The following article by RGF policy analyst Carter Swanson appeared in the Albuquerque Journal on Friday, February 7, 2025.
More and more New Mexico chooses to stockpile money in permanent funds, rather than spend. The total value of these funds is currently a mind-blowing $58 billion.
This means that the New Mexico State Investment Council has one of the largest sovereign wealth funds in the world, according to the Sovereign Wealth Fund Institute. There are only two states, Texas and Alaska, that have larger funds. It is speculated that in the coming decades, revenue from New Mexico’s permanent funds will surpass revenue from oil and gas.
On its face this sounds like a very good thing, right? And, to an extent, it is. Policymakers like New Mexico House Speaker Javier Martínez, D-Albuquerque, say New Mexico is preparing for the future. Given the volatile nature of oil and gas, that is a prudent thing to do.
But while planning is important, New Mexico has much that needs improving right now. Government spending has grown massively since the oil boom began; our results, however, have not improved all that much. Crime, education and excessive taxation remain problems, and our economy is more dependent on oil and gas than ever.
There are other pathways. Alaska, for example, has no personal income tax or sales tax. In fact, Alaska famously has a constitutional mandate to return a “dividend” to citizens from money generated by oil and gas. Closer to home, Texas is consistently one of the fastest growing states in the nation. It, too, lacks a personal income tax.
There is no reason, with the resources we have available, that New Mexico cannot be more like Texas economically. We could be just as, or even more, attractive and fast-growing if we put our money to work today.
And, with the surplus, there is more opportunity than ever to take action. That is why the massive permanent funds are so frustrating. No one is saying New Mexico shouldn’t set aside some money in permanent funds, but we must also invest in diversifying and growing New Mexico’s economy today.
Having socked away such a massive pot of money implies that things are perfectly fine now, which sadly is not the case. At the very least, easing the tax burden on New Mexicans seems like an obvious next step.
The state certainly doesn’t need more income, yet there’s no relief in sight. The governor continues to barrel ahead, with no consideration for New Mexico’s prosperity.
The future our government is saving for — one that will apparently rely heavily on government funds — is a bleak one. Investing in economic prosperity and freedom now, when we can afford it, is the most surefire way to ensure that we are a prosperous state in the years to come.
Carter Swanson is a policy analyst with 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.
To say that Gov. Lujan Grisham’s education policies have failed would be a massive understatement. Look no further than New Mexico’s abysmal (worst in the nation) education results in the last TWO National Assessments of Educational Progress.
With time ticking on her time in office as Gov. Lujan Grisham seems to be pivoting towards attempting to be an education reformer. This has certainly NOT been the case where she has never lifted a finger to push Mississippi-style education reforms or broad-based school choice (we’d welcome a move to that end). But check out these quotes from a recent Albuquerque Journal story (items in parentheses are RGF comment):
On the issue of public schools, Lujan Grisham expressed frustration about what she described as a lack of transparency in how more than $4 billion in state funding is spent, saying it’s up to local school boards to decide how dollars that flow through the state’s funding formula are put to use. (interesting tactic to shift blame to local districts)
“I have no power over schools, in the same way I can’t tell judges what they should sentence nor can I tell a police officer who to arrest,” Lujan Grisham said. (again, simply untrue)
She also claimed the House and Senate education committees, which are both led by current or retired teachers, have effectively bottled up many education initiatives in recent years.
“You’ve got a lot of former educators and superintendents who aren’t interested in changing anything,” she said.
Specifically, the governor called it “unethical and a huge conflict of interest” for current and former educators to be voting on education funding and other initiatives as legislators. (these are absolutely true statements, but also the FIRST time we have seen the Gov. publicly criticize members of her own party for their approach to education).
At the Rio Grande Foundation we have watched as money has been poured into colleges and universities with no accountability and for little to nothing in terms of real results for our broader economy. Now, with massive subsidies in place and “free” college the law of the land, some legislators in Santa Fe have introduced SB 268 which would allocate $2.5 million to each of New Mexico’s “major” universities (UNM and NMSU).
While Sen. Maestas (the sponsor) claims it would be funded with “free” money thanks to the oil and gas industry, the reality is that New Mexico’s Legislature is doing NOTHING to return tax dollars to everyday New Mexicans. Thankfully, KOAT’s story includes some back-and-forth on what should be done with the money. RGF believes it should be tax cuts (including reform of the GRT and income tax reduction) but we’d take whatever we can get at this point.
