On this week’s interview Paul talks to Vance Ginn, PhD. Vance is an economist who worked in the Trump Administration, is Founder and President of Ginn Economic Consulting, LLC, Host of the Let People Prosper Show Podcast, and is Chief Economist or Senior Fellow at Multiple Think Tanks.

Paul and Vance discuss reports claiming that California has a lighter tax burden than Texas, ensuring sounds state budgets, and they even dive into immigration policy.

The Legislative Finance Committee’s post-session fiscal review is a trove of interesting information (translated: expect additional posts using information gleaned from it, but have a read for yourself). One interesting item among many is the chart below which shows that even as the Gov. and Democrats who control the Legislature claim to want to “diversify” the economy and even dismiss New Mexico’s role as an energy state, New Mexico’s budget has become even MORE reliant on oil and gas revenues in recent years.

As the chart below shows, more than 50% of New Mexico’s general fund revenues (nearly $7 billion in 2023) comes from oil and gas. As a reminder, the state’s FY 2023 revenues were approximately $11 million (according to the LFC) but it spent $8.4 billion in FY 2023 (the FY 2024 budget was just passed and that is $9.6 billion).

The Rio Grande Foundation has been tracking and discussing New Mexico’s low workforce participation rate for several years. The chart below covers the time period dating back to pre-pandemic January 2020. As you can see, New Mexico’s rate remains much lower than its neighbors’ rates and both New Mexico and Arizona have NOT recovered from the pandemic.  You can find the raw data here.

In their post-session review, the Legislative Finance Committee also looked at workforce participation rates over time among men and women (using separate data set) and found some troubling info. The following charts are from their report. Although the LFC report does not explain their choices, the following charts show New Mexico’s low an worsening workforce participation rate for groups of prime working age adults:

If you drive around Albuquerque for any length of time you’ll notice a lot of trash. Among the places with the largest amount of trash is bus stops. Well, according to Channel 13, the City is asking for volunteers to help clean up the trash around the City’s bus stops this weekend.

The idea is to prepare for ABQ Pride Parade and Route 66 Summerfest. If you are interested in helping out, that is great, we encourage you to do so.

But it also seems that if the City of Albuquerque is serious about boosting ridership on its buses and generally making the City a cleaner, less-polluted (and perhaps an even safer place), perhaps it is time to redirect some of the $3 million in “free” bus money to pay for clean up and enforcement of litter (and other) laws around bus stops.

Having an “official” presence at bus stops might also have a deterrence effect on the rampant shoplifting for which City buses have become a popular “getaway vehicle.”

On this week’s conversation Paul and Wally discuss the contents of the debt ceiling deal. While they agree that it is better than nothing, their “real” interest now shifts to the political battle between the mainstream and left/right in both parties.

Virgin Galactic had a successful launch last week, but their stock plummeted simultaneously. Why? 

In education-related news, Albuquerque Public Schools adopted a massive $2.16 billion budget last week. The Associated Press discovers “Mississippi’s miracle.” The media (and a new study) falsely claim that pre-K is improving New Mexico education. 

There is an impending battle over a massive Santa Fe solar development. Will NIMBY interests or the environmental activists win?

Over the Holiday weekend negotiators in Washington struck a deal relating to the federal debt ceiling that would suspend the debt ceiling until January 1, 2025. The challenge for House Republicans is that they BARELY have a majority in one house in order to gain leverage on spending and their party has not exhibited fiscal restraint in general (as recently as the Trump Administration).  

While we believe the deal is better than the alternative, the interesting question is whether it ultimately is embraced by enough on the right and left to pass. If not, which side kills it and who is blamed if it is killed. New Mexico’s delegation has (so far) been quiet with the exception of Rep. Gabe Vasquez who represents the most competitive seat and has stated his support for the deal.

Here are some of the key provisions:

Via CNN: Under the deal, non-defense spending would remain relatively flat in fiscal 2024 and increase by 1% in fiscal 2025,

Under the deal, $11 billion in rescinded unobligated Covid-19 relief funds and $10 billion in money shifted from the Internal Revenue Service would be used to beef up non-defense discretionary spending. Also, $10 billion in funds repurposed from mandatory programs and $23 billion that’s designated as emergency funding would be shifted.

The agreement calls for temporarily broadening of work requirements for certain adults receiving food stamps.

Currently, childless, able-bodied adults ages 18 to 49 are only able to get food stamps for three months out of every three years unless they are employed at least 20 hours a week or meet other criteria. The agreement would increase the upper limit of the mandate to age 55 in phases, according to the bill text.

