A few months ago in this space we commented on the relative lack of problems associated with the massive influx of illegal immigrants that has taken place during the Biden Administration. Now, according to a new Census Bureau report, capably covered by Newsweek, New Mexico appears to be the ONLY state in the nation to have seen a drop in the number of immigrants living here.

Of course, it is important to differentiate illegal from legal immigrants. Like native born Americans legal immigrants have plenty of choices as to where to live and work. As the story notes:

Newsweek spoke to Christopher A. Erickson, the director of New Mexico State University’s Center for Border Economic Development, about the reasons behind the decrease in the state’s foreign-born population.

“The primary motivation for foreigners to immigrate is to find a good paying job,” he said. “New Mexico is a low-income state with relatively slow job growth. This makes it less appealing for foreigners.”

The annual employment growth between 2012 and 2022 was 6.8 percent on average, added Erickson. The state also ranks 44^th for per capita disposable income, according to research by Statista.

We couldn’t have said it better ourselves. In terms of illegal immigrants, they certainly ALSO look for job opportunities, but often must live in the shadows. From a policy perspective the US needs to address both border security and immigration policy, but overall this report simply reinforces what we already know: New Mexico’s economy is not particularly attractive to native born and immigrant alike.

The annual Rich States, Poor States report analyzes all 50 states based on dozens of economic data points. It is arguably the most thorough analysis and ranking of both past data and future economic prospects for all 50 states. Check out the report here and New Mexico’s data here. It is no surprise that New Mexico badly lags each of its neighbors in the report. Sadly, New Mexico’s economic outlook remains mired at 38th despite the ongoing oil and gas boom. Here are the ranks for outlook among the states neighboring New Mexico:

Utah: 1
Arizona: 3
Colorado: 17
Texas: 6
Oklahoma: 9
New Mexico: 38

There is a lot of data in the report, but the following chart shows what went in to compiling New Mexico’s current economic outlook.

The following compares New Mexico’s economic performance with neighboring Arizona. Not surprisingly Arizona outperformed New Mexico on 17 of the 19 metrics studied.

On this week’s interview Paul talks to Nella Domenici. Domenici is the Republican Party candidate for US Senate in New Mexico. She is longtime Senator Pete Domenici’s daughter. Paul and Nella discuss what that was like and what formed her politics, her activism and efforts to reform education in New Mexico, and her candidacy for the US Senate and the issues she has with the incumbent.

New Mexico’s House Republicans have elected new leaders. Paul and Wally know the players and discuss.

While I-40 crumbles NM asks feds for $250 million to reduce emissions on I-25.

The left doubles down on EV mandates. MLG touts EV mandates (the transition is “inevitable” but must be subsidized and mandated). Tesla’s dropping sales, MLG/Biden mandates outstrip estimates.

NM ranks 30th overall in Wallethub tax burden report.

APD garners national headlines for wrong reasons but the City Council fails to hold Chief Medina accountable as the department continues to languish…due to lack of accountability.

RGF hosts an upcoming luncheon in Albuquerque and a dinner event in Roswell on April 22nd. Find out more about the book being discussed here.

Sometimes even the New York Times figures out that government wastes big bucks on “economic development” schemes. A recent story from the Times a few paragraphs of which are highlighted below makes the point:

“(Film subsidy) programs are actually huge money losers for states. Studies show that these efforts typically return a quarter or even a dime on every dollar given to studios.” New Mexico is not mentioned in the story, but is among the US states with the very most generous subsidy programs. The Rio Grande Foundation has often criticized New Mexico’s largesse to the millionaires and billionaires that primarily benefit from film subsidies, but with plenty of oil and gas money to throw around and little accountability from the populace in terms of bringing actual economic growth and prosperity to the state, the program has expanded dramatically since the days of Bill Richardson.

As we’ve written before in this space the Biden Administration’s policy failures are frequent and often conflict with their stated policy objectives. Perhaps no other single policy move by the Biden Administration has as many downsides and fewer upsides associated with it than his decision to pause permits for LNG export exporters.

The following story from Nikkei Asia highlights how completely insane Biden’s policy is:

In Japan, South Korea, Singapore, Taiwan and Thailand, LNG has an established role ensuring energy security and economic stability, while also providing the foundations for a low-carbon future.

