Here we go again.

New Mexico’s “economic development” brain trust has formed “GrowBio,” to “identify and advance actionable strategies to grow biotechnology businesses in New Mexico to benefit the state’s economy by creating new and high-paying jobs to improve the lives of New Mexicans.”

Dr. Richard Larson, executive vice chancellor at the University of New Mexico Health Sciences Center, told the Albuquerque Journal that the state has “already created the foundations for a strong bioscience industry,” and is now “at the stage where the state and private sector must work together on policies and incentives to move a lot more discoveries from lab to market to help biotechnology startups grow and thrive.”

If the state has a “burgeoning biotechnology industry,” as the Journal claimed, that would come as news to the Biotechnology Innovation Organization, “the world’s largest trade association representing biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations.” In a report issued earlier this year, BIO found that between 2012 and 2014, the number of bioscience firms in New Mexico rose by only 0.5 percent. The number of jobs in the industry fell by 6.9 percent — a sharp contrast to the Land of Enchantment’s neighbors:

Source: “The Value of Bioscience Innovation in Growing Jobs and Improving Quality of Life 2016,” Biotechnology Innovation Organization

Biotech would indeed be a good industry to expand in New Mexico. Compensation is generous and the potential for growth is vast. But “more tax credits for out-of-state investors and funds set aside in the state budget” won’t get the job done. Neither will a “bioscience authority that would establish connections between the innovation community and sources of capital to fund bioscience startups” and a “head of bioscience” for the New Mexico Economic Development Department.

Only sweeping, and high-impact, economic-development policy shifts will attract the kinds of businesses and industries that are needed to rescue New Mexico from its dire economic/fiscal condition. The central-planning approach has been tried. It doesn’t work.

While the national election largely went in favor of Republicans, New Mexico reverted back towards Democratic control of the Legislature. With the exception of a few years of slight Republican majorities in the Senate during the 1980s, Democrats have had an iron-lock on the Legislature since 1954.

So, now that Democrats have re-taken the House, will we see another 52 years of Democrats controlling the Roundhouse? Good question.  The following chart from Rob Nikolewski, formerly the New Mexico Watchdog, would seem to indicate that Democrats are continuing to lose registration while Republicans are holding steady and DTS are growing.

If voting patterns hold along those lines, Republicans in New Mexico should not fret. They will remain competitive and possibly become more competitive in the future. However, there has long been anecdotal evidence for the registered Democrat who sometimes or always votes for Republicans. Perhaps that dynamic is changing? It is hard to say.

There is no doubt that Republicans in New Mexico face uphill battles to get into and remain in office. It has certainly not reached the point of irrelevance as has California’s GOP.

What we do know is that Republican Mayor RJ Berry will likely be replaced by a Democrat in 2017 (Republicans have a big challenge due to changes in the runoff process alone, let alone Berry’s policies). And, in 2018, the Republicans will have to pick up three seats in order to create a tie in the House in an off-year election. And then there is the race for Governor. If Tom Udall runs as is widely speculated, he will be very difficult for the GOP to defeat.

In summary, while the party registration data seem to be moving in their direction, the political situation on the ground is quickly moving in the other direction.

The Foundation is tracking announcements of expansions, relocations, and greenfield investments published on Area Development’s website. Founded in 1965, the publication “is considered the leading executive magazine covering corporate site selection and relocation. … Area Development is published quarterly and has 60,000 mailed copies.” In an explanation to the Foundation, its editor wrote that items for Area Development’s announcements listing are “culled from RSS feeds and press releases that are emailed to us from various sources, including economic development organizations, PR agencies, businesses, etc. We usually highlight ones that represent large numbers of new jobs and/or investment in industrial projects.”

In November, of 16,780 projected jobs, 13,556 — 80.8 percent — were slated for right-to-work (RTW) states:

As for the sub-metrics the Foundation scrutinizes:

* Ten domestic companies based in non-RTW states announced investments in RTW states. Just two announcements went the other way.

* RTW prevailed in foreign direct investment, too. Fourteen projects are headed to RTW states, with five to occur in a non-RTW state.

Marquee RTW investments included:

* Lucid Motors, “a luxury mobility company applying innovative engineering, design and technology to define a new class of premium electric vehicle,” picked Arizona for its manufacturing facility (2,000 jobs)

* Citing “the advantages Arizona offers to businesses in terms of operating costs, light regulation and low taxes,” ADP announced a new operations center in Tempe (1,500 jobs)

* CSRA, an IT firm, dedicated its Integrated Technology Center (800 jobs) and announced it was building a Customer Engagement Center (300 jobs), both in Louisiana

* Credit One Bank chose to build a new, expanded headquarters in Nevada (500 jobs)

Once again, no investments were announced for the Land of Enchantment.