RGF’s president Paul Gessing sat down with KOAT Channel 7 to discuss whether spending tax dollars to pay UNM and NMSU athletes more directly is a wise move. Click the photo below or click here to watch the story.
Judge Dustin K. Hunter issued a temporary restraining order against the rule last spring after the New Mexico School Superintendents Association sued PED over a rule requiring 180 days of instructional time per school year.
The Rio Grande Foundation had been among those who believed in local districts should determine how districts comply with the Legislature-passed hours in the classroom requirement. The Gov. and PED were never empowered by the Legislature (and in fact the Legislature acted in opposition) to forcing the 5 day week).
This is a win for local control and sanity in education policymaking. Will the Gov. appeal? Only time will tell.
SB 23 which would allow for increased royalties (a form of tax specific to oil and gas) on lands managed by the State Land Office. The bill is up in Senate Conservation Committee Tuesday morning. Click on the link to the Committee page and send the committee staffer an email in order to testify.
Land Commissioner Stephanie Garcia Richard, a Democrat, has been waging a years-long campaign to force the Legislature to increase the percentage oil and gas companies must pay to her office. So far, the Democrat-controlled Legislature has refused, but the issue has come up once again in 2025. Garcia Richard believes that New Mexico should charge royalty rates comparable to those charged in Texas.
But, comparing royalty rates of Texas to New Mexico is not straightforward:
While NM state royalty rates range from 12.5% to 20.0% (and Texas sits at 25% for their state lands), New Mexico carries THE highest overall tax burdens on oil and gas production when compared to Texas, and all other states.
Regardless of rates, RGF would only note that New Mexico is sitting on $58 billion from the oil and gas industry. Sadly, existing revenue from the ongoing boom is currently NOT being used to benefit New Mexicans. There is NO reason to raise royalty rates when New Mexicans are experiencing so few benefits from existing oil and gas royalties.
As the Rio Grande Foundation continues to analyze the recently released National Assessment of Educational Progress (NAEP) data released last week we again look at Mississippi which (unlike New Mexico) fully embraced the so-called “Florida model” for education reform. This model was originally pushed in New Mexico with the support of Republican Gov. Susana Martinez and Education Secretary Hannah Skandera.
Mississippi, a state with many of the same social and economic issues as New Mexico, became known as the “Mississippi Miracle” thanks to its dramatic improvement in educational outcomes, especially in the area of reading. While it was not a “school choice” driven miracle, Mississippi’s outcomes were the result of complete buy in to things like phonics based learning, an end to social promotion, and teaching teachers how to teach phonics correctly (among others).
As can be seen from the chart below, Mississippi and New Mexico had similar 4th grade reading results back in 2011 but New Mexico suffered massive declines thanks in part to Gov. Lujan Grisham’s COVID policies which locked New Mexico students out of their schools for over a year. Mississippi saw a slight dip during COVID, but has rebounded and seems poised for further improvements.
RGF has written extensively about the “Mississippi Miracle.” New Mexico should follow Mississippi’s lead and add to their reforms by embracing school choice as well.
On this week’s interview Paul talks to Andrew Handel of the American Legislative Exchange Council (ALEC) about the new 2025 Education Freedom Index which he authored and his organization published. New Mexico ranked a poor 44th in the latest version of this index.
The National Assessment of Educational Progress (Nation’s Report Card) scores released this week were depressing for New Mexico as we ranked dead last in each of the categories tested (4th grade reading/math and 8th grade reading/math). Someone put together a cumulative index of all 50 states and categories which you can see below. It isn’t pretty but it is useful.
The following chart put together by the Rio Grande Foundation uses data from the Alliance for Automotive Innovation which tracks EV sales on a quarterly basis. In 2023 Gov. Lujan Grisham pushed a statewide EV mandate through an unelected board. The full impact of the mandate is expected to kick in later in 2025 when 2026 model year vehicles start appearing on dealer lots.
As you can see below, while New Mexico EV sales have risen slightly through the third quarter of 2024 current EV sales and their rate of increase is nowhere near enough to comply with the Gov.’s mandates. Assuming that no federal or state changes are made to this mandate New Mexico auto dealers will face a requirement to sell vehicles that are either not available to them or that are not desired by prospective buyers who will instead head to neighboring states like Texas to purchase the vehicle they want.
