After Gov. Lujan Grisham single-handedly reduced Rail Runner fares (from $9 for a day pass to $2.50) a year ago, many people thought they’d never go back up. Shockingly, they recently DID go back up to the normal price (which, of course, comes nowhere near paying even for the train’s operations, but it’s something).

Unfortunately, the City of Albuquerque seems hellbent on keeping “free” fares on the city buses despite the manifest problems caused by this policy. As we have discussed previously, Albuquerque’s bus ridership has been in a long-term decline that precedes the COVID pandemic. The number of people riding the bus DID increase slightly under the new fare regime of 2022, but the end of the pandemic and other economic forces may have played just as significant a role (or free fares MAY have even decreased ridership due to security concerns).

The following questions regarding New Mexico’s new social studies standards were posed by an elected official to Dr. Arsenio Romero Secretary of New Mexico’s Public Education Department. We believe the responses are of interest to school boards and parents who may be concerned about what is being taught to their children.

• Does our school district have to adopt from the approved PED suggested social studies curriculum list?

High-quality instructional materials (HQIM) and professional development for teachers to be able to use those HQIM matter for students and provide equitable access to grade level instruction no matter what level they are starting from.  The legislature made an appropriation this legislative session (2023) for instructional materials as part of the State Equalization Guarantee (SEG) as well as a special appropriation for instructional materials.  Given these appropriations, school districts may select instructional materials that are not included on the adopted multiple list.  If your district does not select instructional materials that have been reviewed and adopted by PED, then we encourage you to have a rigorous review and selection process at the local level using a research-based rubric(s).  You can learn more about the state instructional material review process  here.

• When is the deadline to adopt?

Although there isn’t a deadline to adopt new instructional materials, the NM adoption cycle recommends LEA’s purchase social studies and fine arts instructional materials for use in SY23/24. There is a cycle to assure that materials are considered for refresh on a continual basis.  LEA’s may adopt new instructional materials based on their local needs.

• When will the new materials be implemented?

Districts can make their own local decisions about when to implement new materials; however, they should be implementing the new social studies standards in SY23/24.  If districts don’t purchase new instructional materials that are aligned with the revised social studies standards and the fine arts standards then teachers may need support with supplementing their current materials to ensure students are receiving instruction based on all the grade-level standards.

• Does the school district have to attend all PED offered DEI trainings?

The Acronym “DEI” is unfamiliar, so the following answer is regarding the professional development modules PED has made available for free to all districts to support the implementation of the new Social Studies Standards.  The following table provides a summary of the modules.  The state-wide Implementation Plan offers a suggested timeline for effective implementation and was provided to districts in early 2022.

• Do we have to read the free profession development books PED sends us?

No

• Can the parents and community have the opportunity to review the schools district’s top choices before the school board adopts?

Yes, per statute 22-15-8-B, parents and community members are required to be notified about the adoption process and parents are to be invited to be involved in the adoption process at the district level.  See below.

“Local school boards shall give written notice to parents and other community members and shall invite parental involvement in the adoption process at the district level.  Local school boards shall also give public notice, which notice may include publication in a newspaper of general circulation in the school district.”

• Can the district choose to pick curriculum that meets the standards but is not recommended by PED

Although districts may select instructional materials that are not on the NM adopted multiple list as either “recommended” or “recommended with reservations,” we highly encourage districts to begin their selection process with the adopted multiple list and our “HQIM Reviews” webpage.   Please see the LEA Support for Social Studies Instructional Materials one-page  for additional guidance.

Talk of where a possible stadium for the New Mexico United is in the news again. For starters, we are pleased that in the wake of their defeat over a ballot measure for a taxpayer-financed stadium, that the team is (largely)  going the private financing route this time.

However, just because a stadium is constructed using private $$ doesn’t mean no tax dollars or resources are at stake. The team’s owner Peter Trevisani strongly implied recently that the possible location would be Balloon Fiesta Park. As KRQE notes, the undeveloped land around Balloon Fiesta Park, is either owned by the City of Albuquerque, the county, or Sandia Pueblo.