Methodological specifics:

* All job estimates — “up to,” “as many as,” “about” — were taken at face value, for RTW and non-RTW states alike.

* If an announcement did not make an employment projection, efforts were made to obtain an estimate from newspaper articles and/or press releases from additional sources.

* If no job figure could be found anywhere, the project was not counted, whether it was a RTW or non-RTW state.

* Non-border-crossing relocations were not counted, border-crossing relocations were.

At the Rio Grande Foundation we TRY to be positive. Sure, we point out problems, but we also put forth positive reforms that could make a difference for New Mexico’s struggling economy. But challenges are growing and I don’t see policymakers stepping up.

For example, construction is a major economic factor. The Associated Builders and Contractors have ranked New Mexico’s construction climate 50th in the nation. As bad as that is, it is made all the more painful by the fact that in Colorado they are complaining about TOO LOW rates of unemployment in construction while New Mexico’s rate is the 2nd-highest in the nation, FOUR TIMES the rate of Colorado.

But if there are any guarantees about the liberal takeover of the New Mexico Legislature, opposition to “right to work” and repeal of New Mexico’s “prevailing wage” laws may be the most ironclad “non-starters” in Santa Fe these days.

High unemployment means few jobs and few people paying taxes. The positively shocking outcome of that is, as the Legislative Finance Committee noted in its November newsletter: there was a 30 percent drop in general fund balances between October 2015 and October 2016.

Check out the chart below which shows how New Mexico’s revenue situation has worsened dramatically since January of 2016. That is of course when oil prices began their steep decline, but we at the Rio Grande Foundation have been talking for years about our State’s over-reliance on the federal government and oil and gas industries.

The Democrats who recently took over in Santa Fe are eager to raise taxes, but you can’t squeeze blood from a turnip. The productive folks that have remained in New Mexico will just accelerate their migration out of state.

Earlier today, U.S. Sen. James Lankford (R-OK) appeared at a Cato Institute event in Washington. “Cutting Wasteful Spending in the Trump Administration” also featured Citizens Against Government Waste‘s Thomas A. Schatz, the Heritage Foundation‘s Justin Bogie, and Cato’s Chris Edwards.

Unlike last year’s “Wastebook: The Farce Awakens,” a survey of waste, fraud, and abuse compiled by U.S. Sen. Jeff Flake (R-AZ), the latest volume of Lankford’s “Federal Fumbles: 100 Ways the Government Dropped the Ball” doesn’t include a specific fiscal atrocity based in New Mexico. But there are plenty of examples that touch upon public policy in the Land of Enchantment:

● Medicaid, the welfare program that could soon “cover” half of New Mexico’s population, provides “an unlimited supply of federal money” but “no consequences to … state budgets.” As such, it suffers from a severe improper-payment crisis. The Government Accountability Office recently found “enrollees with fake Social Security numbers and payments to people who should not be enrolled because they are either enrolled in another state, are in jail, did not provide accurate information to prove they qualify, or were deceased.”

● The Obama administration has halted “all new coal-mining leases on federal lands.” It’s one of the president’s “seemingly endless list of climate regulations, including the costly Clean Power Plan.”

● The EPA has issued new controls to regulate methane in the oil-and-gas sector. But the industry “is not even the primary producer of … emissions and the main increase around the globe does not even come from the U.S.”

But Lankford’s depressing document offers some hope, such as:

● Along with U.S. Rep. Steve Russell (R-OK), the senator is sponsoring legislation to zero out the Essential Air Service, which receives “federal funding despite studies illustrating that the subsidized flights are often sparsely utilized at a cost of more than $500 per passenger.”

● The U.S. Department of Energy’s National Nuclear Security Administration (NNSA) “has been on the GAO’s [high-risk] list for 25 years, primarily due to inefficient program operations that have cost American taxpayers billions more than they should.” To address the problem, “this year’s Energy and Water appropriations bill … includes language asking NNSA to conduct a review of all projects greater than $750 million.”

Read Lankford’s deep dive into federal dysfunction here.

The Rio Grande Foundation takes a backseat to no one in having a skeptical approach to government regulations. Broadly speaking, it is our view that unnecessary and ill-conceived government regulations are killing New Mexico’s economy and have constrained the US economy as well.