Massive volumes of coal must be displaced through the 2030s and beyond across emerging Asia to achieve the region’s net-zero aspirations. This inevitably will mean substantial gas imports.

India, Vietnam and the Philippines are among the fast-growing Asian nations that plan to increase the role of gas in their economies through LNG imports as a reliable complement to renewable energy investment.

Biden’s policy is harmful to the environment, the US economy, and to our foreign policy efforts especially as relates to the Russia/Ukraine conflict. The US House took a vote on legislation to overturn the Biden Administration ban. Not surprisingly New Mexico’s extreme leftist delegation all voted against the State’s (and nation’s) best interests. New Mexico is a top natural gas producing state.

Who supports the ban? Of course, radical environmental groups which form the most powerful interest group in the Democratic Party coalition.

Are Albuquerque’s police to be held accountable or not? Over the span of nearly a decade James Ginger has been paid handsomely to “monitor” reforms to Albuquerque’s Police Department. The idea is to provide accountability and oversight for APD’s reform process. Police accountability has been a watchword on the left leading so far as to left-wing voices here (as they have nationally) to call for “defunding the police.”

Sadly, the left’s push for police accountability seems highly situational. In fact, when Police Chief Harold Medina caused a near-fatal accident, the Albuquerque City Council on a 5-4 vote (with all the “progressives” and Democrats joined by Councilor Brook Bassan opposed) killed a proposal to have an outside third party investigate the incident. So, instead of an outside agency like New Mexico State Police or Bernalillo County Sheriff’s Office investigating Medina’s dangerous behavior and crash we’ll get an internal investigation carried out by APD.

Jacob Sullum of Reason takes a closer look at the situation and ongoing concerns about Medina’s behavior both during the crash incident and in other areas (like the DWI scandal) in an excellent article.

In a move that was hardly surprising, New Mexico’s unelected Environmental Improvement Board and the even more radical (also unelected) ABQ/Bernalillo County Air Quality Board chose to move forward with the EV mandates they adopted back in November. Those mandates are for 43% of new vehicles sold in New Mexico to be electric starting in the summer of 2026 (just over 2 years from now).

Those mandates are widely seen as unattainable by auto industry insiders and car dealers alike as interest in EV’s wanes among consumers. But, Gov. Lujan Grisham and her cadre of radical environmentalists and left-wing advocates remain dedicated to pushing forward no matter what it costs consumers, taxpayers, or how many job losses are inflicted on auto dealers.

According to the most recent information available EV sales in New Mexico now account for 4.82 percent of all vehicles sold in the state. That means a nearly ten-fold increase in EV sales must occur over the next two years.

Yesterday, MLG and some of her radical friends like Jim DesJardins, the executive director of the Renewable Energy Industries Association, held an event at which (according to KOB TV) they “discussed green energy and how the state can become less dependent on the oil and gas industry.”

If they are talking limiting usage of oil and gas in New Mexico, they may be able to move the needle slightly, but if they mean making New Mexico government and the economy less dependent on oil and gas, that’s not going to happen anytime soon.

But, mostly the Gov. and her allies talked subsidies and mandates for EV’s. According to the article, here are just a few of the subsidies and mandates for EV’s:

$100 million for EV charging.

$20 billion being distributed by the EPA for renewable energy initiatives.

The Inflation Reduction Act will provide $369 billion for states and how NM can get some of that cash.

As usual, the “transition” was deemed “inevitable” which in a sane world would preclude the need for massive subsidies and mandates. But, we don’t live in a sane world, so Jim DesJardin said, “it is going to happen so we need to plan for it, we need to take advantage of it, we need to do everything we can to make it so it can be done as best as possible for the state of NM.”

On this week’s interview Paul talks to William L. Kovacs. Kovacs was senior vice president for environment, technology & regulatory affairs for the U.S. Chamber of Commerce and a chief counsel on Capitol Hill. Kovacs has written three books including his newest, “Devolution of Power: Rolling Back the Federal State to Preserve the Republic.” In this book Kovacs asks a basic question: Can a mismanaged federal government unite a polarized nation? If not, how do we divide? Check out this informative conversation with a former political insider.

