There are less than two weeks left in New Mexico’s short 30-day legislative session (it ends at noon on Thursday the 15th. A lot can happen over the next few weeks, but here are a few points:

1) Most of the solutions to New Mexico’s problems aren’t being seriously discussed in the Legislature. GRT reform, broad based tax reductions, onerous regulations, serious reforms to New Mexico’s failed education system, and legislation to curtail crime have either not been introduced or have already been killed.

A few minor tax reforms (and some unnecessary tax hikes) have been introduced. We await the tax package. Overall, this Gov. and Legislature are incapable of big-picture, positive economic reforms.

2) To date the most notable issues this session have been paid family leave (HB 6 and SB3) and guns. There WILL be a tax omnibus bill (HB 547 was last year’s and it was largely vetoed). That tax bill (and whether it has pro-growth tax cuts or anti-growth hikes OR mostly subsidies) will have a major impact on the overall success or failure of this session as a whole.  The Clean Fuel Standard (HB 41) and some other oil and gas bills like HB 133 could also negatively impact New Mexicans and the economy.

3) The saddest and most notable part of the session seems to be the abject lack of vision. Considering that the Democrats have held power in New Mexico for nearly a century, they seem to prefer the status quo. No major economic, education, or crime reforms means their lock on power continues (with more money available thanks to oil and gas).

On this week’s episode Paul talks to former legislator and gubernatorial candidate Rebecca Dow. Dow is now heading up the Opportunity for All Kids project for the Rio Grande Foundation. She works every day to bring education reform and school choice to New Mexico. Paul and Rebecca discuss School Choice Week, education in the 2024 session, and goals for the OAK project.

Gov. Lujan Grisham was recently crowing about the $3.5 billion investment in Rio Rancho’s Intel facility. This is a big deal for New Mexico which has no Fortune 500 companies headquartered in the state and has struggled for decades to attract private sector business outside of the oil and gas industry.

The Intel plant has been around since 1980 and after it was widely feared about 7 years ago that Intel was planning to leave Rio Rancho entirely, the latest investment in the plant is most welcome.  But it is worth noting that Intel is currently investing $20 billion in Arizona. That’s almost 6 times their investment in NM.

Arizona (while similar in many ways, but lacking NM’s oil and gas) has long had a more business-friendly political culture than has New Mexico which has led to AZ growing much faster.  We’re happy to have any private sector investment in New Mexico, but the gap between us and Arizona remains vast.

RGF president Paul Gessing recently traveled to Ruidoso, NM to participate in the Grassroots Conservative Conference put on by “One Name, One Banner” and Ben Luna.

Paul appeared on a panel with a few ranchers who are dealing with the federal government, but appearing alongside James Lindsay (self-described professional troublemaker) was a special treat.  Paul discusses regulations (and taxes) at the State level and in the Legislature.  The video below provides highlights from the presentations lasting just over 7 minutes.

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The following is the full-length conference video. You can find Gessing’s full regulation comments at 2:45 and a panel discussion on electric vehicle mandates with Johnny Johnson of the New Mexico Trucking Association which starts at the 3:25 mark and lasts for about 50 minutes.

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From federal lands to national monuments and even city parks and open space, government is often seen as an ideal protector of lands and the environment. So often left-wing environmentalists (there are free market environmentalists like the author) believe that giving the government more control and power will result in better outcomes than market forces.

One example (of many) of government failure involves the Poole Estate on the West Side of Albuquerque. As the sign below (marked by extensive graffiti) notes, nearly three years ago the City purchased the Poole Estate on the West Side, just East of Coors.

Sadly, nothing has really been done with the place. So, while it sits, graffiti “artists” get to work. The photos below are a tiny portion of the graffiti that has taken over the walls that once outlined the Poole property.

The City could remove all the graffiti tomorrow (a start), but why after three long years has nothing been done with the property?

From federal lands to national monuments and even city parks and open space, government is often seen as an ideal protector of lands and the environment. So often left-wing environmentalists (there are free market environmentalists like the author) believe that giving the government more control and power will result in better outcomes than market forces.

One example (of many) of government failure involves the Poole Estate on the West Side of Albuquerque. As the sign below (marked by extensive graffiti) notes, nearly three years ago the City purchased the Poole Estate on the West Side, just East of Coors.

Sadly, nothing has really been done with the place. So, while it sits, graffiti “artists” get to work. The photos below are a tiny portion of the graffiti that has taken over the walls that once outlined the Poole property.

The City could remove all the graffiti tomorrow (a start), but why after three long years has nothing been done with the property?