So, it is definitely in the category of “man bites dog” that there is an issue in Carlsbad for which the Rio Grande Foundation believes that necessary regulations may be skirted. The issue involves a proposed potash mine 13 miles Southeast of Carlsbad. The mine would developed by the Mosaic Company. Issues at a Mosaic mine in Florida prompted Governor Rick Scott of Florida to enact sweeping policy changes after the company’s activities created a massive sinkhole leading to 215 million gallons of radioactive water being dumped into the state’s aquifer.

Folks in Carlsbad know better than most how problems can develop from poor siting of mines and discharge points. A potential sinkhole is located at the City’s “South Y” along Highway US 285. The Carlsbad I&W Brine Well operated at the current location almost continuously from 1979 to July 2008, but the mine was forced to close after its process of injecting fresh water into the ground to dissolve the salt and extract brine caused a liquid-filled underground cavern to form.

New Mexico taxpayers face costs ranging from $15 and $25 million to permanently fix the problem.

Now, Mosaic, under a potential agreement with New Mexico’s Environment Dept., is planning on discharging 7.5 million gallons of brine-water a day which comes with the potential of contaminating neighboring drinking, recreational, and agricultural water. The discharge location had been approved by State regulators, but the company has asked to move the site without further study or analysis of the new location.

It’s worth noting that in the wake of recent Mosaic mining activity in Florida and Louisiana the company felt obligated to commit $630 million to pay for closures and remediation projects at certain facilities after the EPA found them in violation of state and federal laws.

Eddy County officials and state regulators must act more responsibly on behalf of the citizens of southern New Mexico to ensure Florida’s misfortunes don’t become New Mexico’s problem.

No one wants economic development to happen in New Mexico more than we do at the Rio Grande Foundation, but we also don’t want to act in haste or desperation in ways that have negative repercussions for New Mexico taxpayers or the environment.

The Associated Builders and Contractors‘ new “Merit Shop Scorecard” just came out and the news is not particularly good for New Mexico. The 2015 placed us dead last (51 out of 51, behind the District of Columbia). We’ve moved up this year, but only to 50th (we beat out Illinois).

See a map illustrating the results below:

Among the ways New Mexico laws fall short are lack of “right to work” and having a “prevailing wage” mandate. Unfortunately, recent changes to New Mexico’s Legislature make it unlikely that anything will be done to address those two issues.

Not surprisingly, New Mexico’s construction industry suffers from the second-highest unemployment rate in the nation. The “good” news is that nearby Colorado has the lowest construction unemployment rate in the nation.

If there’s an image that should be ingrained in the minds of New Mexico’s governor and legislators, it’s the one above. It depicts the number of individuals on the state’s Supplemental Nutrition Assistance Program, more commonly known as “food stamps.”

Since April 2014, the number of SNAP beneficiaries has risen, every single month.

Every. Single. Month.

Nationally, “American businesses have added 15.5 million jobs since February 2010 … the longest streak of overall job growth on record.” The unemployment rate is down to 4.9 percent, and the Dow Jones Industrial Average has soared past 19,000.

But in the Land of Enchantment, the unemployment rate is the highest in the contiguous states, and 26 percent of the population is on food stamps.

In two weeks, legislation for the 2017 legislative session will begin to be prefiled. With no serious alterations in public policies, implemented awfully quickly, New Mexico’s economic, fiscal, and welfare woes are sure to continue.

We are still waiting for the food stamp-induced economic stimulus.

During the special legislative session which was held in October, a push was made to “do something” to apply New Mexico’s gross receipts tax to sales of goods shipped into New Mexico via online vendors. Although the analysis provided by the Legislature is unclear as to exactly HOW GRT would be collected on Internet sales, the intent is clearly there. The provision was rejected by the Republican House, but will undoubtedly return now that Democrats have control of both houses.

I was quoted along with several legislators and others with knowledge of the issue in this article by Andrew Oxford at the Santa Fe New Mexican.

Unfortunately for legislators looking to boost New Mexico’s bottom line, collecting taxes by online vendors is not as easy as it sounds. As I wrote back in 2000 for the National Taxpayers Union, there is nothing exempting Internet sales from taxation. Rather, it is the 1992 Supreme Court decision in Quill which exempts out of state vendors (lacking a physical presence in a state) from that state’s demands to collect and remit taxes to them.

Congress could act to force small businesses to collect these taxes, but a Republican-controlled Congress is not likely to do something that hasn’t been done in nearly two decades including eight years of Democrat control. Looks like legislators will have to look elsewhere for revenue…or, maybe even make some tough decisions to streamline government.

