While left-wing prognosticators consistently downplay the future of New Mexico’s oil industry and push the narrative that a downturn is looming, the reality is that the State remains firmly in the grip of an oil boom of epic proportions.

As the chart below highlights oil production remains very close to record levels. Production is up approximately 14 times since late 2009.

As noted in the following chart from the Energy Information Administration, Lea and Eddy counties are responsible for 29% of ALL Permian Basin oil production.

The City of Santa Fe is about to embark upon yet another misguided public policy mistake. The latest issue is with the City’s ongoing housing shortage. According to news reports, the plan is to levy a 3% excise tax on sales of million-dollar homes to create a new revenue stream for the city’s Affordable Housing Trust Fund.

As the article describes it, a buyer of a $1.5 million home would pay the tax on $500,000, and the $15,000 collected would go into the Affordable Housing Trust Fund to help cover down payment assistance, rental assistance and housing rehabilitation for city residents.

The problem is the plan won’t actually do anything significant to solve the City’s housing challenges for the simple reason that it doesn’t create any new housing. Rather, by taxing high-end housing and shifting those dollars to the low-end buyers, these new dollars will result in price inflation on those lower cost properties.

If Santa Fe policymakers are serious about making housing more affordable then increased supply (not redistributionist taxes) MUST be the largest part of the equation.

At RGF we ran across the map below from the Economic Innovation Group. The chart shows which states have seen an increase or reduction in the number of children aged 0-4 over the last few years.

Considering the nation’s plummeting birth rate it is no surprise that few states have seen an increase (a few have), but New Mexico is one of the states that have seen the absolute greatest decline (outperforming only other “deep blue” states California, Illinois, New York, and Hawaii).

Shifting America’s overall demographic profile is beyond the scope of the Foundation’s efforts, but with New Mexico performing so poorly in the Kids Count report, it is no surprise that families with small children are not flocking to New Mexico. An interactive version of the map is below with a picture below.

In the past RGF has used the excellent USgovernmentspending.com website to determine how much state and local government spends as a percentage of the State’s GDP (4th most in the US).

Another report, this one from Kaiser Family Foundation, looks at Total State Expenditures per Capita (person) rather than as a percent of GDP. The data are for FY 2021 and we are currently in the FY 2024 budget. Given the rapid rate of spending growth in recent years, New Mexico is likely the biggest-spending state in the nation at this point.

You can see the results below as the table highlights that New Mexico spent more than twice per-person what either Colorado or Texas in FY 2021:

As the map below highlights, only California, Oregon, Hawaii, and Alaska spend more per-person than does New Mexico.

The Rio Grande Foundation, alongside the Washington-based Competitive Enterprise Institute have led a coalition letter (available here) of state-based and national free market organizations and leaders in expressing serious concerns about provisions contained in the “Railway Safety Act,” (S. 576) which is now moving through Congress.

Among the numerous issues with the bill is its arbitrary 2 person crew mandate;

According to the Santa Fe New Mexican, the “City Different” could soon have the highest minimum wage in the United States if Mayor Alan Webber gets his way. The Mayor has plans to raise the minimum wage to $20 an hour from the current $14.03 rate and eventually raise the wage as high as $29 an hour.

That would give Santa Fe the highest minimum wage of any city or state in the nation (Seattle is at $18.69). Going to $20 would also represent a 42.5% increase over the current rate. !function(){“use strict”;window.addEventListener(“message”,(function(e){if(void 0!==e.data[“datawrapper-height”]){var t=document.querySelectorAll(“iframe”);for(var a in e.data[“datawrapper-height”])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}();

ABQ Journal cartoonist John Trever’s cartoon (below) hits the nail on the head (again). RGF president Paul Gessing recently visited Texas and traveled from north to south. He has seen firsthand the booming economy of the Lone Star State.  The Texas economic model isn’t just about not regulating vehicles. They are also a Right to Work state, have a zero income tax, and spends MUCH less money than New Mexico. Also, a much higher percentage of the State’s citizens actually work. 

It’s no surprise that Texas continues to see a massive population influx while New Mexico’s population remains stagnant.