Author Bjorn Lomborg posted the chart below on social media (based on data here). As it shows, even the Biden Administration’s own numbers show that both MLG’s and Biden’s plans to force EV’s on New Mexicans and Americans alike. MLG’s mandate is for 43% of all vehicles sold in New Mexico to be EV’s by summer of 2026. That’s more than EIA estimates will be sold globally by 2050.

Ironically, as Lomborg points out, the federal government’s own numbers show a MUCH slower uptake of EV’s by Americans.

In other news EV company Tesla saw its first year-over-year drop in sales (excepting the Pandemic). According to Yahoo Finance, “Most of Tesla’s recent wipeout reflects concerns about flagging demand for EVs.”

According to CNN, General Motors reported Tuesday that its US EV sales fell 22% in the quarter compared to a year earlier.

UPDATE: Tesla has canceled the long-promised inexpensive car that investors have been counting on to drive its growth into a mass-market automaker, according to three sources familiar with the matter. The stark reversal comes as Tesla faces fierce competition globally from Chinese electric-vehicle makers flooding the market with cars priced as low as $10,000.

According to Wallethub New Mexico’s overall tax burden is 30th-highest in the nation.

Specifically, New Mexico’s property tax burden ranks 44th, it’s income tax burden is 40th (both of these are relatively good), but the sales/grt tax is 4th-highest overall.

30th is indeed a relatively low tax burden when compared to other states, but the situation could be so much better. For starters, the oil and gas industry alone generated $13.9 billion in revenue for the state in 2023. New Mexico could and should have a much lower tax burden overall. No other state has a budget that could easily be covered by oil and gas taxes alone.

Furthermore, while NM’s income taxes aren’t particularly high not only is the GRT high, but it also is a tax that impacts businesses.

Finally, as Milton Friedman pointed out, “The true size of government is measured not by how much it rakes in currently in taxes by how much it spends.” To grow and diversify its economy New Mexico could and should reduce taxes, especially by reforming and reducing the GRT. But to really spur economic growth New Mexico needs to reduce the size and scope of government.

On this week’s Tipping Point conversation Paul and Wally discuss:

NM SIC invests $50 million in CA-based climate investment fund.

Diane Denish used her political connections to MLG to squash a playground proposed for her neighborhood.

CA fast food workers are losing their jobs as $20 minimum wage kicks in.

Despite data to the contrary Santa FE County adopted a plastic bag ban.

RGF attempted to challenge NM’s campaign finance laws passed in 2019. It was recently rejected by a federal judge (we’re appealing).

Former Rep. Williams Stapleton has been indicted on federal charges. 

As media reports have noted, RGF lost a ruling in federal court recently over a 2019 campaign finance law. The Foundation is being represented by the Liberty Justice Center.

The 2019 law requires Rio Grande Foundation to disclosure its donors if it publishes its Freedom Index legislative vote tracking tool within a certain period of time before an election, something the Foundation is not otherwise legally required to do as a 501(c)(3) charitable organization that engages in issue advocacy and does not engage in campaign advocacy for or against candidates or ballot initiatives.

• The Freedom Index which tracks New Mexico state legislators’ floor votes on bills that address issues important to the Foundation.
  
• Rio Grande Foundation challenged this law in federal court as a violation of the First Amendment.
• The Supreme Court has long distinguished between election advocacy and issue advocacy. Although the government may generally require donor disclosure for election advocacy, the Court has generally found that compelled disclosure for issue advocacy is protected by the First Amendment.
• For the law to be constitutional, it has to serve an important governmental interest and be “narrowly tailored” to that interest.
• Rio Grande Foundation argued that the forced disclosure of donors for ads that simply mention a candidate or ballot initiative was not narrowly tailored to the state’s interest in informing voters about who is spending and receiving money to support or oppose a candidate or ballot issue.
• The New Mexico District Court issued a 40-page opinion on March 29, 2024, upholding the law, finding that the forced disclosure requirement was legally sufficient to serve the state’s informational interest.
• The Rio Grande Foundation is now considering filing an appeal to the Tenth Circuit Court of Appeals seeking review of the district court’s opinion.