That is prime real estate in a city that doesn’t have much available land for big projects. Pueblo land would need to be purchased or swapped. And it would also seem that a soccer stadium is not a great place to land hot air balloons. In the event a stadium is built “privately” at Balloon Fiesta Park, it still seems like this could be a costly option.

We remain of the opinion that some kind of working relationship with either UNM football at University Stadium (football used 6 or so games a year) or further expansion of UNM’s 6,200 seat soccer-only facility located in the same area would be the most logical and cost-effective places for the United to play.

When Russia invaded Ukraine over a year ago energy prices leaped higher. Since then there has been continued argument between advocates on both sides as to what kinds of policies should be put in place in the wake of this crisis.

RGF president Paul Gessing was asked to debate the issue in a short series of  articles by Divided We Fall. Needless to say, we at the Rio Grande Foundation emphasized the critical need for free market approaches and traditional energy sources while his opponent pushed in the opposite direction.  Read the short series of articles here. 

Prior to the 2023 New Mexico legislative session the state was known for having some of the most generous film subsidies in the nation with taxpayers reimbursing film production companies for anywhere from 25 to 35 percent of their expenses in New Mexico. 

During the recently-completed session the cap on film spending was increased and some films will be able to get up to 40% of their costs reimbursed through the addition of another 5% subsidy for filming outside of Albuquerque and Santa Fe.

Now, we have the announcement that Mayor Tim Keller has finally received funding for his dream of at least partially restoring the Rail Yards building. How? What else, more subsidies for the film industry (albeit somewhat indirectly). In this case $40 million was set aside during the 2022 session for a so-called New Mexico Media Academy in 2022.

Will the $20 million in capital outlay money be enough to get the Rail Yards building into shape as a school? We have no idea and fully expect more $$ to be allocated to that effect. And, of course there will be ongoing subsidies (like the other $20 million already allocated) for the ongoing operation of the new school.

Guest article by Glen Lyons

Glen applied and was a finalist for New Mexico’s reconstituted Public Regulation Commission, formerly with Texas’ ERCOT and ExxonMobil
He was a guest on Tipping Point New Mexico episode 491. 

You can find Glen’s profile at LinkedIn

Using the State’s Oil and Gas Revenues More Efficiently and Effectively, While Creating the Best Program to Alleviate Poverty. Ever.

New Mexico’s oil and gas industry is booming. Some New Mexicans are happy about it because they rely on it for their livelihood. Others simply appreciate what the industry does for them. Still others are not happy because they do not like the industry one bit. Even though there is a wide range of views out there, there is one thing that everyone can agree on: the industry is bringing in a lot of money to the state.

New Mexico’s state government is currently collecting roughly $5B a year from the oil and gas industry, if not more. That’s about $2,500 for every man, woman, and child who calls the state home. Moreover, that amount has been growing rapidly in recent years. Part of the growth is due to higher oil prices, although oil prices can go down as quickly as they go up. Part of the growth is due to rapidly increasing oil production. While no one can predict where the prices will go, the production will likely continue to increase for years to come. As a result, New Mexico is now the third largest oil producer in the U.S. after Texas and the Gulf of Mexico. New Mexico in fact is now a larger oil producer than the country of Mexico. And what will the state’s government do with all that wealth? I’m pretty sure that the answer is “spend it.”

All New Mexicans, no matter what their view of the oil and gas industry, should be concerned about how the state government uses that money because a large amount of money could be wasted and worse, it could trigger the “resource curse.” I’ll explain the resource curse below, but for the moment, consider why the government keeps and spends the money. What if instead of leaving the money with the government to manage, the state simply gave it to the citizens? Who couldn’t find a good use for an extra $2,500 a year? Or for a family of four, an extra $10,000 a year? After all, it isn’t the government’s money. It’s YOUR money.

Below I will explain the concept of the resource curse and explore this novel approach to avoiding it by giving the money directly to the citizens. This could not only avoid the resource curse but alleviate poverty quickly and directly and put the state on an economic growth trajectory that would be the envy of all other states.