The federal government is “good” at one thing: taking money from producers and handing it to others, almost always with dramatically-less efficient outcomes. This is often done through taxation but nowadays with debt.

Two stories from the ABQ Journal highlight this situation. You can read them here and here:

One story details a mother (presumably single) raising four children in the “International District” of Albuquerque. This is one of the poorest, most crime-ridden areas of Albuquerque. Sen. Martin Heinrich was in town to tout a $10,500 grant for “updated and more powerful and efficient electric system, advanced light bulbs, air sealing, high efficiency shower heads, low-flush toilets and other improvements.”

This is all well and good, but according to the Journal story, “Her children were often spraying water into the swamp cooler to try to cool the home.”Did the feds provide a new swamp cooler or switch her over to refrigerated air? Not according to the article.

One wonders what a single mother of four might prioritize for her own family given $10,500. Instead she gets what Henrich and the Biden Administration want her to have.

It’s much the same with the 2nd story which highlighted the City of Albuquerque receiving $18.2 million for 20 buses at a cost per bus of $910,000 per bus. According to the pro-electrification American Public Power Association, “An average diesel transit bus costs around $500,000, compared with $750,000 for an electric bus.”

Not only did the feds apparently overpay for these buses, but with plummeting ridership, are more buses really a high priority?

Paul and his family took a trip to Texas recently. RGF often cites data highlighting the economic success of Texas. He shares a bit about the trip and Texas’ economic success. Also, Buc’ees are awesome!

NM’s already small share of national GDP shrank between 2012 and 2022. Gov. MLG plans to push ANOTHER EV mandate through the unelected Environmental Improvement Board. Currently the Gov. has imposed a 7% mandate as of 1 year ago by 2025.

The Gov. plans on imposing a 43 percent mandate starting in 2027 with that requirement going to 82% by 2032. The Gov. has also called on the Biden Administration to impose strict regulations on trucks. An RGF op ed on Kids Count ran statewide.

Also, RGF is hosting a statewide conference on education reform through its Opportunities for All Kids project on September 22nd. Sen. Heinrich & White House tout mother of four living in ABQ’s “International District” being given $10,500 for “updated and more powerful and efficient electric system, advanced light bulbs, air sealing, high efficiency shower heads, low-flush toilets and other improvements.”

The City of ABQ also received $18.2 million in federal $$ for 20 buses. That’s $910,000 per bus. According to the American Public Power Association An average diesel transit bus costs around $500,000, compared with $750,000 for an electric bus.

Gov. Lujan Grisham has touted New Mexico’s low unemployment rate and overall job numbers recently, but yet another objective report show that New Mexico job growth continues to lag behind its neighbors’.

If you don’t believe us check out this new report from Pew Center on the States. The report notes that “prime working-age employment rates lag pre-pandemic levels.” While New Mexico is one of 24 states that still lags, of New Mexico’s neighbors (as seen below), New Mexico had the worst employment level and it still hasn’t recovered. See below:

With a drop of 4.1 percent, New Mexico’s decline is worse than EVERY state in the union with the exception of West Virginia which saw a 5.4 percent drop. Amazingly West Virginia STILL slightly outperforms New Mexico when it comes to prime working-age employment rate.

At the Rio Grande Foundation we often contrast New Mexico with our faster-growing neighbors. By any measure Texas is one of the fastest growing states in the nation. Over the Independence Day holiday we saw firsthand that everything really IS bigger in Texas.

For starters our travels took us by plane to Love Field (we are a Southwest family and the airline was started in Texas). After briefly heading north for a concert by Lainey Wilson for one of my daughters we returned to the Dallas area to check out the Texas School Book Depository. We then drove to San Antonio to tour the Alamo and see the Riverwalk before heading to the beach at Port Aransas. Other points of interest included the Dr. Pepper Museum and Mammoth National Monument near Waco.

Having traveled more in Texas than I ever have in my life I can say that the State is booming. That means plenty of road construction like I-35 through Dallas or the massive new bridge going up in Corpus Christi.

Of course, while nobody likes road construction, the roads need to be rebuilt or expanded to accommodate a growing population and growing economy. That means wealth and jobs. The new Tesla plant outside Austin is incredibly large and is just one of the many private sector construction projects being built in the State.