The deal would rescind roughly $28 billion in unobligated funds from the Covid-19 relief packages that Congress passed to respond to the pandemic, according to the House GOP,

Under the deal, borrowers would have to begin paying back their student loans at the end of the summer.

The following appeared in the Roswell Daily-Record on May 21, 2023.

The 2023 New Mexico legislative session was generally disappointing for New Mexicans who wish to see much-needed K-12 education reform. However, it was not a total loss. In fact, one bill did pass that could help thousands of New Mexico families pay for educational options that work best for them. Without a single “no” vote during the 2023 session, HB 342 will soon be the “law of the land.”

The bipartisan bill was sponsored in the House by Republican Minority Leader Ryan Lane and by Democrat Majority Leader Peter Wirth in the Senate. It was signed into law by Gov. Lujan Grisham, also a Democrat. HB 342 aligns New Mexico law with federal law as updated during the Trump Administration and recent legislation under the Secure 2.0 Act.

Over the years Congress has expanded the use of 529 plans to pay for kindergarten through 12th grade tuition and included student loan repayment and apprenticeship program expenses. And in 2023, Congress added a provision to allow rollovers of unused 529 plan funds into a Roth IRA for the beneficiary.

Starting on June 16 when this new law takes effect, New Mexico families will be able to deduct any contributions to their New Mexico sponsored 529 account that will be used to pay for up to $10,000 annually (per-child) on tuition expenses at an elementary or secondary public or private school (making them “qualified” expenses under New Mexico law).

Originally created to help families save for college, 529 plans have been helping families do that for years and will continue to do so into the future. For New Mexico residents, features include the fact that 100 percent of contributions to New Mexico’s plans are deductible from state taxable income in the year contributions were made to the account. If the account owner is a resident of New Mexico, then earnings and withdrawals from their 529 account are also exempt from state taxation.

New Mexico’s educational woes have been well-documented in numerous analyses. Families who are considering 529 plans or if they already have such a plan and want to know more about the latest changes can find out more at The Education Plan website https://theeducationplan.com. The Education Plan is New Mexico’s state-sponsored 529 education savings plan.

The website is informative and Rio Grande Foundation has undertaken its own efforts underway to educate New Mexicans, but it is up to families to either find this information for themselves or talk to a financial advisor.

If you have a child for whom the existing K-12 system is not working and you are considering the financial challenges of paying for school (in addition to the taxes you already pay to fund the schools), you should strongly consider looking at using a 529 plan.

This is especially true since the original purpose of 529 plans may not be as critical as in the past. That’s because many college costs in New Mexico are now covered thanks to the State’s “Opportunity Scholarship” program for “free” college. While nothing is truly free, the prospect of college being heavily subsidized by New Mexico taxpayers may change the financial equation for some New Mexico families who no longer need to prioritize saving for college and instead can use their 529 plan for K-12 tuition at a non-public school.

The Rio Grande Foundation has long been a proponent of increasing the educational options available to New Mexicans. While much work is to be done to improve educational options for families, we are pleased that New Mexico’s Legislature is allowing families to maximize the benefits of 529 plans for K-12 students. It is critical for parents of school-aged children to educate themselves on the benefits of these plans.

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

According to the Santa Fe New Mexican, construction of the proposed Rancho Viejo Solar facility is under consideration on 800 acres of private land about a mile off N.M. 14. Not surprisingly, pushback is already coming from residents who live near the proposed industrial development.

Before construction can begin on the Rancho Viejo Solar facility, the project must gain approval from county officials.

And, as much as the denizens of Santa Fe usually support wind and solar, I expect this to be a  knock-down battle. While often touted as “green,” the reality is that deploying wind and solar takes a great deal of land (much more than a nuclear facility for example).

As this article from the UK Guardian notes, “What was an oasis has become a little island in a dead solar sea.”

Kevin Emmerich worked for the National Park Service for over 20 years before setting up Basin & Range Watch in 2008, a non-profit that campaigns to conserve desert life. He says solar plants create myriad environmental problems, including habitat destruction and “lethal death traps” for birds, which dive at the panels, mistaking them for water.

He says one project bulldozed 600 acres of designated critical habitat for the endangered desert tortoise, while populations of Mojave fringe-toed lizards and bighorn sheep have also been afflicted. “We’re trying to solve one environmental problem by creating so many others.”

While RGF often finds itself at odds with the NIMBY crowd, we support opposition to heavily-subsidized, not really “green” energy.