Did you have empty chairs at your Thanksgiving dinner table? We all know people, especially young ones, who have left New Mexico for greener economic pastures. Our States poor business climate is forcing our people out.

Unfortunately, policymakers failed to push through needed policy reforms like “right to work” and school choice in the last few years. Now, with Santa Fe “progressives” now in control of the Legislature, things aren’t going to get any easier. Instead, tax hikes and more spending will be aggressively pushed in Santa Fe.

But, there is hope. Hopefully President-elect Trump’s pro-energy/anti-ObamaCare policies will bring greater economic growth to the United States as a whole, thus helping New Mexico’s economy. A Trump Supreme Court nominee could have great, positive impacts.

No matter what the future holds, you know that the Rio Grande Foundation will be there fighting the ideological battles and making the case for free markets, limited government, and individual freedom.

On this “Giving Tuesday,” I hope you’ll support the charities that you value, but know that it is the free market that can solve most of our woes, especially here in New Mexico.

Click here now to support the Rio Grande Foundation! There is no better way to support freedom in New Mexico.

The Rio Grande Foundation is a 501c3 charitable organization which means that donations to us can be deducted from your 2016 taxes. I hope you’ll support the organization that works to solve the most important problems facing our State. Thank you!

Some day soon, I want young people to be able to find economic opportunities right here in New Mexico so they don’t have to move to economically-freer places like Texas, Utah, or Colorado.

Sincerely,

Paul Gessing
President of the Rio Grande Foundation

According to the Bureau of Labor Statistics, when we “watch television, listen to the radio, read a book or a magazine, surf the Internet, make a phone call or send a text, or see a movie at the theater,” we’re being served by the information industry. The sector has 2.8 million employees, and pays a full-time salary of $77,626.

Unfortunately, jobs in information were badly battered by the Great Recession. Since the end of the downturn, employment has grown in just 14 states.

There’s bad, and then there’s abysmal. New Mexico ranked 43rd in “growth,” dropping by 19.2 percent. The Land of Enchantment roughly matched Oklahoma’s loss of 20.2 percent. Texas and Colorado posted slight declines, but two neighbors — Utah and Arizona — enjoyed significant growth. (See chart above.)

New Mexico’s performance is pretty surprising, given the political-media establishment’s relentless claims that the film-and-television industry here is “booming” and that the tech sector is about to take off.

Billions of dollars in federal “investment” and a hugely expensive incentive program for Hollywood? Not getting the job done, evidently. Maybe school choice, a right-to-work law, tax reform/relief, and deregulation are worth trying?

Source: Holtec International

Election Day brought good news to fans of the Yucca Mountain project. The long-planned but never-built facility was slated to house spent nuclear fuel from the nation’s atomic plants. But for decades, fierce opposition in Nevada — led by Sen. Harry Reid — blocked Yucca’s opening, and in 2010, the Obama administration torpedoed the repository for good.

Or did it? Reid has retired, the reliably pro-Yucca GOP retained control of both chambers of Congress, and restarting the project is “actively being discussed by advisers” to the president-elect’s transition team.

If Yucca is revived, that’s not good news for an intriguing proposal in southeast New Mexico. As regular readers of Errors of Enchantment know, Holtec International is pursuing a “state-of-the-art interim storage facility” not far from the Waste Isolation Pilot Plant. Commercial repositories, spread throughout the country, represent a much better approach than the federal government’s billion-dollar, one-size-fails-all approach. The nationalized, technocratic, Cold War-era strategy has been a disaster for ratepayers, taxpayers, and the nuclear industry. Permanent storage of nuclear “waste” by for-profit entities is the way to go. (Here’s a deeper look at how that might be done.)

Holtec’s proposed facility, depicted above, could make an important contribution to settling the spent-fuel quandary once and for all — and give New Mexico’s dismal economy a boost along the way. For the sake of free-market energy policy as well as opportunity and prosperity in the Land of Enchantment, let’s hope that Yucca stays dead.

The article in the Albuquerque Journal’s “Rio West” section outlines UNM West’s $20 million expansion plans.

The State is mired in a serious budget crunch. Higher education just took a 5 percent hit in the special session held in October. And, New Mexico’s higher education student population is declining rapidly. So, it makes “perfect” sense that UNM Health Sciences Center would be building a $20 million expansion at its West Side campus.