As the great economist Milton Friedman once said, “If you put the federal government in charge of the Sahara Desert in 5 years there’d be a shortage of sand.” Exhibit A. might be the stretch of I-40 which traverses New Mexico. At 373 miles in length and arguably part of the most important shipping routes in the USA, I-40 is in a state of disrepair. A report from KRQE channel 13 states:

“There’s multiple deficiencies and immediate needs. Pavement is deteriorating rapidly.

There are “miles of crumbling roads, dangerously short on-ramps, and high rates of crashes—a new study suggests those problems and more along I-40 between Arizona and Albuquerque; and there’s no easy fix.”

There are 118 curve deficiencies—or problems with areas where the road curves—multiple bridges in disrepair, and around 70 ramps and merge areas that are too short; something engineers say has made for high-crash areas along the route.

These problems can be deadly as “We get about 18 fatal crashes a year on this corridor and about 17 serious injury crashes” according to Stephanie Miller, deputy project manager with Parametrix, who performed the study for the New Mexico Department of Transportation (NMDOT).

While NM DOT is slowly working to develop a plan to possibly expand the road New Mexico is indeed asking the federal government for $250 million. But if the money is approved it won’t go to road improvements. Instead, according to another KRQE report, “The state is hoping to help establish clean transportation fueling centers along I-40. These centers would have electric charging stations and mobile hydrogen refueling. Three of these sites would be in New Mexico (one near Albuquerque, one near Gallup, and one in Tucumcari).”

The big-picture idea is to “decrease cumulative greenhouse gas emissions by over 1.3 million metric tons of carbon dioxide equivalent through 2050” across five states, according to the environment department.

New Mexico is such a tremendously wealthy state, but as I wrote in National Review recently, that wealth is held by government while the population remains impoverished. A recent story from Albuquerque Business First notes that the State Investment Council is investing $50 million of the State’s Severance Tax Permanent Fund with a “climate-focused fund managed by a venture firm out of California’s Bay Area.” The total amount contained in New Mexico’s various permanent funds exceeds $43 billion and is one of the largest sovereign wealth funds in the world.

There are many issues here. First, while we understand that not ALL of these dollars can be invested with a sound rate of return here in New Mexico, we do often hear that New Mexico is “starved” for venture capital. So, which is it?

Secondly, New Mexico politicians are constantly using money generated by New Mexico’s oil and gas industry for the benefit of “green” pet projects. Now the State Investment Council is getting into the mix with “climate-focused” investments of Severance Tax funds.

Finally, all of this money flowing into New Mexico (this is NOT general fund money, but rather is allocated to other funds under the New Mexico Constitution) is out of sight and difficult for even the most diligent citizen to track. Thus, the SIC has had scandals in the past. Is it really a good and workable idea to empower public officials (working outside the spotlight) to invest such massive amounts of money in ways that aren’t politically driven or corrupt?

If New Mexicans knew just how much money their government is sitting on they might actually demand they benefit in more tangible ways than another government program.

HT Doug Peterson

New Mexico’s Public Education Department (under the direction of Gov. Lujan Grisham) has been aggressively pushing mandates on 5 day school weeks and a transformational change to the State’s accreditation system. Paul talks to former NM legislator and current Logan Schools Superintendent Dennis Roch about these issues which affect all New Mexicans.

The idea of actually wanting to achieve policy goals as opposed to virtue signal. Sadly, the Santa Fe County Commission chose the latter when it banned the use of plastic bags in Santa Fe County despite a similar policy in New Jersey that caused overall plastic usage to triple. The ban also extends to polystyrene containers like Styrofoam in unincorporated areas of the county. The new law carves out a handful of exceptions, such as bags used for newspaper deliveries or to package restaurant takeout with a high liquid content.

Businesses can also choose how to pass the cost of alternatives on to consumers, although the county “encourages” retailers to charge a fee for recycled-content paper bags, which would incentivize consumers to bring their own reusable bags.

Santa Feans both county and city will now be using more plastic than before thanks to these policies.