The Resource Curse

Many countries have found their economies suddenly transformed by a large discovery of oil and gas. For some, the transformation is largely positive, as it provides a strong stimulus for new jobs and infrastructure and the development of other businesses and industries. For other countries, the transformation is not positive. The sudden influx of money is, at best, a weak stimulus, or worse, a hurt to the economy. The “resource curse” is the name given to the cases where the transformation is small or even negative. Venezuela is an example of a country with an abundance of oil and gas reserves that has suffered from the resource curse. Venezuela has the most oil reserves of any country in the world, more than Saudi Arabia and four times as much as the U.S. Yet Venezuela’s GDP per capita is around $15,000. GDP per capita for the U.S. is more than $70,000, or four and a half times higher than that of Venezuela, a country with four times as much oil!

This is counterintuitive. Shouldn’t a country with an abundance of resources become fabulously wealthy? They should, but they won’t if those resources are mismanaged. Typically, a large portion of the income from the sale of those resources flows into the government, and all too often, governments misuse those funds.

Why would a government mismanage the income? I’ll offer a few reasons. First, as the amount of money grows, the temptation for corruption grows. Second, even if corruption doesn’t grow, the ability of any government to wisely spend the money, given the disparate and changing needs and interests of its many citizens, is severely limited. Third, any attempts by a government to wisely spend the money will be interfered with by political maneuvering as various interest groups lobby to direct more of the funds their way. Fourth, and perhaps worst of all, the new wealth becomes a distraction, resulting in lost focus and a degradation in quality of the basic services of government.

One terrific way that the government could use the money is to provide school children with free lunches. We can all agree that childhood hunger is a serious problem, and it must be addressed. The question that we should all ask ourselves then is how best to address it? If we rely on a government program, it will suffer from at least some of the problems that are common to all government programs that I mentioned above. A government program can’t provide for all the varied tastes and dietary needs of all children. A government program can’t match the daily supply of food to the daily demand without wasting a lot of food. The administrators may fall prey to prospective food suppliers, all offering good arguments as to why their offering is unique and should be selected above all others.  Moreover, the state would have to pay for layer of administration as well as oversight to ensure that there isn’t any misuse of the money.

Alternatively, if the state simply gave the money to the citizens, parents could use the money directly to buy meals for their children. A parent would choose meals that better match their child’s tastes and dietary needs. A parent will know what their child will eat, and what their child won’t eat thereby reducing waste. Now some will argue that we can’t trust parents to spend the money wisely. I completely reject that argument. Every parent I’ve ever known has deeply wanted the best for their children.

Childhood hunger is just one issue that government could attempt to tackle with the money. There are many other issues that are in desperate need of attention, from improving education itself to reducing crime to improving health care, to name just a few. The number of potential uses of the money can quickly become dizzying. Each program that government to tackle one of the issues will suffer the same challenges that I mentioned above.

The continued growth of oil and gas revenues will cause the government to quickly create many new programs because they see many needs. Yet doing so risks losing focus and thereby unintentionally undermining the quality of current government programs. They must stay focused to be at their best.

Avoiding the Resource Curse

The most cited examples of an approach to avoiding the resource curse are countries that have created a “wealth fund.” Norway is one such example. It created the Government Pension Fund Global, aka the Oil Fund, to capture surplus revenues from the oil industry. The Norwegian government spends some of the oil revenues while saving the rest to be used later. That still leaves the government in control of the savings because they think they know best how to manage and use the money. I strongly disagree with all such notions and see that as the weakness in Norway’s Oil Fund. First, the government will always be tempted to tap into the fund. So far Norway has avoided such temptations, but the Oil Fund is valued at more than $1T and growing so, yeah, that’s quite a temptation. Second, and more importantly, individuals know how best to use money for the benefit of themselves and their families. No one else could ever know that.

Key to avoiding the resource curse is to get the money into the hands of the people. The only reason that’s not the default is because the money is initially paid to the government, making it difficult for them to see it as anything but a windfall to their “business.” However, the government doesn’t own the resource or the revenue coming from it. The government exists to protect the resource and the revenues for its citizens. Both belong to the citizens. The citizens should get the revenues. YOU should get that money.

