RGF is always looking for ways to reduce state spending and make government more efficient and transparent. The organization’s president Paul Gessing appeared on KOB TV Channel 4 to discuss how procurement reforms and enhanced competition could save money during tough budget times.
A version of this op-ed ran in the Albuquerque Journal on January 30, 2017.
Herbert Hoover.
The name is synonymous with indifferent right-wingery in the face of desperate need for “progressive” change.
Earlier this month, Alan Weber, who in 2014 failed to secure the Democratic nomination to run against New Mexico’s incumbent governor, wailed about “the Herbert Hoover policies of the Martinez administration.” Weber and his ilk are crafting a narrative they think will help them achieve legislative victories: New Mexico’s many woes are due to the cruel, anti-government policies pursued by Susana Martinez. The answer to the state’s dismal condition is to go back to a progressive future — and a repeal of her misguided cut in the corporate tax is a good place to start.
But how much change has the governor brought to public policy in New Mexico? Looking at the record, it’s quite clear that it has been mostly business as usual in Santa Fe since Martinez took office. The major reforms that conservatives, libertarians, and free-market voices advocate at the state level have fared very poorly in the last six years:
Tax Cuts: Martinez did sign a modest, multi-year reduction in the corporate tax. But the levy is a miniscule revenue-producer for the state — even before the phase-down, its share of state-raised taxes was in the mid-single digits. (And as the New Mexico Tax Research Institute noted, the revenue raised by the tax is “somewhat volatile and often fickle.”) Most workers in the Land of Enchantment’s private sector are employed by firms that do not pay the corporate tax, but pass their profits through to owners/investors, who are taxed on their income.
Tax/Expenditure Limits: Alone in our region, New Mexico has no limit on the taxes it can impose, and no cap on how much state government can spend. And it’s probably not a coincidence that expenditures are excessive. In 2014, the most recent year for which U.S. Census Bureau data are available, per capita spending was $8,495 — dwarfing our neighbors Oklahoma ($6,028), Utah ($5,790), Colorado ($5,722), Arizona ($4,937), and Texas ($4,843).
Right to Work: It’s indisputable that ending compulsory unionism can be a major factor in boosting economic development. A right-to-work law means job growth and incomes, once adjusted for purchasing power, that surpass those in states without labor freedom. But right to work is dead in Santa Fe — at least until a new crop of legislators is elected.
School Choice: The value of a skilled workforce is another driver of investment and job-creation. Recognizing the failures of a monopolized, unionized education “system,” many states have moved toward K-12 competition. New Mexico has not joined in. Its charter-school law is weak, vouchers are nonexistent, and no tax credits are available for donations to scholarship-granting charities. Even the left-leaning Brookings Institution gives the state’s largest school district a “D” on its “Education Choice and Competition Index.”
Regulations: New Mexico has some of the most burdensome occupational-licensing rules in the nation. But despite an emerging left-right consensus on the need for reform, there has been no progress on cutting the red tape that hinders many people’s ability to earn a livelihood. The prevailing-wage mandate, which limits the contractors that can bid on public construction and thus drives up costs to taxpayers, remains stubbornly resistant to reform, much less repeal. And competition in the electricity market, adopted by a wide margin of Nevada’s voters in November, has no champion in Santa Fe.
Healthcare: In perhaps the state’s worst public-policy blunder in decades, Martinez fell for the claim that a radical broadening of Medicaid eligibility would be both affordable and serve as a “economic stimulus.” Her decision surely pleased liberals, but we now know what a disaster expansion has been. Enrollment soared past expectations, the bills are enormous, and the boost to the economy never arrived.
Has the red-state model really been implemented under Susana Martinez? It certainly doesn’t appear so. Maybe the answer to New Mexico’s twin crises of fiscal strife and economic carnage is to finally implement a policy programme geared toward limiting government and spreading opportunity.
D. Dowd Muska is research director 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.
The Albuquerque Journal had another useful and depressing article about the sorry state of the New Mexico economy in Sunday’s paper. There were several interesting aspects to the story. For starters, I know Michael Coleman is the Journal’s DC reporter, but talking to the Congressional delegation about the State of New Mexico’s economy is like talking to the average New Mexico legislator about relations with Russia or Egypt. It’s simply not in their wheel house (and it showed).
Gov. Martinez’s spokesman at least provided a reasonable analysis: basically, the Gov.’s spokesman noted that NM has always relied on DC and oil/gas prices and that those have not been as reliable as in the past. The argument that sequestration is to blame for NM’s woes is somewhat laughable, but other than that it is close to the truth. I truly wonder where was this line of argument was during the 2016 election when Martinez lost her majority in the NM House and saw Republicans lose several seats in the Senate.
But, when compared to Sen. Udall and Rep. Ben Ray Lujan, Gov. Martinez’ response looks positively brilliant.
Udall who trotted out the usual liberal hobby-horses: early childhood education, improved health care (he must have forgotten that nearly 50% of NM’s population is on Medicaid thanks to Medicaid expansion), and economic diversification (whatever that means). All I can say is that he should definitely stay in Washington and not run for Governor where he could do real damage.