There are plenty of crazy policies discussed in Santa Fe every session. Sadly, many of them become the laws that keep New Mexico mired in last place.  One of the “craziest” bills is HB 179 which, if adopted, would MASSIVELY increase taxes on alcohol.

We have previously discussed the fact that New Mexico’s taxes on alcohol are NOT low. In fact, our tax on wine is already 5th-highest in the nation!  The following is a chart from the fiscal impact report on HB 179. It illustrates just how aggressively supporters of HB 179 are pushing to raise taxes.

According to information provided by the Committee to Unleash Prosperity, there are 14 states reducing personal income tax rates in 2024. You can see a map of those states below:

Sadly, even with massive budget surpluses New Mexico is NOT among the states working to improve its tax structure and thus its economic competitiveness. HB 252 is the best opportunity for personal  income tax reductions in New Mexico this session.

New Mexico’s elected officials are allowing the State to continue to fall behind more aggressive states.

According to information provided by the Committee to Unleash Prosperity, there are 14 states reducing personal income tax rates in 2024. You can see a map of those states below:

Sadly, even with massive budget surpluses New Mexico is NOT among the states working to improve its tax structure and thus its economic competitiveness. HB 252 is the best opportunity for personal  income tax reductions in New Mexico this session.

New Mexico’s elected officials are allowing the State to continue to fall behind more aggressive states.

Paul was recently in Ruidoso to talk about government regulations and EV mandates at a Conservative Conference. Other speakers include James Lindsay and Sheriff Richard Clarke. Ben Luna organized the event.

RGF has continued its work in Santa Fe, mostly pushing back against bad bills. Here are a few:

HB 41: Clean Fuel Standard (soon to be on house floor)

HB 133 opens up the New Mexico Oil and Gas Act which has governed the industry for decades and enacts language pushed by environmental groups that will have the effect of increasing regulations to the point where small operators can’t do business in New Mexico.

HB 48 would dramatically increase “royalties” (taxes) on the oil and gas industry which already generates huge amounts for New Mexico.

HB 140: EV subsidies.

Related to what is going on at the Texas Border:

U.S. President Joe Biden on Friday paused approvals for pending and future applications to export liquefied natural gas (LNG)from new projects

Biden vetoes bipartisan bill on “Buy American Provisions” relating to EV’s.

New tires every 7,000 miles? Electric cars save gas but tire wear shocks some Florida drivers

MLG seeks federal funding to assist in the border crisis. Why?

New Jersey plastic bag ban actually causes tripling of plastic usage.

This bill is up in House Tax on Wednesday.

Handicapping the likelihood of tax bills in the New Mexico Legislature is really hard because they are compiled behind closed doors. Last year the Legislature was rather ambitious and wound up with a disastrous bill that even Gov. Lujan Grisham didn’t like. 

The Legislature seems to be far less ambitious this year and with only 30 days to pass something, that’s no surprise. House Bill 252 would be a bill worth including as it provides tax relief (targeted at lower income levels) for income tax payers in New Mexico.  It is sponsored by Rep. Lente, a Democrat and chair of the House Tax Committee.  You can read the analysis here. 

The rates would be: 1.5%, 3.2%, 4.3%, 4.7%, 4.9%, and 5.9%. The tax reduction would start out around $150 million and would rise somewhat over time. While this is by no means the tax reform/reduction we’d design, it is worthy of support and worth consideration by the Legislature.

Perhaps they would consider adding a provision to index these tax rates to inflation?

Even if you have previously taken action on this issue, we need you to do it again! As the bill heads into a new committee, we need your participation to defeat the anti-business HB 6 Paid Family Leave Bill, TOMORROW at 1:30 PM, in the House Commerce & Economic Development Committee.

HB 6 is a disaster. If passed, this Bill will take $5 from every $1000 of hardworking employees and an additional $4 per $1000 from employers. This Bill is intended to create a super fund managed by Workforce Solutions to allow employees 12 weeks of paid leave.

We need you to get involved!

First – Send your legislator & the committee a message telling them that HB 6 is bad for employees & businesses.

Next – Make plans to attend the online meeting at 1:30 PM TOMORROW (1/31) with the button below. You can also attend in person in Santa Fe at the Roundhouse to make comments supporting the industry. (House Commerce & Economic Development Committee is in Room 317)

Together we can make a difference, but we must be present to win!