Oh, and Buc’ees is amazing. If you travel through the South where they have one I HIGHLY recommend you check it out. They pay great wages and have a bunch of unique products.

A fascinating new report from Axios recently drilled down into state GDP numbers to find out which state economies are growing relative to their previous share of the national economy and which are shrinking. The time period covered is the decade from 2012 to 2022. You can see the map below.

It is hardly a surprise that GDP is moving south and west because PEOPLE are moving south and west. North Dakota’s tremendous growth in its oil and gas sector over the last decade drove dramatic population growth, but that doesn’t seem to be happening in New Mexico (at least so far) with our shrinking share of the national economic pie.

Just one year after Gov. Lujan Grisham’s first electric vehicle mandate went into effect (7 percent of vehicles sold in New Mexico must be EV’s), the Gov. wants another bite at the regulation “apple.”

RGF had wondered since California adopted it’s own 100% EV mandate (an outright ban on gas vehicles by 2035 adopted last August) whether Gov. Lujan Grisham would follow suit with her own ban. The answer appears to be “not quite,” but the Gov. plans on imposing a 43 percent mandate starting in 2027  with that requirement going to 82% by 2032. So, California but different.

Will the Environmental Improvement Board (EIB) be a rubber stamp for the Gov.’s preferences once again? We assume so. Will the market go along with these aggressive EV plans even with all the subsidies and mandates? Early signs are not great.

At the VERY least New Mexico’s elected legislature should act on this radical plan, not an un-elected body.

Nationally COVID lockdowns saw a significant decline in student outcomes. That decline was even more pronounced in New Mexico where lockdowns were particularly long and broadband is particularly poor.

A recent report, however, shows that Catholic Schools (which already outperform traditional public schools) did not see as much learning loss as did traditional public schools. Post-COVID scores DID decline slightly, but were considered not of statistical significance by NAEP.

The following article appeared in the Las Cruces Sun News and other media outlets on June 30, 2023.

Once again New Mexico is at the very bottom of a list. Kids Count 2023 is compiled by the Annie E. Casey Foundation with distribution and media handled by New Mexico Voices for Children.

While it is not the report Rio Grande Foundation would compile, the 16 variables considered in do highlight issues regarding the well-being of New Mexico children. Sadly, like so many similar reports, the results are not good for our state. What is unique is the positive spin being applied by Voices for Children.

As Voices for Children’s Amber Wallin recently wrote in an opinion piece, “you shouldn’t let the rankings get you down because they don’t tell us how far we’ve come.” We politely disagree and believe that Voices would not have the same sanguine viewpoint if a Republican governor or Legislature were calling the shots.

In 2019 the organization’s then Director James Jimenez said of New Mexico’s 50^th ranking, “It is very much a reflection of what happened, and more specifically, what didn’t happen during the Martinez years.”

We took a careful look through this year’s report and found that of the 16 variables, 9 of them got worse while 6 improved (one stayed the same). That is hardly cause for celebration.

Perhaps even more interesting than the overall results is New Mexico’s poor performance in four “COVID-related” indicators. In our view these include:

• 79 percent of New Mexico fourth graders are not proficient in reading. This number has dropped 4 percent since 2019;
• 87 percent of eight graders are not proficient in math. This number has dropped by 10% since 2019;
• New Mexico’s child and teen death rate per 100K worsened by 16 percent since 2020;
• The percent of youth who are overweight or obese has worsened by 6 percent since 2019-2020.

These four variables (of the 16 in the report) have significant connections to Gov. Lujan Grisham’s COVID lockdown policies that locked our kids out of school for over a year and encouraged New Mexicans to stay inside and isolate themselves from other people.

The good news is that the COVID pandemic is over, as are the Gov.’s restrictions. Sadly, as critics pointed out at the time, the impacts of her policies were clearly going to do more harm than good. Will the kids, especially those from poor families be able to recover? It is hard to say.

What is clear is that after more than four years in office and with the benefit of an unprecedented oil boom, massive spending increases haven’t improved New Mexico’s 50^th-place performance. We recommend going a different direction from the government-driven status quo (a status quo that has dominated New Mexico for nearly a century).