Not only should you get that money, but you will do a better job of managing it. You know your needs and interests and those of your family. Maybe you will spend some of it. Maybe you will spend all of it. Maybe you will put it all into savings or pay down a debt. Maybe you will buy a home. Maybe you will use it to open a business or start a college savings account. Whatever you would choose, that is the best outcome for you, much better than any government program.

Getting the funds directly is not only best for you in the short-term, but it will also lead to the greatest economic growth for all in the long-term. Why is that? Because the growth will be in goods and services that the people of New Mexico need and want, as “voted” by their individual spending decisions. That’s how real growth happens, organically through individual decisions which reflect each person’s greatest needs. Government spending, in comparison, is based on guesswork as to needs and can’t be targeted, making it less effective and less efficient.

A Better Solution

My solution to avoiding the resource curse then is very simple – give the money to the people. It is their money, only they know how they could best use it, and, as a side benefit, they will become more engaged with the state government’s oversight of the oil and gas industry. It seems like a no-brainer.

If I’m correct why aren’t we seeing this elsewhere? In most cases, governments of even the best people will see endless need for government spending. They perceive many societal issues as being beyond the ability of individuals. Those issues therefore need government programs in their opinion. At the end of the day though, I’m confident that the citizens will do a better job of allocating the money than the government. Individuals know their individual needs. The government does not.

There is a precedent for this approach in Alaska. In 1976 Alaska created the Alaska Permanent Fund (“Fund”) to capture the state’s oil revenues, mostly provided by the production of oil from Alaska’s North Slope. The main use of the fund has been to pay out the Permanent Fund Dividend (“Dividend”), that is, giving the money to the people. Part of the fund is saved to be used after the oil production has run out. One thing about Alaska’s program that can’t be questioned is its popularity. During one period of very low oil prices ($9/barrel) the government put a vote to the people asking for permission to spend part of the Fund for government purposes. Despite the support of the governor, many others in government, and campaign money, the public voted against it by nearly 84%.

I propose that New Mexico one-up Alaska by adopting a program which is even better for its citizens. The improvements would be as follows:

• Pay out ALL the funds. That puts all the money in the hands of citizens where it’s needed and where it’s best used. Governments will always be tempted to try to access the funds as they did in Alaska.
• Rather than simply paying out money, give citizens ownership in the state’s oversight of the industry.Set up a corporate-like structure where citizens and only citizens of New Mexico are given shares. Just like with a corporation, the shareholders will get dividends, vote annually on key policies, and have influence over the direction of oil and gas development.
• Allow trading of the shares (and hence, the associated dividends) among citizens. Allowing this will recognize the different positions and interests of New Mexicans. Some might value more money now and so wish to sell their shares. Buyers for those shares might place a higher value on the future dividends to secure income. Still others might place a premium on the ability to influence the industry’s direction and so have an interest in acquiring the shares of others. There are no doubt many other reasons why citizens would want to buy and sell shares.
• Pay the money out as frequently as possible. Getting the money into the hands of the people quickly is the right thing to do, but the more frequently it comes in, the better they will be at managing it and anticipating changes in the amount. An annual amount, alternatively, can seem like either a great gift to be celebrated, or a great shock when it’s substantially lower than the prior year.

Such a program will not only be politically popular but will be far more effective at growing the economy than any government programs because the spending of the money will go into everyone’s needed goods and services rather than goods and services needed by only some.

The Politics

I have no doubt that many in government will quickly dismiss this idea for a variety of reasons. Let’s take some of those likely reasons head on.