This will destroy New Mexico jobs and tax revenues without any positive impact on the environment.
Get there a bit early as Mr. Shapiro has to leave promptly at 1pm.
Event Description:
In the past, Columbia Law School produced leaders like Theodore Roosevelt, Franklin Delano Roosevelt, and several Supreme Court justices. Now it produces window-smashing activists. This cannot continue. Ilya Shapiro will discuss how the illiberal takeover of legal education is transforming our country. Unless we stop it now, the consequences will be with us for decades.
The problem is bigger than radical students and biased faculty—it’s institutional weakness. Shapiro met the mob firsthand when he posted a controversial tweet that led to calls for his firing from Georgetown Law. A four-month investigation eventually cleared him on a technicality but declared that if he offended anyone in the future, he’d create a “hostile educational environment” and be subject to the inquisition again. Unable to do the job he was hired for, he resigned.
Ilya Shapiro will discuss how we got here and what we can do about it and his new book, Lawless: The Miseducation of America’s Elites.
About the Speaker:
Ilya Shapiro is Director of Constitutional Studies at the Manhattan Institute. Shapiro is the author of Supreme Disorder: Judicial Nominations and the Politics of America’s Highest Court (2020), coauthor of Religious Liberties for Corporations? Hobby Lobby, the Affordable Care Act, and the Constitution (2014), and editor of 11 volumes of the Cato Supreme Court Review (2008–18). He has contributed to a variety of academic, popular, and professional publications, including the Wall Street Journal, the Harvard Journal of Law & Public Policy, the Washington Post, the Los Angeles Times, USA Today, National Review, and Newsweek.
He also regularly provides commentary for various media outlets, is a legal consultant to CBS News, and once appeared on the Colbert Report. Shapiro has testified before Congress and state legislatures and has filed more than 400 amicus curiae “friend of the court” briefs in the Supreme Court, including one that The Green Bag selected for its “Exemplary Legal Writing” collection. He lectures regularly on behalf of the Federalist Society, was an inaugural Washington Fellow at the National Review Institute, and has been an adjunct law professor at the George Washington University and University of Mississippi.
He is also the chairman of the board of advisers of the Mississippi Justice Institute, a barrister in the Edward Coke Appellate Inn of Court, and a member of the Virginia Advisory Committee to the U.S. Commission on Civil Rights. In 2015, National Law Journal named him to its 40 under 40 list of “rising stars.”
Cancellation policy: Cancellations made by 12:00pm MDT on February 7, 2025 will be honored, minus a 15% processing fee.
Michelle Lujan Grisham’s failed COVID lockdowns did serious harm to already-lagging New Mexico student outcomes in the 2022 National Assessment of Educational Progress (NAEP) in which New Mexico students were ranked last across ALL categories 4th and 8th grade reading and 4th and 8th grade math.
With the release of 2024 NAEP numbers we see yet again that New Mexico students rank at the VERY bottom in each of the same categories.
In 4th grade readingNew Mexico scored 201 which ranked us 52nd (behind all 50 states, DC, and DoD schools). Alaska students were 2nd lowest at 202.
In 8th grade readingNew Mexico scored 245 which again ranked us 52nd. Alaska students were again 2nd-lowest at 246.
In 4th grade math New Mexico scored 224 which again ranked us 52nd. Alaska students were again 2nd-lowest at 226.
In 8th grade math New Mexico scored 256 which again ranked us 52nd. West Virginia at 261 was 2nd-lowest.
The American Legislative Exchange Council (ALEC) has put out a new Education Freedom Index which ranks all US states on their level of education freedom. New Mexico came in 44th in the 2025 index. That is a dramatic decline from our 35th ranking two years ago. The authors changed the report slightly to more heavily weight private school choice like Education Savings Accounts, vouchers, and tax credits, none of which are in place in New Mexico.
Other areas analyzed (including New Mexico’s grade) are:
Charter Schools (C)
Home Schooling (B)
Virtual Schooling (D)
Open Enrollment (F)
You can see the map of overall rankings and the list of rankings below. New Mexico shows no signs of improving based on the current political climate while Texas is expected to soon embrace school choice in a big way.