Message the Legislature

Attend Meeting @ 1:30 PM – TOMORROW (1/31)

Last week President Biden seemingly inexplicably decided to put a stop to approvals of American liquefied natural gas (LNG) exports.  Is it to get back at Texas for the border dispute or is it another sop to the radical environmentalists (even though LNG exports are a win for the environment)? We may never know.

LNG is a classic win, win, win for the US and New Mexico.

It provides a market for our natural gas (NM is a top-10 producing state). This means jobs and revenues.

Natural gas is clean and often replaces coal. 

Our natural gas helps foreign allies that otherwise might have to rely on Russia. 

House Bill 140 is Gov. Lujan Grisham’s plan to further subsidize the deployment of electric vehicles. It does so by creating two new refundable (meaning they are often not tax reductions, but spending) personal and corporate income tax credits for a six-year period beginning in tax year 2024 through tax year 2029.

First, the bill creates the refundable electric vehicle income tax credit for each electric vehicle (EV) purchase and second, it creates an electric vehicle charging unit income tax credit to cover the cost of purchasing and
installing an electric vehicle charging unit. The credit amounts for each year is as follows.

What is surprising (to us) is how modest the vehicle subsidy is ($3,000 starting out for three years) and declining over time through 2029. On the other hand the subsidy for a charging station is up to $25,000 per unit. The cost to taxpayers per year is estimated to be approximately $40 million annually.

While we see this subsidy as completely unnecessary, with New Mexico having another massive $3.5 billion surplus thanks to oil and gas, there is plenty of money available for broader tax reductions. 

These subsidies primarily benefit the wealthy. According to a study published in the Energy Research Social Science Journal, the majority of EV owners are white, own a home, have multiple vehicles, and have a higher income compared to the general population. About 60% of EV owners have an annual income of more than $100,000, while only 20% have an annual income of less than $50,000.

On this week’s interview Paul discusses the New Mexico Insurance Commissioner’s efforts to kill Christian Health Sharing plans in New Mexico. Katy Talento is a health care expert and Executive Director of the Alliance of Health Care Sharing Ministries.

We discuss how the plans work and why they became so popular in the wake of ObamaCare. We also discuss why the Insurance Commissioner would come after these plans. Paul and his family once were part of one prominent health sharing plan. He describes his experience.

There is no doubt that our nation is facing a border crisis that the Biden Administration seems unable or unwilling to address. Like all Americans we have seen and heard of issues facing Texas and California at the border. We’ve also seen issues in big cities like Chicago, Boston, New York, and some others.

While we know there are illegal crossings of the New Mexico border, in Albuquerque and Santa Fe we aren’t seeing large numbers of issues dealing with immigrants or the need to house them. It is also not being reported in the media. Are we wrong? Why is Gov. Lujan Grisham among a rather small group of governors looking for money from Washington for this? See the tweet and letter signed by the Gov. below.

Without action from Washington, our economy, states, & communities will continue to bear the brunt of the shortcomings of the existing immigration system.

I am leading a coalition of governors calling for federal support as we manage an unprecedented humanitarian crisis. pic.twitter.com/f5gdENKBLt

— Governor Kathy Hochul (@GovKathyHochul) January 23, 2024

Two of the very worst bills before the New Mexico Legislature this session begin moving through their committees starting this Wednesday morning.

HB 37 is up in the House Tax Committee (find a list of members and emails here).

If adopted it would dramatically limit New Mexicans’ ability to deduct capital gains from the sale of homes, businesses, and stock. Under the current system, New Mexico taxpayers with capital gains income are able to deduct 40 percent of their net gain from their New Mexico taxable income. This is a positive feature of the state’s tax code as it promotes the creation of capital, which has been in short supply in the Land of Enchantment. HB 37 would limit a taxpayer’s net capital gains deduction to $2,500.

Businesses get into business to make money. New Mexico desperately needs a broader array of businesses to become economically-successful. There is absolutely no reason to adopt a tax hike of this kind, especially when New Mexico has such a massive surplus. 

Relevant committee emails below:

derrick.lente@nmlegis.gov,
Jason Harper <JasonHarperNM@gmail.com>,
Cynthia.Borrego@nmlegis.gov,
ambrose.castellano@nmlegis.gov,
Mark.Duncan@nmlegis.gov,
doreen.gallegos@nmlegis.gov,
joshua.hernandez@nmlegis.gov,
Larry Scott <lrscott52@gmail.com>,
Jim Townsend <jamesgtownsend@gmail.com>,
kristina.ortez@nmlegis.gov,
linda.serrato@nmlegis.gov

HB 6 is the other awful bill. This “paid leave”  bill (up in House Health and Human Services tomorrow members listed at link) would foist tax hikes on employees and employers alike (weather they want the program or not) to fund a paid leave scheme administered by the Department of Workforce Solutions.

