As mentioned recently, New Mexico policymakers will again have a stunningly large budget surplus when they convene in January, but revenues are not the only thing rising. Inflation is as well, especially in the construction industry Daniel Chacon writes in the Santa Fe New Mexican.

In addition to Chacon’s article, RGF’s Paul Gessing recently sat down with Carla Kugler to discuss the current state of New Mexico’s construction industry.

We definitely agree with analyst Cally Carswell on the following:

• Prioritize or restrict 2024 capital appropriations to complete existing projects.
• Prioritize emergency or critical infrastructure projects.

We’d add a few more:

• End Davis-Bacon work requirements and ban Project Labor Agreements (on the books in ABQ and Bernalillo County, both of which raise costs and restrict labor supply on construction jobs.
• Make a specific, long-term plan to increase New Mexico’s low workforce participation rate with a special emphasis of increasing participation in the construction industry.
• Finally, while it isn’t a state policy issue per se, it is worth noting that the Biden Administration’s massive debt-laden spending bills including the so-called “Inflation Reduction Act” are further increasing construction costs.

On this week’s interview Paul sits down with Carla Kugler. Carla is President & CEO at Associated Builders and Contractors New Mexico Chapter. She represents the non-union construction industry in New Mexico. Carla recently won “Executive of the Year” from the New Mexico Society of Association Executives.

In addition to that Paul and Carla discuss New Mexico’s construction industry and their constant struggle to find good workers and what they are doing about it as an industry. Carla also addresses the latest on projects in Bernalillo County/ABQ that by law give unions favorable treatment when it comes to government-funded construction. projects.

A recent news story that ran AFTER our conversation relating to the construction industry and rising costs can be found here. 

The City of Albuquerque’s police department monitor James Ginger has been paid over $11 million. While the overall merits of what DoJ is doing with the City’s police department is up for debate, the City’s payments to Ginger have remained high even as the City increasingly complies with DoJ’s mandates.

RGF’s Paul Gessing had a chance to weigh in on Ginger’s ongoing payments in a recent story KOAT did on the topic. Find the story at link or click on the screen shot below.

On the heels of a massive $3.6 billion surplus which was available to the Legislature and Gov. Lujan Grisham in advance of the 2023 session, analysts are now predicting another banner budget year for New Mexico. The current surplus is estimated at $3.5 billion.

Of course, this number is all the more impressive because New Mexico government has grown rapidly in recent years (meaning more money is needed to fulfill the baseline). In addition to growing general fund spending, the State has also plowed money into various permanent funds and endowments (deferred spending).

There have been minor GRT rate reductions (in 2022) and elimination of GRT on medical deductibles and co-pays, but the Legislature also seriously considered tax hikes in the last session. Nothing fundamental has been done to improve or diversify New Mexico’s economy for the long-term.

Can this Legislature and Gov. enact needed tax reductions and reforms? We remain in a Show-me state of mind, but will keep pushing and fighting. By all accounts the Legislature will again have record revenues when it convenes in January thanks to the production-driven oil boom in New Mexico.

Joe Biden has “Bidenomics: the taking on of debt, rising inflation, and impoverishment of average citizens to support preferred industries and special interests (see the Inflation Reduction Act).

Gov. Lujan Grisham has her own version of Bidenomics which we’re calling “MLG-nomics.” While the Albuquerque Journal has a fawning article detailing all of the numerous “green” projects going on around New Mexico, the reality is that MLG’s entire economic strategy appears to be to use massive revenues created by the booming oil and gas industry to pump up her preferred “green” projects and Hollywood.

The good. news is MLG’s plans are not as reliant on debt as Biden’s, but the bad news is that New Mexico remains among the poorest states in America with a failing education system, high crime, and numerous other challenges that COULD be addressed with the money flowing into the State. Instead, MLG’s friends in her preferred industries will make out very well at the expense of both federal and state taxpayers and the economic future of New Mexico.

UPDATE: We are pleased to report that City Council rejected the proposed cap.

Albuquerque’s City Council is considering (possibly tonight) a number of new regulations on so-called short-term rentals. The proposed number is 1,200 citywide which is purely arbitrary and could easily prove to be inadequate now or at some time in the future (thus requiring a new law). Also, if you are going to cap short-term rentals, why not cap the number of hotel rooms?