Rep. Ben Ray Lujan claims high-speed internet access, job training, and education are the keys to success. No data supports his or Udall’s statements, but that’s the point. These guys are clueless.
One thing that would help is for New Mexico to embrace a “right to work” law as 27 states have now done, but they oppose this reform for reasons of ideology and self-interest.
Alas, given the current political situation in the Legislature, New Mexico will continue to hemorrhage people and will continue to send economic illiterates to Washington. If we keep losing population, perhaps we’ll someday send one less economic illiterate to Washington.
A former mayor of Albuquerque wrote an article defending the district for its poor academic performance. His basic thesis being: poverty makes it impossible for the District to perform as well as other, more economically-prosperous districts.
All I can say is “wow” and that this is the type of defeatist attitude that has led New Mexico to its current sorry state. We can’t develop our economy because we are too isolated and don’t have enough water (to name a few issues). We can’t educate our kids because we our too poor. I guess we should just give up.
The fact is that school choice has repeatedly been shown in empirical analyses to improve student outcomes, but APS has opposed choice and worked in the Legislature to oppose it.
The Democrat-controlled Legislature is in session RIGHT NOW. They COULD adopt school choice to help fix the situation right now. They won’t, not because it doesn’t work, but because of politics and the fact that too many New Mexicans have accepted the lie that we are somehow too poor to succeed.
Still don’t believe that poverty can be overcome? Look at the international PISA test results and see how many countries far poorer than the USA are beating us educationally:
The hand-wringing has begun. America’s new chief executive has signed off on a hiring freeze for the federal government, and predictably, New Mexico’s establishment is panicking.
In the Santa Fe New Mexican, U.S. Sen. Tom Udall whined that hiring freezes “hurt the American people and cost the taxpayers more money,” while Big Labor bigwig Jon Hendry wailed that the president “can’t expect to do everything he is expecting us to accomplish on a national basis and not give us resources to do it. There is no logic to that.”
A right-sizing of the federal bureaucracy — civilian staffers and contractors — is long overdue. But wherever one stands ideologically and politically, there’s no question that New Mexico is particularly susceptible to changes in federal personnel policy. The most recent analysis by the Fiscal Federalism Initiative of the Pew Charitable Trusts found that cash from D.C. accounts for a jaw-dropping 32.1 percent of the state’s gross domestic product. That’s more than double the figures for economic-development dynamos Texas (14.2 percent) and Utah (15.5 percent), and well above the comparable shares for Colorado (17.0 percent), Oklahoma (21.8 percent), and Arizona (24.4 percent).
New Mexico’s governor and state lawmakers should see the hiring freeze as an opportunity — a chance to finally adopt proven policies that will establish, once and for all, a vibrant private sector in the Land of Enchantment. Will they? Well, there’s always the 2019 session….
In one of his first official acts since ringing in the New Year on the Plaza, Santa Fe Mayor Javier Gonzales revealed his New Year’s resolution: to impose a new tax on Santa Fe residents (the bill is expected to be introduced at tonight’s Council meeting). Despite recently praising himself in interviews for not raising taxes, Mayor Gonzales is expected to call a special election for a one cent per ounce tax on a wide range of beverages such as soda, energy drinks, lemonade, iced tea and even almond milk.
A Rio Grande Foundation analysis of records and communications released under the Inspection of Public Information Act, along with media reports and other publicly available documents concluded that the mayor has been less than forthcoming about his desire to impose new taxes on Santa Feans.
“From the outset, Mayor Gonzales has desired more taxes to fuel more government spending,” Paul Gessing, president of the Rio Grande Foundation, said. “Our analysis exposes the absurdity of him using tax hikes to masquerade as a public health crusader instead of a typical tax-and-spend politician.”
The analysis can be found on the following pages. Among the key findings:
Additionally, this beverage tax will significantly increase the cost of doing business for retailers, and almost all consumers will see higher grocery bills. Low income residents will bear the brunt of Mayor Gonzales’ regressive new tax.
“Just as his community experts did, Santa Fe city councilors should reject this proposal and say ‘No Taxation on Carbonation,’” Gessing said.
Examining records and communications released under the Inspection of Public Information Act (and currently available at Santa Fe City Hall), along with media reports and other public records, the Rio Grande Foundation arrived at the following conclusions regarding Santa Fe Mayor Javier Gonzales’ proposal to impose a one cent per ounce tax on sweetened beverages:
Look at the bills scored so far on the Foundation’s 2017 Freedom Index, and it’s easy to get depressed.
Tax hikes, new regulations, higher minimum wages, abandonment of the Electoral College, more revenue devoted to “early childhood education” — it’s a grisly scene. (Elections have consequences.)
But one of the few bills that lands on the positive side is SB 5. Sponsored by Roswell’s Cliff Pirtle, the legislation promotes fiscal and individual responsibility, and earlier this month, the justification for the bill received a boost from an unlikely source.