On this week’s interview Paul talks to Joe Abbin. Abbin is an Albuquerque author and 36 year veteran of the Albuquerque Police Department. They discuss Albuquerque’s crime issues as laid out in his book, ABQ Blues. You can read the book for yourself at the link.

Congratulations to Virgin Galactic for successfully launching their final test flight from Spaceport America today. Shockingly, as noted in the CNBC article and below, the Company’s stock plummeted by more than 8 percent on the news.

One issue MAY be this Motley Fool article (released today) which highlights the precarious condition of Virgin Galactic’s finances and outlines the tremendous pressure facing the company to get its commercial operations going at a rapid pace this summer.

Here is one particularly concerning statement from the story,

Thus, it seems most likely Virgin Galactic will in fact burn through somewhere between $370 million and $400 million in cash through the end of 2023, leaving it with at most $504 million at the start of next year. If the company manages to fly more frequently than once every other week next year, that might be enough cash to last Virgin Galactic through the end of 2024. But if it can’t, it won’t.

At the Rio Grande Foundation we have commented regularly in recent years on the rapid growth in per-student spending at New Mexico school districts. This is driven by two major factors, New Mexico’s massive budget growth and the ongoing decline in student numbers.

Albuquerque Public Schools, the State’s largest district unveiled its FY 2024 budget (next school year) and it’s a doozy. As noted on the APS website, total district spending for the upcoming fiscal year will be $2.16 billion.

According to the just-passed budget (which we obtained) the District’s enrollment will have dropped (again) to 68,902. So, dividing the $2.16 billion budget by 68,902 students gets you a mind-blowing spending number of $31,349 PER STUDENT!

That’s an increase of almost 69% since 2020 PER STUDENT. Will APS or any of New Mexico’s other school districts be able to move the needle on student outcomes or is the State just pouring good money after bad?

The Santa Fe New Mexican recently ran a story touting yet another study which supposedly promotes the benefits of pre-K and early childhood spending. The report is the National Institute for Early Education Research’s State of Preschool 2022 Yearbook. The report claims that New Mexico’s early childhood programs are “a rare bright spot in New Mexico’s education system.”

Does the report tout the success of kids who have gone through New Mexico’s pre-K programs starting in 2005-2006 school year with the enactment of the PreK Act? No, in fact the study doesn’t even consider student outcomes. Everything is based on access, spending, academic credentials, and class sizes. 

Sadly, for nearly two decades New Mexico has had some kind of taxpayer-financed pre-K yet we have no evidence of outcomes one way or the other. We DO know that 2022 NAEP scores were (if anything) a big step backward due to our dead-last overall ranking but this report provides zero evidence that New Mexico’s new universal pre-K system is going to improve our State’s lousy education outcomes.

Virgin Galactic says it will launch its latest mission from the Spaceport on May 25. We wish them the best.

MLG recently spoke to Politico on energy. She made numerous factually incorrect statements. Paul fact-checks her comments and wonders why she’d say so many obviously wrong things. MLG ALSO claimed AR-15’s are “automatic weapons” which is not in fact true.

A California city that has banned gas stoves has exempted a celebrity chef and his new restaurant from the ban.

UNM’s budget explodes thanks in part to “free college.” This is on top of an already big higher education infrastructure.

MLG’s alcohol tax vetoes anger the left (and they’re not entirely wrong).

California’s wet winter/spring could save the west from blackouts and brownouts. 

As the battle continues to wage in Washington over raising the debt ceiling Democrats have claimed that Trump’s tax cuts are causing the budget shortfall. The reality is federal revenues rose after Trump’s tax cuts.

Local advocates argue that “free” buses are working for the City. Based on what?

In May of 2021 we at the Rio Grande Foundation noticed that Mississippi, a state that has traditionally been at the very bottom when it comes to K-12 results, had “moved the needle” on education outcomes. Numerous others have noted the same trend and the AP’s story further highlights how other states have embraced ideas that have helped improve outcomes in Mississippi.

Reforms adopted by Mississippi and others included in the AP report include: “reforms that emphasize phonics and early screenings for struggling kids.”

They “trained thousands of teachers in the so-called science of reading, which refers to the most proven, research-backed methods of teaching reading. They’ve dispatched literacy coaches to help teachers implement that training, especially in low-performing schools.”

“Mississippi, for one, holds students back in third grade if they cannot pass a reading test but also gives them multiple chances to pass after intensive tutoring and summer literacy camps.”