The existing permitting regime (if strictly enforced) and arbitrary cap could have especially harmful impacts during Balloon Fiesta when, according to the Albuquerque Journal, “the number of available rentals shot up by about 600 units between August and October to 2,310 units.”

That increased supply is directly correlated with the reality that hotel rooms become expensive as people flock to the City for it’s biggest event of the year.

Furthermore, the proposed “cap” is not a real cap because it doesn’t include single rooms. We’re not advocating the cap be made more strict, but simply note that enacting the cap will result in a shift toward single rooms and any other exemptions that can be found.

On this week’s conversation Paul and Wally discuss. a recent opinion piece highlighting the fact that the environmental left doesn’t care about “democracy” or even addressing CO2 emissions.

President Biden was in Albuquerque recently touting “Bidenomics.” In reality his economic policies have been a complete failure.

Speaking of that, a new rule from the Biden Administration will increase the price of roads and other public works projects. During that same trip he also placed some of the best uranium available in the US off limits to development.

A new study claims NewMexico is the very worst state to live in. Are they right? Paul and Wally often criticize the New Mexico government, but they have a lot to say about this report.

Finally, while the Gov. is pushing to force New Mexicans to buy electric cars, she is having the state buy a plane (partially for her use). 

Brian Domitrovic is an intellectual historian interested in the history and development of supply-side economics. He is the author of the book “Taxes Have Consequences: An Income Tax History of the United States” which was published in 2022 and he co-authored with Arthur B. Laffer and Jeanne Sinquefield. Brian spoke at a recent Rio Grande Foundation luncheon so we sat down to discuss tax history, Art Laffer, and more.

Due to a power outage this show was recorded in two parts.

New Mexico should be in crisis mode. It’s K-12 education system is in crisis. Problems abound: recent reports highlight serious school attendance issues, the NAEP test places New Mexico 52nd across ALL age groups and subjects studied, the Kids Count report shows New Mexico kids are losing ground, and no one seems to have a solution. Education spending has increased markedly in recent years, but with nothing to show for it.

At the Rio Grande Foundation (and our education project “Opportunities for All Kids New Mexico” we believe New Mexico’s education challenges are an existential threat to both our children and our economic prospects. No solution should be off the table. So, we are hosting a free, day-long education conference in which experts from all across the nation and State discuss potential solutions which include: private choice, charter schools, improvements to the existing system (like Mississippi), micro-schools, 529 plans, and more.    

The conference will get started at 9am and last until about 4. If you are interested in attending or finding out more, click below:

RGF president Paul Gessing recently sat down with KOAT TV Channel 7 to discuss Bernalillo County Assessor Damian Lara’s interesting approach to property tax assessments. The issue was discussed in more detail in a blog post here. 

In addition to Gessing and Lara, the KOAT piece includes Doug Peterson, one of the largest landlords in New Mexico. While everyone wants to see properties maintained and filled with thriving businesses, those seem to be policy and enforcement considerations for the Mayor, City Council, and APD.

If you don’t like the way things work in the City of Albuquerque, don’t blame Mayor Keller or City Council (at least that’s what the Mayor himself says), blame the AFSCME government employee union.

This is an enlightening KUNM story in which Mayor Tim Keller touts the benefits of working for the City and highlights the need for more city workers. It is a fairly trivial article until the following:

Critics from the Rio Grande Foundation and dating back to President Franklin Roosevelt have expressed concern about the mere principal of allowing government employees to unionize. Keller appears to be taking the issue to another level by stating that Albuquerque is “an AFSCME run city.”

Setting aside whether AFSCME is doing a good job, allowing a private organization (formed for the benefit of its dues paying members) is not a healthy thing for governance or democracy.

The recently announced plan by a solar cell manufacturing company to spend $1 billion on a new manufacturing facility in Albuquerque is a big deal for the City and State of New Mexico.

This is obviously the exact type of project both Gov. Lujan Grisham and President Biden wish to see. Ironically, the facility was announced just days after Biden was in town to celebrate a wind turbine manufacturer that received subsidies under his Inflation Reduction Act.

Of course New Mexico is one of many states that ALSO mandates solar or at least “renewables.” New Mexico is one of 10 that plan to phase out fossil fuels entirely and a total of 30 have “renewable” mandates.

But wait, there’s more! With New Mexico’s recent deal to bring a solar manufacturing facility to town there will be up to $600 million in additional “economic development” subsidies. We don’t know the exact makeup of the subsidy scheme, but it is going to be big.