Although no FIR is yet available for the bill this year, the analysis of last year’s version SB 11, expressed serious concerns about the viability of the fund. Such shortfalls would result in inevitable tax hikes on both workers and employers.

Relevant committee emails below:

Today and for the last few weeks filming has been taking place on the streets of downtown Albuquerque (blocking off several including Gold). Of course, we know this is Gov. MLG’s very favorite industry.

Those trucks are most definitely NOT electric though and there is also a generator at bottom middle (MLG is forcing EV’s on the rest of us over the span of a few short years). The film also involved driving a bunch of 1970’s era gas-guzzling vehicles down the road. You can see a photo of some of the cars below. Of course, we the taxpayers are footing the bill for all of this.

Over the weekend in the Albuquerque Journal ran this piece by a national, left-wing advocate for “progressive” taxation. He lauds New Mexico for making its tax code more “progressive” even though he appears to not know what the terms “progressive” and “regressive” mean when it comes to taxes.

According to none other than the IRS, a ” regressive tax—A tax that takes a larger percentage of income from low-income groups than from high-income groups.” A sales tax (or GRT) would be “regressive” because it taxes everyone at the same rate.

The “progressive” author misguidedly states that “regressive,” means the more you make, the less you pay. There are few taxes like that and certainly no tax structures where you pay less overall tax if you make more money.

So, how do New Mexico’s “progressive” tax changes impact job creation or overall economic health or the attractiveness of our state to economic relocation? Could New Mexico (blessed with massive oil and gas surpluses) make its tax structure less “regressive” by reforming and reducing its gross receipts tax? What is the appropriate level of taxation? These questions are left unanswered.

The author DOES trash Arizona for having made their tax structure more regressive in recent years (by cutting taxes, of course). New Mexico seems to be moving toward a California-style tax structure (according to the author’s own study, California has THE most progressive tax code) which has also made the state an attractive place to move out of.  

On this week’s interview Paul talks to Zach Fort of the New Mexico Shooting Sports Association about Gov. Lujan Grisham’s plans to take away your guns during the 2024 legislative session. We know from this summer’s radical and anti-constitutional executive order that this Gov. is not a believer in gun rights or the 2nd Amendment. What are her and the Legislature’s plans and what can New Mexicans do to fight back?

Sometimes people surprise you. This is one such case. Recently, the Rio Grande Foundation was asked by our friends at Americans for Tax Reform to obtain a proclamation celebrating Ronald Reagan Day (Feb. 6, 2024) which would have been Reagan’s 113th birthday. We weren’t sure what we’d get from Gov. Lujan Grisham’s office, but were positively shocked to receive the proclamation below.

Not only is the proclamation well-done, but it specifically calls out Reagan’s political and economic success thanks to his conservative principles. It stands in stark contrast to the policies emanating from Washington and Santa Fe (to name just two).

Gov. Lujan Grisham is seemingly hell-bent on stopping school districts in New Mexico from operating on a four day week. She specifically called out these districts in her State of the State address as well and has put $100 million in her budget to ensure ALL New Mexico districts embrace a 5 day week. 

Just to be crystal clear, 4 day weeks don’t mean less time in school. New Mexico students have to be in their classrooms for a set amount of time.

Check out the quotes from this article from Missouri (where 4 day weeks are common and popular):

“I wish this was a story about how a rural school district is able to pay teachers $100,000 a year, and we’re paying them what they’re worth and that sort of thing, but we just don’t have that revenue,” he said.

Since they don’t have the money, Klinginsmith said their bargaining chip for keeping employees is time.

“We want to retain our best teachers and attract the best teachers and so the four-day school weeks has definitely helped us do that,” he said.

The district is currently in their fifth year using this method.

According to Klinginsmith, they have seen teacher retention immensely improve, but they’re not the only ones it’s benefitting.

Despite public opposition including 750 signatures from verified New Mexicans opposed to the Gov.’s latest proposal to foist EV charging stations on commercial and residential buildings, the Construction Industries Commission decided today to adopt the Gov.’s mandate. Mandating EV chargers and equipping them for future EV chargers will raise costs on new commercial and residential buildings.

The vote was 6-2. You can find the list of members here though we know that Dale Armstrong was one of the opponents, we don’t have the exact vote.

Here is a useful if highly biased take from an environmental group that supported the new codes.