Currently, beneficiaries of food stamps — more precisely, the Supplemental Nutrition Assistance Program (SNAP) — can use the vouchers to buy a wide range of groceries. Pirtle’s bill applies the restrictions placed on purchases under the Women, Infants, and Children program to food stamps. Baby formula, milk, peanut butter, fish, cheese, fruit /vegetable juices, and bread would be permitted, and SB 5 includes meat as well.
A cruel reform? Not according to a report commissioned by the U.S. Department of Agriculture. Researchers, examining transactions at a “leading grocery retailer,” found that SNAP households spent 5.44 percent of their expenditures on soft drinks. That was more than milk (3.85 percent), fresh chicken (1.85 percent) water (1.17 percent), and potatoes (0.74 percent). Food-stamp “families” spent substantially more on soda than non-SNAP households, which held their liquid-candy bill down to 4.01 percent.
Source: “Foods Typically Purchased by Supplemental Nutrition Assistance Program (SNAP) Households,” Nutrition Assistance Program Report, Food and Nutrition Service, Office of Policy Support, U.S. Department of Agriculture, November 2016
Marion Nestle, a well-known (and liberal) professor of nutrition and food studies at New York University, told The New York Times that the finding is “pretty shocking,” and amounts to “a multibillion-dollar taxpayer subsidy of the soda industry.”
Agreed. That’s why reasonable (and public-health-promoting) restrictions on welfare are so important. Keep an eye on SB 5. It will indicate whether lawmakers in Santa Fe are serious about fiscal responsibility and fighting the obesity epidemic.
New Mexico’s challenges keep getting more formidable. As bad as the current budget situation is, the tide of Medicaid costs coming at us due to the program’s expansion under ObamaCare is going to make balancing the budget even more challenging in the next few years.
According to the Federation of Tax Administrators, New Mexico’s tax burden as a percent of personal income is 10th-highest in the nation and far in excess of neighboring states like Texas and even “blue” Colorado.
While State revenue has not grown in recent years due to the stagnant economy, New Mexico’s problem is not inadequate revenue.
New Mexico is also a big spender. According to the website USGovernmentspending.com, New Mexico’s state and local governments spent 25.03% of state GDP in 2016. That’s higher than all but three other states in the nation.
The data clearly indicate that New Mexico’s government taxes and spends adequately to fund the basic needs of government. To that end, Gov. Martinez should be applauded for her “no new taxes” stance which will surely be tested over her remaining time in office.
What New Mexico faces is one or more elected officials willing to put forth a plan to make difficult decisions over what spending is necessary and what spending should be eliminated as part of broader belt-tightening efforts.
Gov. Martinez is asking state employees to pay an additional 3.5 percent into their retirement plans. This is fine as far as it goes. No one has done more to show that working for New Mexico government is more lucrative than are similar private sector jobs. According to the American Enterprise Institute, New Mexico’s government workers earned a whopping 24 percent more than the folks who labor to pay their salaries (by far the widest disparity in our region).
Alas, this proposal is not going to fly in New Mexico’s Democrat-controlled Legislature. Compromise is needed if New Mexico’s government is to be right-sized. Martinez can hold the line on taxes, but only by putting some of the GOP’s “sacred cows” on the table as well.
These are mostly in the realm of “corporate welfare” programs like LEDA and JTIP, but they also include the tourism department and film subsidies. Unfortunately, film subsidies are one area of corporate welfare that most Democrats are fond of. Legalizing pot could also be a bargaining chip for Martinez. Legalizing and taxing pot could generate more than $50 million annually. Passing it legislatively as opposed to via Constitutional amendment (circumventing the Governor) could turn the money spigot on earlier, thus impacting the budget sooner.
There are no easy solutions to New Mexico’s budget mess. Raising taxes will further harm economic growth, thus hastening the departures of jobs and the very productive workers our State so desperately needs.
An alternative is tax reform. The Rio Grande Foundation has looked at the concepts put forth by Reps. Harper (R) and McCamley (D) and we like what we see. Eliminating “pyramiding” and taxes on business-to-business transactions is critical. That can be done by broadening the tax structure (eliminating exemptions and deductions including that on certain groceries) and lowering rates somewhat.
The aim should be “revenue-neutral” reform, but we are confident that the reforms as currently understood would make New Mexico a more attractive place for businesses, especially entrepreneurs and small businesses. At some point in the near future, this would lead to economic and revenue growth.
None of this will happen overnight even if reforms are agreed to this session (an uphill battle to say the least).
So, we are left with making painful cuts and tough decisions now and (hopefully) enacting long-overdue tax reforms that will bring about economic growth for the future. It is the best we can hope for in what will undoubtedly be a challenging 2017 session.
Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility
Exxon Mobil’s decision to invest billions of dollars to join “other oil firms in a race to build up drilling portfolios in West Texas and New Mexico” is good news for the Land of Enchantment’s fiscal condition.