It’s not that the programs and training aren’t necessary or helpful, but New Mexico already spends 6th-most in the nation per student according to 24/7 Wall Street. We simply can’t afford all of these “investments” using taxpayer dollars.

Leslie Morrison’s (listed as a vice-chancellor for academic affairs at UNM Health Sciences Center) comments are particularly enlightening. The facility opened its doors in 2010, yet Morrison stated in defense of the project that “we really wanted to re-energize UNM West, but…it needs more of a focus and it needs to have more students there.”

We couldn’t agree more, but rather than pouring more resources into an ever-expanding array of campuses and branch campuses, it is time for some tough decisions by Legislators and other policymakers. We don’t have enough money to fund what we have. The budget is being reduced and could be reduced even more. Why would we spend even more?

We at the Rio Grande Foundation have taken a keen interest in economic developments in West Virginia. The Mountaineer State has historically had a lot in common with New Mexico (although that is rapidly-changing).

But, in February of 2016, West Virginia did something New Mexico hasn’t and likely won’t do for some time: it went “Right to Work.” Almost on cue, the unemployment rate began to fall in West Virginia (as seen in the chart below).

But, in August, a judge issued an injunction halting law from being implemented and enforced. And again, almost on cue (again as seen in the chart above) West Virginia’s unemployment rate began to move, this time in the opposite direction (higher).

Now, “right to work” laws have been deemed legal all over the nation and three new states, Missouri, Kentucky, and New Hampshire are all in line to adopt similar laws, so it is VERY likely that West Virginia will soon see its law blessed. But, businesses HATE uncertainty and they also don’t like to wait for the legal system to work things out.

Could it all be a huge coincidence? Sure. New Mexico stood pat and has seen some ups and downs (mostly ups) to its unemployment rate, but I’m going to predict that WHEN West Virginia’s law is approved by the courts, the Mountaineer State will leave New Mexico in the dust economically….not just in unemployment, but overall job growth, and other economic measures as well. After all, some have expressed doubts about “right to work” by calling for data from a single state to show whether such laws have an impact (or not).

It would seem we have even more data in the affirmative.

KRQE’s Larry Barker should be commended for his probe of the City of Santa Fe’s Environmental Services Division. The reporter’s four-month investigation revealed that “administrators failed to address hundreds of safety-related defects in many of its older garbage trucks.”

Allowed to peruse “1,400 maintenance and inspection reports for Santa Fe trash trucks,” the New Mexico Trucking Association’s Johnny Johnson concluded that the city’s “fleet is poorly maintained and there is a total disregard for public safety.”

As Barker noted, one of the reasons the city was allowed to be so slipshod is that “government-owned trucks” are exempt from federal regulations. (When the chief of New Mexico’s Motor Transportation Division was asked “if regulated, would Santa Fe’s truck fleet be subject to some kind of compliance action,” the official replied, “Absolutely.”)

But it’s worth stepping back a bit, and pondering a rather basic question: Why does Santa Fe operate refuse trucks at all?

More than half of the nation’s municipalities contract out all or a portion of garbage/recycling collection. The Reason Foundation’s Leonard Gilroy describes the benefits as “cost savings (competitive delivery of solid waste services typically generates cost savings on the order of 20 to 40 percent), enhanced risk management, efficiency or technology improvements, and debt reduction.”

Some recent developments:

* Portland, Maine is exploring the privatization of “of its trash and recyclables as part of a review that is expected to bring major changes to a waste management program that has become increasingly unpopular with residents and municipal officials”

* Hunterdon County, New Jersey, which “has been looking for some time to get out of the waste business,” is looking to “contract with another county, or contract with another private entity” to operate its transfer station

* Fall River, Massachusetts has successfully contracted out trash collection, with the goal of saving “just under $1.5 million in fiscal 2017 and $8.7 million over the life of the [ten-year] contract”

Closer to home, in January, the Santa Fe Chamber of Commerce compiled a list of recommendations to tackle The City Different’s many budget woes. The organization wrote what while “marginally profitable on an operating basis,” the Environmental Services Division could be replaced by firms competent “in the management of both recyclable and disposable waste. Ongoing evaluation of privatization options is warranted.” After Barker’s investigation, such an evaluation is downright urgent.

Love him or hate him, Donald Trump has made it clear that he’s no fan of free trade. And that’s why all those working to boost New Mexico’s woefully underperforming economy need to be concerned.

Trade is arguably the only sector of the Land of Enchantment’s economy on the upswing. Despite the brutality of the Great Recession and a subpar recovery, between 2009 and 2015, jobs connected to the exports of goods — not services, it’s worth noting — more than doubled, according to the International Trade Administration, a division of the U.S. Department of Commerce.