• This will create opportunities for exploitation. Won’t wealthier citizens take advantage of the low-income citizens by buying up their shares at a low price? To the contrary, if there is a market for the sale of shares among lower income citizens, then interested buyers will have to compete to buy shares, thereby bidding up the price. Low-income citizens who place a very high value on more money today would be able to take advantage of the interest of prospective buyers.
• Not all the money will be put to best use. No doubt some citizens will spend their dividend in ways that don’t make sense to others. It’s always difficult to understand the decisions of others and second-guessing is most often misguided. Most citizens will use their dividend for goods and services, including things like savings, that make the most sense in their lives. No government program could ever hope to approximate that.
• Citizens may vote their share to undermine the oil and gas industry. Shareholders in corporations do get to vote their interests freely. That puts pressure on corporations to engage with shareholders and listen to their concerns. The same thing would happen in this case, the oil and gas companies would listen to the thoughts of the citizens more closely than they do today and try to incorporate those thoughts into the ways that they do business. The citizens would have greater ability to influence the industry. Voting does of course mean that some citizens can simply cast their votes to oppose the industry at every opportunity. That’s how voting works.
• Citizens may vote their share to favor the oil and gas industry. What if citizens like the dividend so much that they want to increase oil and gas drilling or want to reduce the legislative and regulatory oversight of the industry? Again, that’s how voting works. Likely, some citizens will be very supportive of the industry while others will staunchly oppose it.
• This is just populism. Yes and no. Yes, as Alaska has shown us, a New Mexican oil dividend program would have very strong appeal to many voters. Call it populism or call it democracy. The difference is in the eye of the beholder. If I were an ambitious politician, I would seize upon this policy proposal when running for office. More importantly, creating an oil dividend program would be the best thing for the citizens of New Mexico, today and in the future. That’s what’s so great about this idea – it would be wildly popular and the right thing.

Conclusion

Governments composed of only the best people can do just so much. The more they take on and the more quickly they do it – the more spending and the more programs – the less efficient and effective they will be. The citizens of New Mexico can use the state’s oil and gas abundance much more efficiently and effectively. That more efficient and effective use will result in the most organic and lasting economic growth. That kind of growth will have people across the world studying New Mexico’s approach to avoiding the resource curse and will maximize the resource blessing that nature has provided the state.

Throughout the 2023 New Mexico legislative session we at the Rio Grande Foundation have been tracking the Legislature’s votes on various economic, education, and constitutional issues from a pro-freedom perspective via our Freedom Index. Bills receive scores anywhere from -8 to +8 depending on the overall impact of the legislation. Legislators are assigned points as floor votes are taken. Alas, we cannot rate committee votes.

You can find a spreadsheet detailing all the votes included in the index here.

We are pleased to announce that freshman Senator Joshua Sanchez of Belen but representing a sprawling district that goes all the way to the Arizona border, won the top prize with a score of 75. Sen. Bill Sharer was second with a score of 72 and Sen. Schmedes representing an Albuquerque-area district in the East Mountains was third with a score of 70.

Alamogordo’s own Rep. John Block took home the top prize in our Freedom Index this year. Paul and Wally discuss some of the other results and trends. Paul and Wally also discuss the departure of David Abbey from the LFC and the hole that he leaves.

According to a new Wallethub report New Mexico taxpayers get a terrible return on investment.

Yes, the Biden Administration really was trying to ban gas stoves. Sen. Martin Heinrich claims to oppose “dark money,” but he is also a leading supporter of the “dark money” group “Rewiring America.”  

A hidden video captures school board trainer Andrew Sanchez pushing against “parental rights” and instead arguing that “parental rights end when you decide to send your kid to public school.”

Paul and Wally have talked about this anti-donation clause issue. Now, it is clear that the turf was ONLY to be used by the Gladiators football team. The indoor soccer team playing in the same arena is NOT allowed to use the turf.

A new report from Wallethub finds that New Mexicans bear the 14th-highest burden among US states. Amazingly, this is true despite the fact that 40% of New Mexico’s budget is generated from oil and gas revenues and Wallethub DID NOT include oil and gas revenues among those borne by New Mexicans.

Given this astonishing figure one MIGHT expect that New Mexico’s Legislature would have focused like a laser on reducing those tax burdens during the recently-completed 2023 session which saw the State blessed with a $3.6 billion surplus. Sadly, the tax bill passed by the Legislature is a mess of conflicting tax hikes and tax cuts that fail to address New Mexico’s economic needs or the needs of its citizens for broad-based tax relief. Even the bill’s welcome gross receipts reductions are phased in over several years and are contingent on the state generating historically-high tax revenues.