Aside from the subsidies themselves, this layering of subsidies hides the overall cost of the subsidies and makes it exceedingly difficult to determine the real cost of various subsidies. The chart below does that for 2016 although it is notable that wind and solar provide a tiny fraction of American electricity overall (see second pie chart below).

At the Rio Grande Foundation we are definitely not shy about stating that New Mexico is among the very worst governed states in the nation. Other studies have highlighted this situation.

And the latest Wallethub report which finds New Mexico to be the very worst state in the nation to live in DOES include typically poor ratings on both education and public safety.

But worse place to live? Really? Our first giveaway that there might be issues in the report was the top states to live which included Massachusetts, New Jersey, and New York. While they ARE growing faster than New Mexico, people are by no means flocking to them (like they are to Texas, Utah, and Nevada which are all lower ranked).

Then we did a deeper dive into the variables including quality of life and economy and found some questionable inputs in those variables . Overall, the report has some  useful information, but the report doesn’t necessarily reflect New Mexicans’ overall quality of life relative to other states.

The title of this post may sound hyperbolic, but it isn’t. Check out the recent opinion piece (published during President Biden’s visit to New Mexico) by Gail Evans, an attorney with the Center for Biological Diversity is based in New Mexico and works as an attorney for the group.

Evans makes numerous bold statements including urging the “U.S. and other developed countries to end all oil and gas production by 2031.” (Developed does not include China or India).

Furthermore, Evans argues, “Biden must immediately phase out the extraction of fossil fuels in New Mexico and on public lands and waters throughout the country.”

Finally, claims Evans, “He can declare a national climate emergency to speed the end of the fossil fuel era by using his ordinary executive powers and emergency executive powers. He has the authority to phase out the production of oil, gas and coal on our public lands and waters.”

Some of this is conjecture or based on an expansive reading of the law (to say he least), but where is Congress in all of this? Are we really going to allow one person to shut down an entire industry?

Finally, if you exempt China and India  which are NOT considered developed countries, are you REALLY serious about addressing climate change or are you just trying to destroy the American economy?

“Green” President Biden recently flew in to New Mexico on the gas guzzling, CO2 emitting Air Force 1 causing chaos on the local roads due to his (also gas guzzling) motorcade.

But, Biden was REALLY in New Mexico to tout a wind turbine production facility in Belen that received subsidies via the “Inflation Reduction Act.” 

Touting the benefits of subsidized, mandated, and ultimately ineffective wind turbines which truly are an excellent of “Bidenomics,” the reality is that Biden’s policies have been a failure. As the House Budget Committee points out:

• Real wages are down over 5 percent since President Biden entered the Oval Office.
• Since President Biden took office, the average worker has lost over $4,900 in real wages.
• While inflation rates have come down prices are up 15.5 percent under Biden.

Property tax assessment is a an oft-overlooked elected position that can have big impacts on the affordability of both commercial and residential real estate. A recent KRQE story did a bare bones job highlighting the fact that changes to real estate valuations could be coming, but Downtown Action News is the source for much of what is contained in this post.  Unfortunately this article is not available online currently. Here are a few details.

Assessor Lara seems to think that increasing property taxes by assessing unused properties and parking lots in the downtown core will encourage owners to sell them or use them.

As quoted in DAN, “Particularly for the ones (properties) Downtown, it’s mostly corporations, investors, or something like that,” Lara said. The attitude is “I don’t have to do anything but wait and since I’m not paying anything on property taxes – because the property is not worth very much – I can just wait until it is and sell it.”

One line in particular grabbed our attention in the article, Lara said, non-residential property valuations have gone up by 4.5 percent overall over the last decade. During that same time period, residential has gone up by a whopping 42 percent, despite the fact that it is usually subject to a 3 percent annual cap.

We have thoughts:

1. Businesses can’t believe they are getting a good “bang” for their property tax buck given the ongoing public safety issues. It would seem that solving those safety issues might also result in those commercial properties being worth more (and thus paying higher taxes).
2. Raising property tax assessments on commercial real estate COULD fail resulting in even more vacancies. On the other hand, if this idea does work and revenues do rise, it would seem that the County should reduce residential taxes which continue to skyrocket.
3. The BEST way to make Albuquerque commercial real estate more valuable would be for the Legislature and Gov. to reform our broken tax code, address crime, and generally make New Mexico (and by extension downtown Albuquerque) a welcoming place for business and economic activity. Until that happens this is all just rearranging deck chairs.