Intel’s products dominate the state’s exports, but a pretty wide range of goods leaves New Mexico for customers aboard — including heavy equipment, medical supplies, compressors, aircraft parts, chemicals, plastics, circuits, and fertilizers. Agriculture plays a big role as well. Among the states, New Mexico is third in the export of tree nuts and ninth in dairy products. We export beef, cotton, and vegetables, too.

The top destination for New Mexico’s exports? You guessed it: Mexico. Israel ranks second, followed by Canada. China lands at #4, with Belgium rounding out the top five.

In September, the Albuquerque Journal reported that exports to Mexico “grew 17.4 percent in the first half of 2016, from $758 million from January-June of last year to $890 million this year,” while sales to Asia “increased by 173 percent from January-June of this year.”

“Renegotiate” NAFTA? Slap a 45 percent tariff on imports from China? New Mexico can’t afford that kind of dunderheaded protectionism.

The Commonwealth Foundation, the Rio Grande Foundation’s sister think tank in Pennsylvania, has released a useful — if depressing — examination of laws and regulations covering states’ government unions.

“Transforming Labor: A Comprehensive, Nationwide Comparison and Grading of Public Sector Labor Laws” explores “11 key measures that directly affect taxpayers and public employees.”

It won’t surprise many, but New Mexico ranks among the 20 states with “collective bargaining that is either legal or required,” as well as “card check” certification, and “some form of binding arbitration during contract negotiation impasses.” New Mexico also permits “release time,” which the American Legislative Exchange Council defines as “the practice of paying a public employee a public salary for time spent in union recruiting and representation activities.”

As the map above indicates, New Mexico’s overall grade of “D” was the worst in our region. Texas received an “A+” and Arizona scored a “B.” Three of our neighbors were “C” states: Utah, Oklahoma, and Colorado.

With state finances a mess and government employment claiming so large a section of the budget — either directly, or through subsidies to counties, municipalities, and school districts — the report arrives at an important time. Serious reforms of “labor” law pertaining to government “service” in New Mexico are a must. Waiting only makes the problem grow larger.

New Mexicans are still discussing and coming to grips with the results of the 2016 election, but government marches on. Bernalillo County’s commission will be voting on Tuesday night on the much-discussed tax increment development district (TIDD) for Santolina. The Rio Grande Foundation has opposed TIDD’s for Santolina. Libertarians and limited-government advocates like Randal O’Toole of the Cato Institute have  long opposed TIDD’s (known elsewhere as TIF).

The graphic below illustrates the gist of how TIF/TIDD work and why they are bad for taxpayers. It is hard to understand why handing $500 million to taxpayers would be a good idea when the New Mexico economy is in such bad shape and population growth is at a standstill.

RGF strongly supports economic development and growing NM’s economy, but not through costly subsidies. If you are concerned about this, feel free to drop your Commissioner a line: commission@bernco.gov

Congratulations on your Election Day victories, new and reelected New Mexico legislators.

How are you going to pay the bills?

As the above chart indicates, the Land of Enchantment is one of 19 states in which Q12016 revenue hauls, adjusted for inflation, have yet to climb back to their pre-Great Recession peaks. The Pew Charitable Trusts found that with a 6.7 percent drop since its apex, New Mexico ranks behind only New Jersey, Michigan, Oklahoma, Florida, Louisiana, Wyoming, and Alaska. (It’s worth noting that the Cowboy State and the Last Frontier derive significantly higher shares of their revenue from natural-resource taxes that New Mexico.)

Will a rebound in oil prices get big dough flowing to Santa Fe again soon? Maybe. But The Wall Street Journal’s recent survey of investment banks concluded that “oil prices will stay below $60 a barrel in 2017.” Not much hope there.

Absent a significant cutback in spending — a right-sizing of the bureaucracy, rollback of Medicaid expansion, sweeping, choice-driven reforms of K-12 education, meaningful reductions in higher education’s out-of-control expenditures, and abandonment of costly, failed programs that claim to foster “economic development” — the only option will be tax hikes. And New Mexico’s left-wing activists are just full of ideas for “revenue enhancement.” The levies on alcohol, cigarettes, vaping, personal income, and corporate profits are in liberals’ crosshairs.

Watch your wallet, taxpayers!