As the above graph indicates, the price of a barrel of West Texas Intermediate is on the rise — up about 30 percent since the start of August. So in the short term, production in New Mexico, which peaked in May 2015, will rebound.
But for how long? Some speculate that higher oil prices are here to stay. That belief surely emboldens New Mexico’s leftists, who have no intention of implementing a long-overdue right-sizing of the state’s employees, agencies, and assets.
On the other hand, there are plenty of signs that the price run-up might stall, or even reverse course. In late November, OPEC did reach a deal to cut production, and it’s certainly had an impact. But as The Wall Street Journal noted, member countries “have a spotty record of enforcing their own agreements,” and there’s “no legally binding way to deter … cheating.” In addition, Libya is exempt from the deal, and earlier this month, the Journal reported that the nation has hiked its production “to a three-year high of 708,000 barrels a day … after having fallen to less than 200,000 barrels a day last year.”
Outside OPEC, the situation is even more chaotic. Not long after OPEC’s deal was reached, 11 non-members agreed to throttle back their pumping as well. But can Russia be trusted? Can Mexico? And what about the producers who have no intention of cuts? Earlier today, the International Energy Agency noted that “long-planned projects are coming on stream in Brazil and Canada and their combined production will rise by 415 kb/d this year.”
Speculating on the future of any commodity is a dicey business. But there appears to be at least as much reason to expect stability, or even decline, in the price of oil as there is to believe that another era of $100-per-barrel is right around the corner. New Mexico’s legislators and governor should budget accordingly.
ALBUQUERQUE — Lieutenant Governor John Sanchez and Secretary of Education Hanna Skandera will headline a rally of hundreds of students, parents, teachers, and community leaders to kick off School Choice Week in New Mexico.
School Choice Week 2017 kicks off in New Mexico with a program of student performances and remarks from political and community leaders at noon on Monday, January 23 in the rotunda of the State Capitol.
The goal of the event is to gather hundreds of school choice supporters from across the state to raise the profile of educational opportunity. The celebration is timed to coincide with National School Choice Week (January 22-28, 2017), which will feature more than 20,000 events across the country.
Said Rio Grande Foundation president Paul Gessing, “School Choice Week is an opportunity for us to call attention to the success and value of existing choices. We can also point out that New Mexico has a very long way to go to bring true choice to students of all income levels and backgrounds.” Noted Gessing, “In the 2017 legislative session, legislators will be considering whether to place an arbitrary moratorium on new charter schools.”
Event planners include the Rio Grande Foundation, New Mexico Coalition for Charter Schools, and LIBRE Institute. Students and officials from a variety of schools of choice will also be in attendance and performing or participating.
Held every January, National School Choice Week is an independent public awareness effort designed to shine a positive spotlight on effective education options for every child. Through more than 20,000 independently planned events across the country, National School Choice Week raises public awareness of all types of educational choices available to children. These options include traditional public schools, public charter schools, public magnet schools, online learning, private schools, and homeschooling.
The Rio Grande Foundation is New Mexico’s free market think tank. It has supported school choice in New Mexico since its founding in 2000.
Sometimes the media shows their bias if only accidentally and sometimes government bureaucrats reveal truths when it no longer matters. On both of those counts I found Washington Post columnist David Ignatius’ interview with Obama Secretary of Energy Ernest Moniz to be quite interesting and revealing.
For starters, Moniz, one of the leaders in an Administration that has spent eight years and wasted countless billions of dollars of What’s happening (with carbon emissions) is largely a market-driven phenomenon. We at the Rio Grande Foundation been saying that for years, so why burden the oil and gas industries, utility customers, and the US economy with massive and expensive new regulatory burdens?
Perhaps Obama’s policies were driven more by special interest politics and the green agenda than real concern over carbon emissions?
The whole article is worth a read, but the other fascinating part is Ignatius’ seeming assumption that President Trump WANTS to emit as much carbon as possible. I don’t know about Trump, but I know a lot of people sympathetic to his views on energy and not one of them WANTS to emit more carbon as an end-goal.
Trump and his supporters view government mandates and regulations as costly and ineffective (and it seems like Moniz is tacitly admitting as much) ways to address “climate change” which may or may not be a serious problem. So, would Moniz be so kind as to come out and say that the Clean Power Plan, Solyndra subsidies, ethanol, fuel emission standards, and the raft of other Obama-era policies are simply unnecessary as tools to reducing carbon emissions? A man can dream.
I like Gov. Martinez. She hasn’t raised taxes. She’s supported things like “Right to Work” and accountability in education. Unlike her predecessor she hasn’t saddled New Mexico with vanity projects like the Rail Runner and Spaceport. More importantly, she got elected Governor of a blue state…twice.
And that’s probably the biggest difference between her and a think tank CEO.
In her State of the State address yesterday, Martinez was relentlessly upbeat about both the economy and New Mexico’s education system. I just don’t see it. I actually agree with Democrat Sen. Joseph Cervantes who said the “state of the state” was “unacceptable.”