A few of the Wallethub report’s charts can be found below:

Source: WalletHub

Fundamentally, New Mexico’s spending is far too high and has grown rapidly in recent years. 

Throughout the 2023 New Mexico legislative session we have been tracking the Legislature’s votes on various economic, education, and constitutional issues from a pro-freedom perspective via our Freedom Index. Bills receive scores anywhere from -8 to +8 depending on the overall impact of the legislation. Legislators are assigned points as floor votes are taken. Alas, we cannot rate committee votes.

You can find a spreadsheet detailing all the votes included in the index here.

The best overall voting records were compiled by Alamogordo area freshman legislator Rep. John Block. Block was followed by Rep. Randall Pettigrew who represents parts of Hobbs and surrounding areas.

Kudos and thank you to Rep. Block and Rep. Pettigrew for their strong leadership. We’ll discuss the Senate and have more scores in a subsequent post.

As we’ve mentioned before here, the tax omnibus bill passed in the 2023 session was one of the most complicated pieces of legislation to have passed the Legislature, not just this year, but for some time.

There were extensive changes to the legislation made in both the House and then in the Senate. In our Freedom Index we rated the House-passed version a +2 and the Senate version a -1. With potential point totals ranging from “-8” to “+8” we obviously feel that this bill was not great or terrible public policy, but missing the opportunity to reform the GRT pyramiding limited the bill’s positive score.

The variations had to be resolved through a process called concurrence after which leaders from both houses hammered out an agreement (here’s our take on that).

Curiously, the New Mexico Legislature’s website does not include those concurrence votes (you can look here). We had to ask for them.

The House passed the final version on a voice vote meaning everyone supported it. The Senate passed it, but there was a formal vote taken (click here). We actually felt the final bill was so mediocre as to merit a “0” score so the Senate concurrence vote was not included in our final vote tally. Nonetheless, we think this information should be public.

It is hardly a surprise to anyone that follows New Mexico (or national) politics that officially-speaking Sen. Martin Heinrich opposes so-called “dark money.” What this means in practice is people expressing their strongly-held views by giving to non-profit organizations (like Rio Grande Foundation) that provide research and express opinions about what happens in Washington and Santa Fe.

At the Rio Grande Foundation we differ on that professed position of Heinrich’s, but we also note that Heinrich is a hypocrite on the issue. As energy analyst Robert Bryce points out in a recent column  one of the most notable groups Heinrich aligns himself with, Rewiring America, is also a major “dark money”-funded organization. For example, Heinrich co-chairs the “electrification caucus” in the US Congress, a project with heavy involvement of Rewiring America.

As Bryce notes, “Rewiring America, which has about 40 employees, is among the most prominent members of this dark money network. The group doesn’t publish its budget or file a Form 990 (the Rio Grande Foundation does this). Instead, it is a sponsored project of the Windward Fund, a 501c3 non-profit that does not disclose its donors. Nor does it reveal how much it is giving to Rewiring America.”

The group DID recently hire failed Georgia gubernatorial candidate Stacy Abrams to push its message though.

On this week’s interview Paul talks to Romie Sandoval and Ricardo Hill. These two young men were legislative staffers for Republican legislators during the session. We discuss how things work “behind the scenes” and how average people can both get involved and influence policymakers. Sandoval and Hill are political consultants in their full-time jobs, so we discuss various issues around getting candidates elected in New Mexico.

On this week’s conversation Paul and Wally discuss the 2023 session and its conclusion. Most notably, they address the massive tax “omnibus” package that wound up passing. It did not include needed reforms, but there were numerous components to the bill.

They also consider the situation with regard to medical providers. Previously it had appeared that no action would be taken on medical malpractice, but that changed quickly in the final days of the session.

Finally, Wally and Paul offer a broader perspective on the session. With “progressives” firmly in control, did they have an organizing principle or a strategy? How about the minority Republicans? How should they message what happened and didn’t happen?

The Freedom Index scores are almost finalized. You can find them here.