Especially if you have kids, the story below from KRQE Channel 13 will make your blood boil. It details how a planned playground was killed by one politically-connected individual (former Lt. Gov. Diane Denish) who used her friendship with Gov. Lujan Grisham to kill funding for the park in the recent capital outlay bill.

The episode highlights several issues:

1. Diane Denish is not a nice person. This is not an ideological issue. We disagree w/ retiring Sen. Ortiz y Pino (also featured) on many issues, but he has always been gracious and friendly. Not Denish and not the Gov. and we’re willing to say it publicly.
2. This was part of New Mexico’s capital outlay process which is deeply flawed (as we’ve discussed). The idea that one friend of the Gov. can call and get a project killed highlights the hyper-political nature and lack of vetting and accountability of the capital outlay process.
3. Of course, the kind of power wielded by the Gov. and her close friends is the kind of thing that will continue unless or until New Mexicans decide they are sick of this kind of petty politics.

When is the last time you heard Sen. Martin Heinrich talk about the desperate need for education reform in New Mexico? I certainly haven’t and would encourage to check the Senator’s Twitter feed to see for yourself. Heinrich loves to talk about his pet environmental issues like “electrify everything.” He talks abortion, attacks Republicans, and touts the porkbarrel spending that has run wild in Washington.

Perhaps it is unsurprising that Heinrich doesn’t discuss education because the State is ranked 52nd and his party has controlled the State for decades. That’s why it was so refreshing to see his election opponent Nella Domenici’s work on education reform in New Mexico touted in a recent Albuquerque Journal opinion piece written by her husband.

Along with Domenici’s real-world hands-on experience working for education reform the opinion piece includes support for Mississippi’s educational success (documented in this space) and the support for charter schools provided by Excellent Schools New Mexico. Getting New Mexico’s education system moving in the right direction is primarily a state, not federal responsibility, but it is also an “all hands on deck” situation.

One of many problems with government regulations is that politicians who embrace them often postpone their impact in ways that push the actual costs of those policies into the future. That way people forget about them and move on to more immediate concerns and sometimes the worst issues with the policy don’t even take effect until after the politicians who enacted it no longer occupy that office.

Specifically, the Energy Transition Act of 2019 will do great harms to New Mexicans, but those harms are only starting to be acknowledged. Here’s an article from the Albuquerque Journal.  The entire article is worth a read, but here are a few:

So how can the electricity companies afford to pay for new renewable energy facilities or acquire the clean energy otherwise? A University of New Mexico finance professor thinks the solution will likely be price increases and mergers.

“They have to retire plants that aren’t producing clean energy. They have to build plants that produce clean energy or acquire that electricity from somewhere else,” he said. “All of that costs money.”

He said raising money is more expensive right now, too, because interest rates are higher.

“It is a very, very challenging scenario for utility companies to achieve these targets,” he said.

The investor-owned utilities will likely push harder for price increases in the next decade or more, White said.

A second article also from the Albuquerque Journal notes that so-called “community solar” will have steep costs for rate payers as well. According to the article:

While we disagree with New Mexico Land Commissioner Stephanie Garcia Richard about her effort to coerce the Legislature into raising taxes on the oil and gas industry which already funds most of New Mexico’s government, she is right about something. You see, unlike the Legislature which has seemingly been convinced that the industry is on the verge of a collapse, Garcia Richard apparently believes that oil and gas will continue long into the future.

After all, if the industry were somehow not sustainable, Garcia Richard would be looking for ways to offload oil and gas leases ASAP for whatever she might get, not hold onto them in the hopes of future, higher rates of return.  As the Albuquerque Journal noted recently, “Garcia Richard said it makes sense to her to temporarily forgo a few million dollars in exchange for billions more down the road.”

We have no idea when she expects the Legislature to raise royalties. All 112 members are up for election in November (and we happen to believe that the “progressives” have hit their “high water mark” for the time being. The election will likely determine whether a royalty rate increase will be likely in 2025 or not.

Regardless of what happens, we are pleased that New Mexico’s top elected Democrat with first hand knowledge or the oil and gas industry is so bullish on the industry’s future. Hopefully the 2025 Legislature will be more willing to make needed economic policy changes as well.

We know that oil and gas production in New Mexico and nationwide continues to grow.