Should the federal government have the ability to lean on social media companies to censor what is said by everyday Americans on the most important issues? That’s going to be addressed in the months ahead, possibly by the US Supreme Court in: Missouri v. Biden. 

Recently, a federal judge likened the government’s use of social media censorship to the “United States Government (having)
assumed a role similar to an Orwellian “Ministry of Truth.’” Sadly, as per the post below, New Mexico’s (relatively) new AG has decided that: “yes indeed, the federal government should be in the business of censorship.” That message has been conveyed through a “friend of the court” or amicus brief which you can see below.

While fighting crime is rightfully the most important role of NM’s AG, the office has broad power to lend support or opposition to various legal issues. Sadly, NM’s Torrez is apparently not a fan of the 1st Amendment:  

🚨Missouri v. Biden: Interesting update. Amicus brief filed by democrat led states and the District of Columbia in support of government censorship. I say it’s interesting, because the government is arguing that states don’t have standing, and in come the left to support them. pic.twitter.com/rKfzaJpVzL

— Tracy Beanz (@tracybeanz) August 4, 2023

On this week’s interview Paul talks to Dr. Deane Waldman. Deane is a retired pediatric cardiologist from UNM Hospital and lived for decades in Albuquerque. He now lives in Texas so Paul and Deane compare and contrast the two.

Then, Deane, who writes extensively on issues in American health care, talks broadly about the impact of the Pandemic on American health care, how Americans’ rights were abused by the government, and what can be done about it. They also discuss the broader medical provider shortage. Finally, Paul asks Deane if any of the declared presidential candidates in either party “get it” when it comes to health care.

During the 2023 legislative session, the ONLY significant permanent tax reform signed by Gov. Lujan Grisham involved the elimination of taxes on certain payments to medical professionals.

The elimination of this tax was a long-time priority of RGF and we are glad to see it eliminated. Previously during the Richardson Administration the GRT on health insurance payments to medical providers was eliminated.

Clearly, policymakers understand that taxing services is economically-harmful. But what about the impact of taxing services on the rest of the economy? During the last legislative session Gov. Lujan Grisham and at least some legislators supported reform. Unfortunately, the bill died due to concerns over lost revenue on the part of local governments.

When grocery taxes were ended during the Richardson Administration “hold harmless” payments were made to local governments to fill the gap.  Unfortunately the process of “unwinding” these payments was very messy resulting in some local governments (like Albuquerque) dramatically increasing revenues an others losing out.

• • The State has plenty of revenue right now to reform the GRT;
  • The GRT (especially service taxation/pyramiding) is New Mexico’s “original sin” of economic policy;
  • Eliminating the grocery tax while a “done deal” was a bad policy move for a number of reasons including the increasing of GRT rates by 0.5% and the “hold harmless” debacle;
  • Reforming the GRT should be a much higher priority, it can be done at a much lower “cost” and potentially with a better approach than was undertaken in the past.

There is a comprehensive new report out from Wallethub and, especially considering the prominent role the State of New Mexico’s medical provider shortage played in the 2023 session, we felt it was an important report to analyze.

For starters, having worked extensively on the issue with our own research here and here we found the report to be well-done and thorough. Several issues were discussed and successfully addressed in the 2023 session. Clearly we are not the only state in need of more medical providers.

Aside from our mediocre 34th ranking overall, New Mexico does pretty well on “Dentists Per Capita” and cancer rate.

But, New Mexico does poorly in terms of the percentage of at-risk adults having no routine doctor visits.

Paul had an opinion piece about his recent trip to Texas and observations. It ran in Sunday’s ABQ Journal. Not surprisingly, the article drew heated responses from those who despise Texas and others who appreciated the perspective.

The left wing “Searchlight” New Mexico did a story which was obviously an attempt to make MLG seem like a “moderate” on the environment.

Paul sat down w/ KOAT to discuss the Mayor’s proposed bike trail. In a separate story he also discussed the latest plans for a United Soccer Stadium.

New Mexico subsidizes film industry fat cats. 

Yet another report slams New Mexico’s education system. MLG applauds more spending. 

We have a luncheon on August 8. 

RGF is hosting an education event on September 22nd.