One particular area of concern is the cost of in-home services (below). This is undoubtedly driven by New Mexico’s burdensome gross receipts tax, high minimum wages in the cities, and low workforce participation rate. All of these unnecessarily boosts cost of labor-intensive services. New Mexico’s overall living costs were neither high or low, but typically New Mexico is seen as a low-cost option relative to other states. Not in this area.
And, of course there is crime. And, while seniors are not particularly sensitive to failing schools in New Mexico or elsewhere they ARE impacted by New Mexico’s high crime rate, especially property crime. According to the graphic below our property crime rate is 4X that of Idaho.
Check out this new report from Axios which looks at median pay by state across the nation. The report uses data from payroll provider ADP’s monthly “Pay Insights” data and is based on gross wage and salary data for about 17 million U.S. jobs.
As our friends at the Committee to Unleash Prosperity note: The top three states based on the median-sized worker paycheck are:
Washington, DC: $100,800
Massachusetts: $75,700
Alaska: $70,000
Furthermore, as the Committee notes, “DC residents also earn twice as much as the median earner in 13 states. New Mexico’s workers can’t be too happy. DC workers now make nearly two and a half times as much as the average New Mexico resident.
This is yet another indictment of New Mexico and its poor economic management. It is also an indictment of how big, powerful, and awash in cash our federal government is and that it and its power need to be downsized. Of course, (ironically) New Mexico (like Washington, DC) is heavily dependent on federal dollars. Sadly, even WITH our large federal presence New Mexico’s median wage is LOWEST in the NATION.
In years past (especially 60 day sessions) things tended to start slowly. Considering the left-leaning makeup of New Mexico’s Legislature this was a good thing. No longer.
Below is a screen shot of some of the bills we’ve rated for our Freedom Index. They are already beginning their legislative journeys this week with their first committee hearings. The strategy seems to be to overwhelm opponents (like RGF) and our supporters who simply cannot engage on every bill with our limited resources.
So, if you are curious about any or all of the following bills which will all be up for hearings this week, go to the Legislature’s website and reach out to the proper committee (or attend the hearing in-person or virtually). As you ca. n see, all of these bills have been labeled “extreme” by RGF. Most of them impact the oil and gas industry that keeps New Mexico afloat and fuels America’s domestic energy growth.
While ALL of these bills are unlikely to pass, even one or two of them passing could be devastating for New Mexico.
The theme of the 2025 legislative session so far is that Democrats who control majorities in both houses are going to push their biggest, worst bills as quickly through the 60 day session as possible.
Net Zero is coming up on Tuesday (SB 4) which would make New Mexico “net zero” in terms of CO2 emissions (and destroy our economy) is up for its first committee assignment in (Senate Conservation Committee).
According to Stanford University reaching net zero globally would cost $120 TRILLION. Of course, many of the biggest polluting nations in the world (China and India to name two) have ZERO interest in net-zero and will continue to grow their economies and their CO2 emissions regardless of what happens in New Mexico. Of course, the US as a whole continues to see reductions in CO2 emissions even in the midst of an oil and gas boom which has its epicenter in NM.
These bills are BOTH rated -8 in RGF’s Freedom Index.
The following is directly from Wednesday’s Santa Fe New Mexican. It is a exceedingly gentle fact check of some of MLG’s biggest whoppers during her State of the State address. We did our own analysis of her speech here.
As the fact check below notes, MLG AGAIN made bold claims about poverty reduction in New Mexico. What the New Mexican fails to clarify is that there simply was NO reduction from 50th to 17th in New Mexico’s child poverty rate. We have written on this extensively and it is simply pathetic that the Gov. continues to make this claim.
And, of course the Gov. wants people to believe that CYFD’s myriad failures are a funding issue when of course New Mexico has been flooded with resources.
Finally, as Joe Biden so regularly did, MLG likes to claim every job destroyed by COVID and recovered since then was her doing when in reality New Mexico’s job growth has been modest.
On this week’s interview Paul sits down with Zach Fort. Fort, a return guest on Tipping Point NM, handles legislative affairs for the New Mexico Shooting Sports Association. They discuss threats to gun rights, crime and whether genuine efforts to fight it will come about it in the the 2025 legislative session as well as Gov. Lujan Grisham’s status as the most anti-gun governor in the entire country.