What gives? Despite having a Republican Governor for six years and a Republican House for two years, New Mexico remains a very “blue” state that has NEVER had conservative governance (unlike more economically-prosperous “blue” states like Colorado or even California).
So, my State of the State speech would have gone something like this (and this is probably why I’m not governor):
New Mexico has the 2nd highest unemployment rate. Our young people are fleeing. Dependency on the government is growing (in part due to my decision to expand Medaid under ObamaCare…oops). And, most sadly, 2016 will be remembered for as a year in which unspeakable acts were done to our children and our already-high crime rates rose dramatically.
For two years I supported and the Republican House passed bills to reform New Mexico’s failing economy and broken education system, but we were stopped at every turn by the Democrat-controlled Senate. In their infinite wisdom last November, rather than ridding us of an obstructionist Senate, voters instead chose “more of the same.”
I’ll spend the next two years trying to prevent further damage to our economy with my veto pen, but once I’m gone “all bets are off.”
Good luck New Mexico, you’ll need it.
Early voting is underway for Santa Fe Public Schools’ $100 million bond request, which will fund “high school facilities for programs in the applied sciences such as sustainable technologies, autotech, welding, science labs and more,” “construction of a new comprehensive middle school offering a greater variety of academic, extracurricular and arts programming,” and expansion of “energy and water conservation initiatives.”
The district admits that approval does indeed mean a property-tax increase — $80 a year, for a home with a $300,000 market value. But given the way that New Mexicans reflexively support any expenditures peddled as good for “the children,” don’t be surprised when voters, who can cast ballots until February 7, okay the bond.
If Rep. Javier Martínez (D-Albuquerque) has his way, bond approvals for “education” might become even more automatic. His HB 99 permits sixteen-year-olds to vote in school elections. Seriously.
It’s bad enough that government schools, at all levels, use taxpayer dollars to lobby for higher taxes and more spending. But sixteen-year-olds would be particularly susceptible to Big Education’s propaganda.
Throw in the fact that sixteen-year-olds don’t produce much of the revenue that covers their schools’ costs, and HB 99 should be of concern to all New Mexicans working for fiscal accountability, as well as school choice.
Martínez has garnered predictably positive coverage from The New York Times. The folks who’ll pay the bills for HB 99 might see his legislation differently.
(Albuquerque) The New Mexico Legislature’s “long” 60-day session begins today with ascendant Democrat majorities in both houses. While some of the faces may be different in Santa Fe, the Rio Grande Foundation will again be keeping an eye on legislation impacting YOUR freedom with its “Freedom Index” legislative tracking tool.
Lawmakers and the interested public can use the “Freedom Index” to get an independent, free market view of pending legislation. Moreover, voters can see whether their legislators are voting for free markets or for bigger government. Votes tallied are “floor” votes.
The most “pro-freedom” bills will receive positive scores as high as +8 while the most “anti-freedom” bills will receive negative scores as low as -8.
Users can see:
Our analysis will be available before final votes on those bills that are analyzed and can be used by both legislators, legislative staff and interested voters to debate the merits of a bill.
Rio Grande Foundation president Paul Gessing said of his organization’s legislative tracking web site, “This legislative session takes place at a time of deep economic challenges for our State. It is more important than ever that we have an informed and engaged citizenry. The Freedom Index will help inform the policy debate in Santa Fe and around our State.”
Herbert Hoover.
The name is synonymous with indifferent right-wingery in the face of desperate need for “progressive” change.
Last week Alan Weber, who in 2014 failed to secure the Democratic nomination to run against New Mexico’s incumbent governor, wailed about “the Herbert Hoover policies of the Martinez administration.” That kind of rhetoric will only intensify, as the 2017 session gets underway, and disputes over fiscal and economic-development policies mount.
Weber and his ilk are crafting a narrative they think will help them achieve legislative victories. Their tale is simple: New Mexico’s many woes are due to the policies pursued by Susana Martinez. The answer to the state’s dismal condition is to go back to the future — and a repeal of Martinez’s misguided cut in the corporate tax, part of “an old ideology that gained prominence 40 years ago,” is a good place to start.
But how much change has the governor brought to public policy in New Mexico? Looking at the record, it’s quite clear that it’s been mostly business as usual in Santa Fe since January 2011, when Martinez took office. Here’s a brief list of the major reforms that conservatives, libertarians, and free-market voices advocate at the state level, and how they’ve fared in the last six years:
Tax Cuts: Martinez did sign a modest reduction in the corporate tax. But the levy has never been much of a revenue-producer for the state. Most workers in the Land of Enchantment’s private sector are employed by firms that do not pay the corporate tax, but pass their income through to owners/investors. Many states survive, and even thrive, without corporate taxes at all.
Tax/Expenditure Limits: Alone in our region, New Mexico has no limit on the revenue that its taxes can raise, and no cap on how much state government can spend. And it’s probably not a coincidence that expenditures in the Land of Enchantment are out of control. As the graph below, total spending dwarfs that of our five neighbors.