As the Rio Grande Foundation’s Dowd Muska predicted on this page, Santa Fe Mayor Javier Gonzales’s efforts to “explore active ways of reducing sugar intake among … residents” was simply a prelude to a sugar tax. Yesterday those suspicions were confirmed when the Mayor propose adding a 2-cents-per-ounce tax on soda, “sweetened teas and other drinks with sugar.”

Details are not clear on exactly what will be taxed, but soda is definitely on the hit list. Even diet soda will be taxed which makes absolutely no sense at all. Will sugary drinks like those from Starbucks be taxed? Good question. Also, you may not know that orange juice has more calories (153) per ounce than a can of Coke (140). Orange juice will NOT be included in the sugary drinks tax, however.

Rather than taxing at the point of sale, the proposed tax would be levied on distributors. In a shocking display of economic ignorance, Gonzales claimed that “distributors typically won’t pass costs like a tax on to the consumer.” I have no idea where he gets this stuff, but it is completely without basis in fact.

Also, the proposal calls for the funds generated by the tax to be used for that evergreen left-wing policy goal of pre-k/early childhood education. Unfortunately, these programs have proven time and again to be ineffective.

During three hours of Election Night coverage on KSFR, I  was told that Gov. Martinez was “steering” the New Mexico economy over the last six years. My response is that she may have been “steering,” but Michael Sanchez’s foot was controlling the gas/brakes. In other words, the Republicans’ control over policy in Santa Fe was very limited.

For the next two years New Mexico will be among the 13 or so states (pending final results) with both houses under Democrat control. More importantly, the leadership in both houses may shift to Santa Fe where Sen. Peter Wirth is the likely successor to Michael Sanchez and liberal firebrand Brian Egolf may be House speaker.

With these two smart but very liberal Santa Feans at the helm, Gov. Martinez will have her hands full. She may need to add ink to her veto pen but will likely face a barrage of constitutional amendments which circumvent the governor.

Of course, Martinez only has two years in office. The race for governor has already begun and it appears that Sen. Tom Udall is looking to get out of being in the minority in Washington and would rather run for governor here in New Mexico. I can’t blame him and that just means that Republicans will have an even bigger hill to climb to win that race.

It will be interesting to see what the Democrats have up their sleeves to turn New Mexico’s failing economy around. There isn’t enough money (with or without tax hikes) to implement their big-spending “Economic Opportunity Plan” but you can bet that tapping the “permanent fund” will be part of their funding plans.

Given the Democrats’ takeover of New Mexico’s Legislature in Tuesday’s election, the Land of Enchantment looks to be a ways away from any action on “right to work.” Senate Majority Leader Michael Sanchez, an ardent opponent of “right to work” was defeated, but with the House back under Democratic control and the Senate firmly under Democrat control, it will be tough sledding for proponents of free market reforms in the Legislature.

Around the country Kentucky and Missouri now seem primed to become the 27th and 28th “right to work” states in the country.

The trend of states looking to improve their economies by adopting “right to work” continues.

Interesting, but ultimately irrelevant was the failure of the “right to work” constitutional amendment in Virginia. The state is already a “right to work” state. A similar measure passed in Alabama. A South Dakota measure that would have undermined “right to work” was defeated overwhelmingly.

Lastly, it must be noted that with Trump winning the election, he’ll have the opportunity to nominate a conservative justice to the Supreme Court. Justice Scalia’s death caused the Friedrichs case to deadlock at 4-4 which kept some public employees locked into paying union dues even if they didn’t want to be part of the union. Should this or a similar case return to the Court, this would be another important pro-“right to work” development resulting directly from this election.

Trump supporters got what they’d hoped for on Election Day as “The Donald” is now the President-elect. Republicans nationally also performed well holding on to the US Senate and the House.

And, New Mexico Republicans notched some big victories as well. The two most important races were Majority Leader Michael Sanchez who was defeated and Judith Nakamura who won her race thus maintaining her seat on the Supreme Court. If you’d told me going into the election that these two races went the Republicans’ way, I’d have said it was a good night for Republicans in New Mexico…but it wasn’t.

There are still recounts to be held, but the Republicans lost the House and likely lost a few seats in the Senate. In other words, for at least two years and possibly more, the Democratic Party which has controlled New Mexico for most of its history, leading it to 49th and 50th rankings in so many areas, has been given the reins of control again after a mere two years of Republican control in the New Mexico House.

Here are a few of the races that tell the story of Election Day in the New Mexico Legislature.