Instead of more government programs we can use the oil and gas surplus to reform our anti-business gross receipts tax and then focus on eliminating the anti-work personal income and corporate taxes. Make New Mexico the jobs and economic growth hub of the Americans Southwest and watch as good paying jobs and economic opportunity improve education, social, and economic outcomes for our children and all New Mexicans.

We are a long way psychologically and politically from breaking out of the big-government paradigm, but it is long overdue. After all, it’s for the children.

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

September 22, 2023
Albuquerque, NM
St. Pius X High School

Even before the pandemic lockdowns, the New Mexico education system underperformed. After years of being ranked at 49th and 50th, our system has slid further into disrepair. New Mexico is now ranked 51st in the nation for education.

New Mexico’s children are more vulnerable than ever to learning loss. It’s time to find alternatives to New Mexico’s faltering education system.

As families continue to be affected by policies and procedures enacted during the pandemic, it’s time to find solutions for our students and families.

The Opportunity for All Kids conference is for policymakers, teachers, administrators, legislators, parents, and concerned citizens invested in creating opportunity. Whether interested in charter schools, private schools, parochial schools, home schools, or microschools, only together can we reform New Mexico’s systems and expand education options.

Our children and families deserve an education system that sets them up for success. Join the Rio Grande Foundation for a full-day education reform conference as we discuss and collaborate on ideas and strategies for a more child-focused future.

Sign up for this exciting and informative event today!

Deadline to obtain ticket 09/16/2023, Midnight, (GMT-05:00) Eastern Time (US & Canada)

200 Tickets available

General Admission

$0 per ticket

 

 

 

 

Some interest groups are lobbying for a public bank in New Mexico. Others want a “green” bank. What’s going on with these proposals? 

Liability in the event of a disaster. The submarine loss raises questions for New Mexico about Spaceport and whether taxpayers could be on the hook in the event of a disaster. This is especially relevant as the first paying customers are set to fly out of Spaceport America this week.

Tuesday the 27th is the 5th anniversary of the Janus decision. New Mexico government employee unions saw the biggest decline in membership of any state thanks in part to RGF educational efforts.

New Mexico has $70.84 billion invested in various funds. It is not a poor state, but it is a poorly governed state:

ABQ City Council embraced casitas and rejected the “weak mayor” change for local government. Paul and Wally are pleased by the casita decision and understand the lack of willingness to switch governments. Also, RGF helped push Albuquerque Public Schools to publish their recent budgets.

Lujan Grisham wants feds to follow California’s lead on zero emission trucks. Here’s what that means.

At the Rio Grande Foundation we constantly are working to provide new and interesting perspectives regarding New Mexico’s economy. Traditionally the State which has a small population and no Fortune 500 businesses located here has not had super-wealthy people at the very top of the income scale.

One would typically expect that someone in oil and gas would be the wealthiest person in New Mexico with the State now the 2nd-largest producer of oil in the nation. But, according to Forbes, the wealthiest New Mexican is Array Technologies founder Ron Corio. He is also New Mexico’s first-ever billionaire.

Of course, solar is heavily-subsidized and becoming more so thanks to Biden Administration policies, so this is sadly fitting.

As per the usual arrangement New Mexico’s left-wing governor wants California to be the standard for what happens in New Mexico. The State Environmental Department under the auspices of the Gov. joined a few other left-wing states and signed a letter to the EPA in which it demands that the agency follow California in embracing standards equivalent to California’s Advanced Clean Trucks standard.

What would that mean? According to the International Council on Clean Transportation, here’s where the “rubber hits the road.” We have yet to see an electric or “zero emissions” tractor trailer on the road in New Mexico, but by next year that would be the requirement if Gov. Lujan Grisham got her way. You can see how the requirement would rise for various types of trucks below.  

A new report from the Mackinac Center, a free market think tank based in Michigan highlights the impact the Supreme Court decision had on membership in New Mexico government employee unions. The Janus decision by the US Supreme Court was handed down on June 27, 2018. It essentially stated that public employees could not be required to join government employee unions. This is the basic idea behind Right to Work laws.