Source: U.S. Census Bureau data
Right to Work: Need this even be mentioned? We know that ending compulsory unionism can be a major factor in boosting economic development. But RTW is dead, dead, dead in Santa Fe — at least until a new crop of lawmakers is elected.
School Choice: The value of a skilled workforce is another driver of investment and job creation. Recognizing the failures of a monopolized, unionized education “system,” many states have moved toward K-12 competition. New Mexico has not joined in. Its charter-school law is weak, vouchers are nonexistent, and no tax credits are available for donations to scholarship-granting charities. Even the left-leaning Brookings Institution gives the state’s largest school district a “D” on its “Education Choice and Competition Index.”
Electricity Deregulation: Choice works with your power bill, too. But over a decade ago, an attempt to allow competition in electricity was repealed, and there does not appear to be any interest in reviving the law. In addition, a “renewable portfolio standard,” which mandates the use of expensive and intermittent sources of electricity, is the law in New Mexico. It’s at 15 percent now, and is slated to increase to 20 percent (!) in 2020.
Marijuana Legalization: Social conservatives might remain opposed to decriminalizing cannabis for personal use, but libertarians and many in the right’s fiscal community recognize the budget and economic benefits of ending a “war” that can’’t be won. Governor Martinez is opposed to legalization — a position she shares with many Republicans and Democrats, it’s worth noting.
Healthcare: In perhaps the worst public-policy decision made in the Land of Enchantment in the last few decades, Martinez fell for the claim that a radical broadening of Medicaid eligibility would be both affordable and serve as a “stimulus.” Her decision surely pleased the state’s liberals, but we now know what a disaster expansion has been.
So you make the call: Has the red-state model really been implemented under Susana Martinez? Errors of Enchantment certainly doesn’t think so. Maybe the answer to New Mexico’s crisis is to finally implement a policy programme geared toward limiting government, spreading opportunity, and fostering individual responsibility.
New Mexico’s education woes are well-documented. Low graduation rates and poor educational performance are the hallmarks of New Mexico’s government-run education system. This is why the Rio Grande Foundation has long-supported school choice in all of its varieties as a way to increase accountability and reduce bureaucratic inertia throughout the education system.
Unfortunately, when it comes to education in New Mexico, however, success simply puts a target on your back. Take the case of the Estancia Valley Classical Academy (EVCA). The School is affiliated with Hillsdale College and educates based on principles of the American Founding and a study of the classics from ancient Greece and Rome.
By all accounts, as seen below, EVCA has been successful in generating strong results (averaging an “A” over the last three years even if they received a “C” in 2016.
Unfortunately, this wasn’t good enough for the Public Education Commission (PEC). The Commission which had originally chartered the school decided in December NOT to renew its charter. If Education Secretary Skandera fails to override the PEC’s decision, the school would be forced to close.
According to the meeting minutes available at the PEC’s home page, Commissioner Patricia Gipson motioned not to renew the school’s charter, saying “I move to deny the renewal application of Estancia Valley Classical Academy for the following reasons: The school committed a material violation of the conditions, standards, or procedures set forth in the charter school contract because the school’s policies are in direct violation of federal law, and the school violated any provisions of law from which the charter school was not specifically exempted, because, once again, they are in violation of federal law.” Commissioner Jeff Carr seconded the motion and it passed 6-1 with only Commissioner Millie Pogna opposing it.
Additional details are available in the school’s renewal application package, but it is unclear what specific “material violation” the school had. It would also seem that some kind of remediation could have been recommended by the PEC, especially considering the school’s strong academic performance.
Alas, it appears that political agendas at the PEC may have gotten in the way of an excellent option for New Mexico students. And we wonder why New Mexico is 50th!
Some members of the U.S. Senate defend the fiscal and healthcare-access disaster that is Medicaid, others zealously guard taxpayers’ dollars.
Sen. Jeff Flake (R-AZ) is out with another exploration of “some of the questionable expenditures lurking throughout the federal budget.” Wastebook: PORKémon Go is a 201-page compendium of transportation boondoggles, dodgy “science” grants, corporate welfare, and other fiscal atrocities. Unlike last year, New Mexico isn’t specifically mentioned in this year’s publication. But the state is listed as a beneficiary of a program that “allows federal farm loans to literally be repaid with peanuts.”
Instead of covering borrowed funds with actual cash, American peanut farmers can forfeit their crops to the U.S. Department of Agriculture’s Commodity Credit Corporation. And since Washington “pays a rate greater than the market price for the peanuts,” the sweetheart deal “has become a ‘safety net’ for many agricultural operations.” As the Congressional Research Service explained: “The program essentially provides a price floor for producers because the government will take ownership of the loan collateral (i.e., the pledged crop) if prices drop below the statutory loan rate.”
The Land of Enchantment can’t match Georgia’s massive yield, but the National Peanut Board ranks New Mexico among the “major” peanut-producing states. In 2014, the harvest was 15.5 million pounds. So it’s a safe bet that peanut-based crony cropitalism is at work somewhere in the state.