As they have in a few recent legislative sessions the “progressive” left in Santa Fe is pushing paid family leave. As in years past Rio Grande Foundation is part of the grassroots coalition (The Coalition for Working Families) working to stop this horrible bill which would:
Impose new taxes on employees;
Impose new taxes on employers;
Allow for up to 12 weeks of paid leave ANNUALLY;
Create a fund that analysts say will go insolvent in the near future (thus requiring additional tax hikes).
RGF will be sure to alert you to how you can help us stop this horrendous legislation (HB 11) here at Errors of Enchantment, but if you want to get MORE involved in the effort we encourage you to sign up for alerts from the Coalition.
The bill failed by two votes last session with a bipartisan coalition opposing it in the House. We expect this to be a hard-fought battle once again.
Albuquerque’s bus ridership continued to slowly rebound from the COVID 19 pandemic in 2024, but as with the Rail Runner, ridership remains well below pre-pandemic numbers.
The Rio Grande Foundation requested and received publicly-available ridership records showing that ridership on the city bus system crept over 7 million for the 2024 calendar year. That’s a 12.6% increase from 2023 to 2024. But, bus ridership remains nearly 22% below where it was in 2019 (the last full year before COVID).
Notably, starting in January 0f 2022 the City began offering “free” bus fares which the City claims has boosted ridership, but bus ridership actually lags behind even the RailRunner in terms of where it stands relative to 2019.
In an effort to better understand exactly where New Mexico is heading during her final two years we took a close listen to MLG’s State of the State address which took place on Tuesday. We watched it in its entirety. Here are a few thoughts. For starters, it is worth noting that MLG does not mention paid family leave which has been a priority of the “progressives” in the Legislature. Stopping that is RGF’s top priority and we are hopeful that perhaps MLG is not going to push the issue. She also does not discuss tax cuts except for cuts targeted at one specific group (see below).
MLG is very excited about NM potentially seeing an improvement in its bond rating. Of course this is due to the revenue boom from oil and gas which she omits. She also omits ANY mention of returning part of the budget surplus to the people of New Mexico.
MLG cites New Mexico’s “Cradle to Career Education System which includes a Right to Child Care, Universal Pre-K, and Free College.”
She repeatedly applauds “a right to child care” and repeatedly refers to “universal pre-K” as “child care.” She even asks for $205 million MORE to make “child care” truly universal (what happened to the money already allocated from permanent fund or the Early Childhood Permanent Fund)? Finally, it is interesting she calls it “child care” and not “pre-K.”
MLG touts an 11% increase in reading proficiency thanks to last summer’s reading program. She offers no data backing this up nor does she cite where this number comes from.
She urges the Legislature to fund the 180 day school year which she has tried to mandate (no 4-day school weeks).
She asks the Legislature for $50 million to directly fund tribes and pueblos to provide educational services through the Indian Education Fund.
She again cites “Free child care, free pre-K, free school meals, free college, child tax cred, & working family tax credits as benefiting New Mexico families.”
“When you take into account the investments we’ve made in recent years our poverty rates drops to 17th in the nation, better than the national average. She’s fine until she states “50th-17th two years and says “check the numbers out.” Where? We have critiqued her claims and attempted to find any evidence for her claims. Good luck finding a state ranking of the supplemental poverty measure by state.
In an interesting move she calls for the Legislature to exempt foster families from personal income tax and double stipends for foster families.
She wants to create a state sponsored fire insurance fund which is a bad idea.
She wants to fund a Strategic Water Supply that would involved using frack water for various non-consumption-based uses. This seems like a reasonable idea.
She urges the Legislature to make New Mexico “Net Zero by 2050” which is a terrible idea.
MLG urges regulatory and zoning changes to make building housing easier plus (a good idea). She also pushes for $50 million in subsidies + a new state housing office (both of which are not needed).
She asks for $50 million to fight homelessness. We need more enforcement, not more funding.
MLG asks for a tax credit for businesses that invest in anti-crime efforts including things like private security. Leveraging private crime fighting is a worthwhile idea.
MLG notes that New Mexico medical malpractice rates are 2X national average. Rather than taking that head-on by addressing venue shopping and other issues MLG urges the creation of a state sponsored (taxpayer-funded) medical malpractice program.
The Gov.’s address doesn’t start until the 1:45 mark