Rep. Paul Pacheco (R) v. Damon Ely: There will be a recount, but Republican Pacheco is likely out;
Christina Hall (R) v. Liz Thompson: This was a tough race to succeed Rep. Conrad James in a 50/50 district. Thompson won comfortably;
Rep. David Adkins (R) v. Ronnie Martinez: This Northwest Albuquerque race was not on my radar screen heading into election night. Adkins has been a consistent voice for fiscal restraint in Santa Fe. As of this writing Adkins is up by a mere 2 vote margin. A recount will follow.
A few races went well for Republicans. Rep. Sarah Maestas-Barnes won a tough race and Republican Rebecca Dow will succeed Republican Dianne Hamilton, but the Democrats will soon be discussing leadership positions and laying out legislative priorities in the coming 60-day session.

In the Senate, once you get past Greg Baca’s convincing defeat of Michael Sanchez, thinks turn very bleak for Republicans. None of their pickup races in 50/50 districts panned out. Diego Espinoza was thought by many to have an inside track against incumbent Democrat John Sapien. Espinoza lost by 150 or so votes, but there may be a recount. Republican challengers Ceil Levatino and Eric Burton went down to defeat and Ted Barela who had been appointed by Gov. Martinez to fill seat of disgraced former Sen. Phil Griego lost.

Incumbent Republican Lee Cotter had a tough race and got crushed while the biggest shocker was incumbent Republican Lisa Torraco losing.

In summary, with a few notable exceptions, Republicans took it on the chin in legislative races. Gov. Martinez will have
an even tougher time getting any of her agenda passed in Santa Fe. Right to Work and other economic reforms are highly-unlikely. And, while Michael Sanchez may have been singularly difficult to deal with, Democrats will be anything but chastened by these results. They are not likely to give Martinez an inch.

In other words, in a “anti-status quo” election, New Mexico reverted to “status quo” in a big way. More to come on what this means for New Mexico’s economy and the gubernatorial election which is right around the corner.

What if you had a new, popular technology that was creating hundreds of new jobs for New Mexicans in this economically-challenging time? What if, at the same time, this technology was replacing an old, more harmful product that had been detrimental to Americans’ health for decades?

Smart politicians would push to encourage and incentivize this life-saving technology. Unfortunately, the opposite is true. A burgeoning industry could be under attack from bureaucracies in Washington. There is a debate going on right now in Congress over how to fix new Food and Drug Administration (FDA) vapor product regulations that would gravely disrupt the new vaping industry unless those FDA rules are amended.

According to the Centers for Disease Control, 480,000 people die from smoking in the United States alone every year. The health effects of vaping are being studied and debated, but study after study has found the health effects of vaping to be safer than smoking. Vaping has also helped large numbers of people quit smoking.

Senator Heinrich can continue to help improve the lives of hundreds of thousands of people annually by supporting the Cole-Bishop amendment already passed by the House of Representatives in an agricultural spending bill this year. The amendment would prevent the FDA from applying an arbitrary application and approval date – also known as the predicate date – to existing vaping technology. If the Congress fails to fix the FDA rules, our federal government could be complicit in keeping smoking rates higher than they would otherwise be.

Senator Heinrich, along with New Mexico’s delegation as a whole, should work to correct the ill-conceived predicate date of the FDA’s rules.

It is not difficult. Regulators must take their cues from Congress and, while further study and even some reasonable regulations are worth consideration, there is growing consensus that vaping is a safer alternative. For that reason alone, it is impossible to justify the FDA’s currently-proposed regulatory scheme which would effectively prohibit almost all of the vapor products in the marketplace today until they have been subjected to FDA’s complex approval process.

And then there are the jobs. New Mexico faces the 2nd-highest unemployment rate in the nation at 6.7 percent. More than 4,200 New Mexicans lost their jobs in September alone.
While they may disagree on how to do it, New Mexico’s entire Congressional delegation acknowledges the need for more jobs back home. And, when it comes to private sector jobs, two of New Mexico’s real growth areas are in micro-breweries and the vaping sector.

No matter what you think about the viability or morality of these industries, the fact is that people today are demanding unique, locally-brewed beer and unique, safer ways of consuming nicotine. These industries are paying millions of dollars in taxes and employing thousands of people throughout our state. If Senator Heinrich is serious about doing what he can to preserve and expand job opportunities in our economically-troubled state, it would behoove him to help amend the FDA rules so that they do not inadvertently wreck an industry that is providing worthwhile benefits to consumers.

Average New Mexicans, especially vape users, traditional smokers, and those trying to quit, can help by contacting Senator Heinrich and their respective Representative and tell them to “Fix the FDA’s new vaping rules!”

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