For more of Flake’s findings — including a treadmill for fish, a carbon-capture boondoggle, and Washington’s appalling PR spending — click here.
The governor’s released her proposed budget for fiscal 2018, but veteran New Mexico policy wonks know that the Legislative Finance Committee’s fiscal recommendations are at least as important as the chief executive’s spending plan. It’s always interesting to see the priorities of revenucrats and approprocrats in Santa Fe, as well as their predictions about where the state’s economy and fiscal policy are headed. Of particular note in the LFC’s “Legislating for Results: Policy and Performance Analysis”:
* It appears that New Mexico has “finally … hit bottom for job losses in the mining sector,” with oil-and-gas employment stabilizing. But “other industry sectors are now faltering, resulting in total year-over-year job losses for September and October 2016.” Thus, while the economic forecast is weak, “the revenue forecast is even weaker.”
* The LFC is recommending “recurring appropriations from the general fund” of $6.052, assuming “$123.3 million in new revenue, additional spending reductions, or both.” Remember, though, that the general fund is just one portion of overall expenditures. Counting transportation spending, quasi-public entities, and federal monies, the true figure is roughly three times as much as the (widely quoted) sum for the general fund.
* The LFC wants $2 million “in recurring funding” for the “Job Training Incentive Program.” But in some good news for taxpayers, the committee’s recommendation “does not provide additional funding for Local Economic Development Act funds due to fund balances of $29 million as of November 2016.”
* “Available capital capacity in 2017 is at an all-time low, less than $65 million after solvency measures enacted in the 2016 legislative special session.” But state agencies and local governments have requested “$1.7 billion [emphasis added] for capital projects, including $588 million for water, transportation, quality of life (libraries, parks, senior centers, community and cultural centers, etc.), environment (utilities, landfills, clean energy, solid waste, etc.), and public safety.” In response, LFC staffers think legislators might want to “consider reviewing and reauthorizing inactive capital outlay projects.”
* The LFC continues to act as an advocate for, rather than an impartial analyst of, “early childhood education.” Ignoring the substantial evidence that preschool and related programs provide temporary benefits at best, the committee claims that “early care and education programs have been shown to increase school completion rates and each high school graduate, LFC and other studies show, produces benefits of $278 thousand for the graduate and $100 thousand for taxpayers and other beneficiaries, compared with a non-graduate.”
* Single-payer hasn’t yet been “achieved” in the state, but it’s almost halfway there. In fiscal 2018, more than “928 thousand New Mexicans” will be on Medicaid, which provides “comprehensive medical care, including hospitalization, doctor visits, pharmaceuticals, vision services, and dental services.” Nearly a “quarter of the recipients are newly enrolled adults who became eligible with the expansion of Medicaid under the Affordable Care Act.”
* Despite “public safety investments over the last five years,” the Land of Enchantment remains “among the most violent states in the nation, with the second highest rate of rape and fourth highest rate of aggravated assault.” (No mention of Albuquerque’s soaring murder rate.)
* “The constitutional mandate to balance expenditures with available revenues may require consideration of new revenue options.” Translation: Lawmakers should be looking at tax hikes. You’ve been warned!
New Mexico’s Legislature hasn’t even convened for 2017 but in Kentucky, the Legislature has passed and the Gov. has already signed “right to work” legislation making the Bluegrass State the 27th “right to work” state in the nation. As the article notes, Kentucky is also considering measures to roll back its “prevailing wage” law which artificially inflates the cost of public works projects.
Like New Mexico, Kentucky has traditionally been poor and lacking in economic freedom with abundant social ills. But Kentucky is embarking on a path opposite to the one New Mexico is pursuing and what Kentucky pursued in the past. As seen below, we at the Rio Grande Foundation have two full years of data indicating that “right to work” states create more jobs than do “forced unionism” states across the nation. We’ll see how this social experiment plays out. I have a funny feeling that Kentucky’s economy will leave New Mexico’s in the dust in the years ahead.
ALBUQUERQUE — With Santa Fe deeply divided between a Democrat-controlled legislature and a Republican-led executive branch, the potential for stagnation and stalemate is high as lawmakers convene for the 2017 session.
One issue that has generated support from across the political spectrum, won’t break the bank, and will result in both jobs and improved lives for thousands of New Mexicans is dental therapy.
The Rio Grande Foundation and Health Action New Mexico rarely see eye-to-eye, but on the issue of mid-level dental providers, both organizations are in lock-step support. Legislation will be put forth to address the issue by a bi-partisan group of legislators during the session.
The Rio Grande Foundation has released a new policy brief, “Enchanting, and Affordable, Smiles: Why Dental Therapy is Right for New Mexico.”
The paper, which was authored by Rio Grande Foundation Research Director Dowd Muska, details existing dental issues in New Mexico, including the lack of practitioners in rural communities. One Bloomberg analysis found that 40 percent of New Mexicans live in “dental deserts.” Also, the New Mexico Health Care Workforce Committee found that 18 of the state’s 33 counties have shortages of dentists.