At the Rio Grande Foundation our position on education unions is nuanced. We generally oppose public sector unions, but blame the government-run monopoly for our educational woes. After reading this memo from the Albuquerque Teachers Federation, we may reconsider that position.

In the document which is written in response to a memo from the District (APS), the union attempts to thwart efforts to engage and inform parents in the educational process as relates to their children.

• It starts off with a “bang” with the following statement by the union: “The memo indicates that parent communication must include “Access to the district’s standardized electronic grade book via ParentVue.”

ParentVue is clearly defined as one option for communicating with parents.

• Another gem from the AFT follows: The memo states that “If students are in danger of failing, or not making adequate academic progress, teachers will proactively notify parents in time for early and appropriate intervention.” For high school teachers, this rule is a violation Article 5.L.4 of the APS-ATF Negotiated Agreement, which reads: “If a high school teacher anticipates that any student is failing at the end of the semester, they will be required to provide a list of all students who are at risk of failing a class one week prior to winter break so that the student(s) may be scheduled appropriately. The list is nonbinding and intended for planning purposes only.” 

While there is much more in the document, the final point we’ll focus on is:,

• “Elementary educators must communicate students’ progress in core academic subjects to families weekly via the district electronic gradebook.” This is also in violation of Article 5.L.1, which reads (emphasis added): Teachers are responsible for evaluating student progress and interpreting grades or reports given. If a student is not assigned to a teacher, a professional staff member shall be responsible for the grade. 

A union pushing back against even basic attempts to codify ways in which parents will be informed of their child’s progress is unfortunate. Whether these are indeed “violations” of the APS contract is not our concern. Rather, the whole situation simply highlights how bureaucracies fail to keep the education of our children front and center. Instead it becomes a power struggle.

I knew that writing in praise of Texas’ economic policies (as I did in a recent opinion column) would be polarizing. There is something about Texas that excites the passions of New Mexicans.

Here’s one email:

I read your little article in the Albuquerque Journal. You don’t think Texas has issues? Try this one – highest uninsured sick people in the country. Another one, their aggressive assault on LGBTQ, especially trans people. I’m glad New Mexico is a BLUE STATE. Texas is a litteral s^&* hole red state that let’s girls die of abortion. Their wages are also s^&* whereas wages are better in New Mexico. Even retirement is better in New Mexico then Texas and it’s why many Texans retire in New Mexico.

AND

Rest Stops and Roads.  Coming back from Dallas recently, taking 287 up to Amarillo (rest stops on 287 are fabulous) you can always tell when you cross over into New Mexico on the I-40 from Texas.  Potholes, dreadful roads, axle shattering repairs – it is a disgrace that a road in New Mexico which is far from Santa Fe is allowed to exist in such disrepair.  I pity the truckers who have to travel through our state.  Why is it that the I-40 from Amarillo to the New Mexico border is so smooth and repaired (and the I-40 east of Amarillo as well) and the I-40 in New Mexico is in such horrible condition?

We have been in NM for 16 years, went to grad school at UNM and both children graduated from UNM Law.  One has already left the state for opportunities in Dallas Fort Worth and I doubt the other will stay once she and her husband have children.  Sad but true – no opportunities in NM, lots in Texas as long as you’re willing to work.  But please settle in the state that doesn’t trigger you by all means.

The folks at Wallethub have another report which places New Mexico’s K-12 education firmly at the bottom in terms of education systems across the nation. The State ranks dead last in Math and English scores as well as dropout rate. None of this is particularly news to anyone following education policy in New Mexico.

The most telling component of the Wallethub report is the chart below which shows that New Mexico is the very worst performing state in the nation in terms of outcomes even as it is considered a “high spending” state when it comes to K-12 education.

If you are as frustrated by New Mexico’s horrendous educational performance as we are, make it a point to attend our upcoming free education conference on September 22nd. 

Perhaps unsurprisingly Gov. Lujan Grisham’s general approach to New Mexico’s education situation is to ignore it and count on a friendly media to do the same. Over the recent weekend she tweeted the following:

Our public education system is the cornerstone of our nation’s success, and my administration will continue to #SupportPublicEducation in NM. Whether it’s free and healthy school meals or the best-paid teachers in the Southwest, we are investing in our public school system. pic.twitter.com/QpNZKS365O

— Governor Michelle Lujan Grisham (@GovMLG) July 30, 2023