The Rio Grande Foundation partnered with the Mackinac Center post-Janus to educate public employee unions on their rights.

According to data from the Mackinac Center, New Mexico unions saw a massive 61.9% drop in union membership in the wake of the decision. Colorado saw the 2nd-biggest decrease but New Mexico’s was by far the largest decline as can be seen in the following chart.

Clearly, when given the choice, many New Mexico government workers would prefer NOT to be in the union.

If you haven’t heard yet about the tragic deaths of five people in a submarine visiting wreckage of the Titanic this week, you are in the minority. Anytime humans set out on big adventures, there are risks. Space, like oceans are risky.

That’s why in 2021 the New Mexico Legislature placed a $1 million cap on legal liability provided to Virgin Galactic. With Virgin Galactic set to begin paid space tourism flights as soon as Tuesday, June 27, it is worth at least asking whether New Mexico taxpayers (the State) might be on the hook or at least targeted by some enterprising lawyer in the case of a future mishap at the facility.

No one wants tragedies to happen, but the Legislature clearly was thinking of liability when it passed this cap in 2021. We are concerned they may not have protected New Mexicans as effectively as they protected Virgin Galactic.

Last week we posted noting that APS had not posted its two most recent budgets. We are pleased to announce that this has been addressed by the District. You can see a screenshot of the site below. Here is where you can find the APS budgets for FY 2023 and FY 2024:

One of the very best things that happened during the 2023 legislative session was expansion of “529 plans” that can be used to save for education (now they can be used for both college and K-12). This week’s show is an interview with Carolyn Fittipaldi, Marketing Director, and Natalie Cordova, Executive Director of The Education Trust Board of New Mexico.

This is an important tool for New Mexicans to save for all kinds of education options. You should listen AND share this episode with anyone interested in improving and saving for education in New Mexico.

The following appeared in the Las Cruces Sun News and numerous other newspapers on June 18, 2022.

According to New Mexico’s Tax and Revenue Department rebate checks (or transfers to bank accounts) will be going out at any time during the middle of June. At the Rio Grande Foundation we welcome the $500 or $1,000 (depending on single/married filing status). This is especially true at a time when inflation is rising faster than wages.

But New Mexico is in the midst of an unprecedented boom in its oil and gas industry and, while those checks are nice, they are a pittance relative to the windfall being experienced in State government. Worse, unless the Legislature and Gov. take concrete action and soon to diversify the economy, New Mexico will waste this unique opportunity.

First the numbers: according to the Legislature’s analysts, the one-time “cost” of the rebates is $667 million. You may recall that the Legislature began the 2023 session with a surplus of $3.6 billion and spent $1.2 billion of that.

Though new spending was “just” double the amount of the rebates, the reality is that almost all of the money not spent this year will be put into reserves to be spent in the future. That means that more than 80 percent of this year’s budget surplus will ultimately be spent (unless the Legislature enacts some real tax cuts in the 2024 session).

There are a few major points to be made:

• During her reelection campaign Gov. Lujan Grisham decried Mark Ronchetti’s rebate proposal as a “fiscally irresponsible socialist scheme” and said it would eliminate funding for the state budget. What changed?
• It is widely acknowledged that New Mexico needs to diversify its economy, but neither more spending nor one-time rebates will do that. When will Lujan Grisham and Democrats in the Legislature get serious about making New Mexico less dependent on oil and gas?
• While RGF applauds genuine efforts to diversify the economy, oil and gas revenues show no sign of slowing down. That’s because New Mexico is in a production-driven boom, not a price-driven boom. So, rather than allowing a scarcity mentality to drive tax cut and tax reform decisions, policymakers should understand that strong revenues are here for the foreseeable future and should be used to get New Mexico out of its unnecessarily impoverished state.

Like all New Mexicans we at the Rio Grande Foundation welcome these rebates. What we are looking for out of Lujan Grisham and the Legislature is some kind of coherent economic strategy (besides simply spending more money). It is time to translate our oil and gas wealth into prosperity for ALL New Mexicans. That requires average New Mexicans to engage with and hold this Legislature and Gov. accountable for their policy decisions.

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