia High School every single year.
The district is down more than 22,000 students in the last decade, from around 86,500 in 2015 to 63,700 last year. Combine a plummeting student population with unlimited funding thanks to the oil and gas boom and you get Albuquerque Public Schools spending an eye-popping $36,859 per student.
It is true that the decline in births is not JUST a New Mexico problem. Solutions to that are hard to come by. But, it doesn’t have to be this way. New Mexico policymakers including the next Governor (and legislators) need to come up with bold, innovative solutions to attracting and retaining families.
Gregg Hull’s plan to eliminate the income tax is a bold move. Cutting crime and improving education outcomes will also help. All of them are easily possible.
Deb Haaland’s plans are mostly “more of the same.”
On this week’s interview Paul sits down with Vern Lund, the CEO of Navajo Transitional Energy Company (NTEC). You may have never heard of NTEC, but it is a big deal both in New Mexico’s energy sector as well as economically on the Navajo Nation.
What is NTEC and what does it do? What is its involvement in the Four Corners Power Plant (a coal power plant) and other current and future energy projects? If you care about energy (and if you have been using your AC this summer, you should) this conversation is worth it!
At the Rio Grande Foundation we sometimes joke about the predomination of trial attorney billboards all over, but that’s a function of our legal system and culture, not necessarily the fact that there are too many attorneys. In fact, we can attest to a distinct lack of attorneys willing to take important cases on our behalf. Apparently, according to a new report, “New Mexico officially qualifies as a “legal desert” under the American Bar Association’s definition, as two-thirds of its 33 counties have fewer than one lawyer for each 1,000 residents.”
For years the Rio Grande Foundation has pointed to New Mexico’s difficult professional licensing requirements as an obstacle to economic growth and employment in New Mexico. We have previously even engaged (successfully) with New Mexico’s Supreme Court to liberalize rules for out-of-state-attorneys who wish to practice in New Mexico.
So, we applaud New Mexico’s Supreme Court for this move to reduce unnecessary obstacles to attorneys practicing in New Mexico. A skills-based approach to practicing as an attorney makes sense.
Perhaps the Legislature will consider following New Mexico’s Supreme Court? We’re not holding our breath.
Recently, Stephanie Schardin Clarke, New Mexico Secretary of Taxation and Revenue, wrote an article slamming Republican efforts to eliminate New Mexico’s personal income tax. She makes numerous points, but they boil down to two: 1) We simply should not cut taxes, especially for the wealthy. 2) New Mexico cannot afford to do bold things to improve its economy and instead must be content to “smaller” policies like targeted tax credits.
Schardin Clark touts small, targeted policies that have been implemented over the past eight years but fails to note that the only thing truly propping up New Mexico’s economy is the ongoing oil and gas boom in the Permian Basin. That money has contributed to 75% spending growth under the current Administration, not to mention new entitlements like “free” college, “free” universal childcare, and “free” universal pre-K that will continue to drive spending in the future with questionable and unproven outcomes.
The economic impact of these programs is unknown. Spending is happening, but will these policies result in a better trained workforce, overall job creation, or anything that will make New Mexico and New Mexicans more successful? It is impossible to say.
But, in terms of Schardin Clarke’s approach to taxes, the fact is that even at a time of record oil and gas revenues, Lujan Grisham has raised taxes more than she’s cut them. Yes, reducing New Mexico’s GRT by .25% was a “win,” but she also signed an income tax hike, levied taxes on online sales, and increased corporate income taxes. Just this year the Gov. signed legislation increasing vehicle registration fees by 25%.
All of this at a time when Senate Finance Committee Chair George Muñoz (a Democrat) says “We have more money than we know what to do with.” Muñoz appears to have figured things out and recently wrote an opinion piece in support of eliminating the personal income tax.
The point is that under Lujan Grisham and Schardin Clark New Mexico has NOT seized the opportunity to truly diversify and grow its economy. They tout very narrow and short-term statistics, but ignore the fact that New Mexico remains the third-most impoverished state in the union and people are “voting with their feet” making New Mexico’s population stagnant and aging dramatically relative to our neighbors.
Eliminating New Mexico’s personal income tax would lead to economic growth in New Mexico and would likely stanch the outward migration of our young, educated population. In fact, “Between April 1, 2020, and June 30, 2023, high-tax states lost net 2.8 million residents to low-tax states. Zero-income tax Florida and Texas were the top two destinations for interstate movers, gaining 819,000 and 656,000 net residents respectively.” This isn’t an abstract issue.
New Mexico lost population last year according to the US Census Bureau. If you want your kids and grandkids to stay in New Mexico you need to do something big to make the State more attractive to people and business.
So, what should be done? Rather than eliminating the $2.1 billion generated by the income tax in one fell swoop, I recommend phasing out the income tax over a span of a few years. Already for the next session analysts expect no less than $850 million in “unforeseen” revenue thanks to rising oil prices. This number is likely closer to $1 billion given continued high oil prices. NO OTHER TAXES should be raised to eliminate the income tax!
So, reduce the income tax by approximately $1 billion. If revenues don’t keep up (say oil prices drop dramatically or the US goes into a recession) those tax cuts can be reversed or put on hold. There’s no need to cut necessary programs although it is true that New Mexico government is far too bloated and many of these programs (like “free” childcare and “free” pre-K) SHOULD be targeted at those with lower incomes, not the wealthy.
For too long New Mexico has relied on oil and gas and federal spending. While we shouldn’t kill off oil and gas we DO need to diversify our economy. Eliminating the income tax would do that by bringing new businesses and taxpayers to New Mexico. It is high time to do something bold to improve our state.