As the AP notes, “Mississippi’s legislation was based on a 2002 law in Florida that saw the Sunshine State achieve some of the country’s highest reading scores.” This, of course is what Rio Grande Foundation pushed at the time and then-Gov. Susana Martinez attempted to get through New Mexico’s union-controlled Legislature.

If Republicans are worried about our national debt, they shouldn’t be trying to extend the Trump tax cuts for the wealthiest of the wealthy.https://t.co/dJm8fK62Zh

— Martin Heinrich (@SenatorHeinrich) May 22, 2023

But, as noted by Daily Signal (using CBO data) federal revenues actually rose after Trump’s tax cuts.

Gov. Lujan Grisham recently appeared via teleconference at an energy summit put on by Politico. You can watch the full video below. As the saying goes, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” So is it the case with our Governor who tends to make her own facts up as she pleases while the media often cover for her. In this post we time stamp her faulty and simply inaccurate statements:

• 4:15: MLG “We’re one of the only states that is moving out of poverty.” Reality: May 3, 2023, Farmington Daily-Times, “New Mexico again had third-highest poverty rate in United States in 2021, State’s national ranking has changed little over last several years”
• 7:45: MLG claims “New Mexico has the largest wind farm in North America” Not according to any information we could find. A January 2023 list of “Top 5 Wind Farms in the United States” did not include a single New Mexico wind farm. A March 2023 article states Roscoe Wind Farm near Dallas is the largest.
• 10:15: MLG claims the vetoed incentives for EV’s etc were “too small.” While RGF AGREES with the Gov. on the vetoes, her environmentalist allies wanted her to keep them in the bill.
• 10:30: MLG claims budgetary pressures forced Kansas to go to “three day school days (weeks)”; The reality is that numerous districts in Kansas have gone to FOUR day school weeks (we couldn’t find any that had gone to three day weeks). According to Fox 4 KC, the option is becoming increasingly popular in KS and MO.

Four Day school weeks do save money, but Lathrop students now have 25 more instructional hours than before, and that’s brought a couple added bonuses.

“Our ACT scores have really shown some improvement. If there was anything, that’s one area we’re up. The first four years, up every year, and five out of the last seven, they’ve been increased.”

The article also noted that “Attendance has also improved for students and staff.”

• • 10:50: “I’ve done $500 million tax cuts, largest in history of the state.” According to the FIR for 2022 tax reduction bill HB 163, the tax cuts signed by MLG will cut taxes by $424 million by FY 2026.” Richardson’s tax cuts of 2003 (passed by a Democrat-controlled Legislature) reduced taxes by $524 million once fully phased in and adjusted for inflation (using the BLS inflation calculator):
  • 14:15: Moderator: Your state is NOT on track to meet its clean energy goals.” MLG, “I think we ARE on track.” At 16:15 still responding to this question MLG states “We have free college.” “I’m producing workers in the renewable energy sector.”
  • 16:43: “New Mexico was framed, and in fact I might…I do disagree with that frame as an energy state and a leader in energy…” On what planet is New Mexico NOT a a leader in energy. Watch her say this within context below:

The Gov.’s full remarks can be found here:

As we’ve discussed in this space, Sen. Martin Heinrich has been a leading proponent of getting rid of gas stoves. But, when it comes to government-imposed inconveniences we all know that certain favored celebrities and wealthy individuals often exempt themselves or are exempted from the most onerous rules and regulations.

So, it was no surprise when media outlets reported that Palo Alto, California (which has a gas stove ban in place) decided to exempt celebrity chef Jose Andres from its ban when the chef threatened the City with a lawsuit.

In her letter to the City attorney Anna Shimko wrote  that (Andres’ proposed restaurant) Zaytinya relies on traditional cooking methods that only natural gas appliances would grant “to achieve its signature, complex flavors.”

We support Chef Andres’ in his battle but only hope that ALL restaurants are exempted from the gas stove ban.

On this week’s interview Paul talks to Jodi Hendricks. Jodi is Executive Director of the New Mexico Family Action Movement (NMFAM). The group is one of the organizations working to put several passed and signed during the 2023 legislative session on New Mexicans’ ballots. We discuss the State’s challenging referendum process which is made all the more challenging by a hostile Secretary of State. What’s behind the bills and efforts to overturn them? How can average citizens get involved? You don’t want to miss this conversation!

According to the Albuquerque Journal’s recent reporting the University of New Mexico’s budget is growing rapidly and hitting new “milestones.” According to the article, main campus’ budget topped $1 billion and the consolidated budget, which includes the university’s massive health system, jumped 9.2% from the year before and was set at nearly $4.1 billion.