Muska illustrates how the dental-therapy concept — which began in New Zealand — took root in Alaska, and then spread to other states, including Minnesota, Maine, and Vermont. This is a diverse group of states that, while generally in the northern part of the United States, like New Mexico, have large swaths of rural, underserved communities within their borders.
Furthermore, as Muska notes, Minnesota’s program has been in place for enough time to achieve results, including:
In conclusion, dental therapy is a small but significant reform of New Mexico’s occupational-licensing laws that could have potentially large, positive impacts on the dental care received by our state’s rural population.
It was inevitable — and now it’s here.
Throughout the Republic, hiking taxes on gasoline is popular with both Democratic and Republican state legislators and governors. Falling for the “infrastructure” argument, pols claim that the levy increases are “needed” not merely to fix roads and bridges, but to foster “economic development.”
There’s not much truth in that assertion, but it’s not stopping two members of New Mexico’s House of Representatives from pushing potential gas-tax hikes. “Bobby” Gonzales (D-Ranchos De Taos) and Randal Crowder (R-Clovis) have sponsored HB 63.
Currently, only Class A and Class H counties, and the municipalities they contain, can impose local gasoline taxes. Fearing, no doubt, the wrath of voters — who tend to be drivers, too — pols in the dozens of jurisdictions that qualify have begged off, even though potential hikes are limited to 2¢.
Now, Gonzales and Crowder want to allow every county and municipality, with voter approval, to grab more gasoline-tax revenue. And they want to raise the cap, too — to 5¢. If both local governments where you live went to the limit, you’d be paying 59 percent more in taxes at the pump. (The state’s levy is 17¢.)
For years, the Foundation has been in the forefront of exposing gas-tax mania. Looks like there will be plenty of work for us on the issue in 2017. One thing we’re watching is Kentucky’s recent decision to repeal its prevailing-wage law. It’s sure to make taxpayers’ infrastructure dollars go farther in the Bluegrass State. Here at home, no prevailing-wage repeal has been drafted, but the reform bill sponsored by Rep. Bill Rehm (R-Albuquerque) is worth watching.
I was recently in Las Cruces and sat down with Fred Martino of KRWG TV to discuss some of the issues that Rio Grande Foundation is working on and some of the issues facing our State in the 2017 legislative session.
The interview is about 15 minutes and can be found here:
The Rhodium Group is out with its latest look at Chinese foreign direct investment in the U.S. The news was quite good, with Chinese companies investing “a record $45.6 billion in the US economy in 2016. This is triple the amount we recorded for 2015 and a tenfold increase of annual investment just five years ago.”
Unfortunately, no FDI made its way to New Mexico. As the map above shows, since 2000, Chinese investment here, in the form of acquisitions and greenfield construction, has been zilch.
The new bureaucrat hired to head up New Mexico’s “economic development” claims that the Land of Enchantment is “competing with neighboring states today.” We know that’s nonsense, but when it comes to Chinese FDI, it’s laughable. It’s not as if the region isn’t attractive. Texas nabbed investment of $7.1 billion. Oklahoma got $3.7 billion. Colorado ($343 million), Utah ($90 million), and Arizona ($50 million) are “in the game,” too. Energy was a major target of investment, obviously, but information and communications technology, entertainment, and health/biotech were part of the mix as well.
The Foundation has been tracking a national sample of economic-development projects for two years now, and right-to-work states consistently beat their forced-unionism competitors in drawing FDI. For now, Chinese investment is concentrated in the non-RTW Pacific Coast and Northeast. We suspect that will soon change, as Chinese investors discover what their counterparts in Germany, Canada, France, Australia, the UK, Italy, and Japan have known for decades — that states where union bosses don’t rule are good places to do business.
If New Mexico’s spaceport offers “the world an invitation to space,” no one’s RSVPing.
In 2016, the facility launched … nothing. No satellites placed in orbit. No tourists sent on one-of-a-kind journeys. Heck, even UP Aerospace wasn’t able to launch a single sounding rocket last year.
But rest assured, taxpayers, economic-development “visionaries” are doubling down. The Las Cruces Sun-News reports that construction “could start late spring or early summer of 2017” on a 24-mile route from the “Upham Exit of Interstate 25 north to Spaceport America.”
Instead of “investing” more in the spaceport, elected officials should be looking to unload the white elephant. While a new version of the bill hasn’t been drafted yet, let’s hope that legislation akin to 2015’s SB 267 reappears. Sponsored by Senator George Munoz (D-Gallup), the bill would have required the development of “a marketing plan that will advertise and promote the sale of Spaceport America to potential national and international buyers.”
In 2005, Virgin Galactic told The Wall Street Journal that it was hoping its first flight would “launch in late 2008 or early 2009.” Eight years later, the wait continues. Can someone please explain the sunk-cost fallacy to the spaceport’s defenders?