Not surprisingly the article attributes main campus’ large increase to the new Opportunity Scholarship (free college) program and a few large construction and improvement projects. You can see past UNM budgets for yourself here, but we were unable to find the proposed FY 2024 budget on the site.

But, even before the recent run-up in spending due to fat budgets AND the new Opportunity Scholarship program,  New Mexico spends a great deal on higher education relative to other states. According to the National Center for Science and Engineering Statistics (NCSES) New Mexico spent $11,564 per-full-time student among states. That’s 7th most among US states.

Of course 2021 is a few years ago and a major expansion of “free” college ago. Will all this new spending “move the needle” for New Mexico’s economy and overall education? We’re skeptical.

At the Rio Grande Foundation we love arguing and debating public policy. That’s how we know we chose the right vocation. But sometimes people defend policy positions that have ZERO basis in fact and don’t even attempt to make an argument. Take the article from the “Zero Fares Coalition” which defends Albuquerque’s “free” bus fares.

The “zero fares” policy is said to benefit numerous groups of low-income people and that “healthy, thriving community relies on accessible, sustainable and safe public transportation for riders and drivers alike.”

Overall, there is zero data showing that zero fares has any positive impact for our community as a whole. What we DO know is that US transit ridership seems to be in a permanent decline and that holds for Albuquerque’s buses (as seen below).

No amount of word salad urging City Council to, “celebrate transit riders by establishing a public engagement forum to deeply explore community-involved public safety options that center lived experience” will make the case for bad policy.

There are many people who we work with and who support liberty in New Mexico who too often go without being recognized. Sadly, the Rio Grande Foundation recently lost three such people who all helped the cause of liberty in their own ways:

Frank Bird was a board member and supporter of the Rio Grande Foundation. He was a former New Mexico legislator and had a long career with IBM as well.

Colin Hunter was an attorney who represented the Rio Grande Foundation in various legal cases over the years.

Joe Loisel was a Retired Army Col. Joe Loisel. Joe was very active in various military auxiliary groups and was a supporter of the Rio Grande Foundation.

The push for increased taxes on alchohol during the 2023 session was led by writers at NM Indepth and several “progressive” legislators. The legislators pushing for higher taxes on alcohol were Sen. Antoinette Sedillo Lopez, D-Albuquerque, and Rep. Joanne Ferrary, D-Las Cruces.

RGF is on the record as opposing increasing alcohol taxes and we share the Gov.’s concern that the tax hike “would not have a material effect on alcohol prevention and treatment.”

But something that received bipartisan support and just makes sense (yet was vetoed) was an effort by Sen. Gerald Ortiz y Pino, D-Albuquerque to shift half of alcohol tax revenues to treating and preventing alcohol misuse, about $24 million at current tax rates, rather than depositing them in the general fund. This was a move supported by advocates, industry, and RGF alike.

This confusing episode only highlights what (for those on the left AND right) amounts to a very mixed bag and hard-to-understand approach by the Gov. with regard to her broader policy goals AND these and other vetoes (not just alcohol policy). It is no wonder that her vetoes left so many scratching their heads even if they supported aspects of the vetoes.

One thing that is abundantly clear is that the advocates for higher alcohol taxes aren’t going anywhere. They will be advocating for higher taxes in the Legislature’s upcoming 2024 session.

NM’s Supreme court weighs in on PNM merger. It will consider the merger itself, not the new PRC. The massive California snowpack could alleviate electricity woes on the Western grid at least temporarily thanks to a boost in hydro-power.

A recent blog from Cato Institute notes that national transit ridership remains depressed and is likely to remain so. Meanwhile, the ABQ Journal decries free buses’ role in facilitating crime. Ford loses $66,446 for every EV it sells. 

Will ABQ become a “shanty town” if Mayor Keller gets his way?

The proposed interim nuclear storage facility in SE New Mexico has been approved. Meanwhile the ABQ Journal editorial board recently called out MLG & the Congressional delegation for opposing the facility.

California’s well-documented snowy winter after years of drought could impact New Mexico’s electricity situation for the better this summer. California. Before the recent drought really got going 12.3% of California’s electricity came from hydro-power. As the bottom chart from the EIA notes California’s drought was having a negative impact on hydro production.

That certainly impacted California’s electricity reliability and it made New Mexico’s energy transition even more precarious. PNM had repeatedly raised concerns about electricity supplies for this summer.

We are by no means “out of the woods” even for this summer. But, California’s hydro-power boom could help stabilize the entire Western grid.