With the legislative session a week behind us now, we at the Rio Grande Foundation have been reflecting on the outcomes of New Mexico’s 2023 Legislative Session.

Going into the 2023 legislative session, we at the Rio Grande Foundation had a few primary goals.

1)  Use the state’s massive $3.6 billion surplus to reform the “pyramiding” and business service taxation inherent in New Mexico’s gross receipts tax. Rep. Jason Harper has worked tirelessly on this needed reform. While it was not included in the final bill, we are grateful for the allies of the New Mexican taxpayer.

2)  Push for education reform to improve upon New Mexico’s abysmal 52nd position in the National Assessment of Educational Progress (NAEP). While it did not pass, Sen. Jerry Ortiz y Pino’s bill to increase school choice options for low-income students gained traction in the Senate. We are delighted to support school choice legislation, and Sen. Ortiz y Pino’s bill indicates a bipartisan desire to increase opportunities for students in some of our worst performing districts.

3)  Restore “democracy” by placing some kind of limit on this and future governors’ emergency powers. Several bills were introduced by Rep. Greg Nibert and Sen. Greg Baca in their respective chambers but unfortunately failed in committee. The fight to pull in our elected officials continues, but we are thankful to have legislative champions like Nibert and Baca. The Foundation testified in support of restoring the Legislature’s powers in emergencies in this and previous sessions. 

The Foundation also worked to push the Legislature to address the impending electricity shortage which could hit New Mexico as soon as this summer, addressing the medical provider shortage, and helping to push back against bad bills.

While the results of the session could have been better for ideas of liberty and prosperity, thankfully, a number of bad ideas died in the session:

• • A new paid leave scheme (SB 11) would have resulted in tax increases borne by employees and employers alike. It fortunately died after passing the Senate. The Rio Grande Foundation testified in opposition and participated in a rally at the Roundhouse. 
  • Most big environmental schemes failed: SB 520 net zero, HB 426 clean fuel standard, and the HJR 4 “green amendment” all died.
  • Bills to ban plastic bags statewide were thwarted. This was a particular surprise. The Foundation testified on this issue and has opposed such bans in Albuquerque and other cities. We were pleasantly surprised by this outcome.;  
  • HB 25 and HB 28 which would have increased New Mexico’s minimum wage both failed. The Foundation also testified against these bills. 

Unfortunately, despite devastating NAEP test scores, the Legislature didn’t act in a fundamental way to improve the State’s failing K-12 system. And, despite the threat of electricity reliability issues nothing was done to keep the lights on.

But you can count on the Rio Grande Foundation to continue to bring attention to these two issues through our Opportunities for All Kids NM and Lights Out NM programs.  We remain committed to advocating for you.

How did your legislators vote on these and other issues? Check out the Foundation’s Freedom Index here.

The 2023 New Mexico legislative session resulted in a grab-bag of policies that included both tax hikes and tax cuts. Overall the session, even with a $3.6 billion surplus, offered no fundamental approach to economic development or anything else.

The folks at Wallethub have a new report showing that New Mexicans receive the 3rd worst return on investment (ROI) of any state in the nation. Only California and Hawaii perform worse. For full details click the link above, but a few of the charts below highlight the abject failure of New Mexico government to perform its basic functions, a situation enabled by voters who continue to elect the same politicians year after year.

The Biden Administration, Sen. Martin Heinrich, and the left in general have all denied that the Biden Administration EVER intended to ban gas stoves. Here is ONE of many such denials from an Albuquerque-based media outlet. In reality, an internal memo between the Administration and the Consumer Product Safety Administration clearly stated that the Administration was planning to move forward on a total ban.

Fox News actually broke the story, but the relevant text has been pasted below. An NPR is a “Notice of Proposed Rulemaking”:

A few things about gas stoves:

🔥 They emit dangerous air pollutants that can cause serious health risks
🔥 Without proper ventilation, indoor air quality can reach levels not considered safe for the outdoors
🔥 No one will be trying to pry them from your cold, dead hands

— Martin Heinrich (@TeamHeinrich) January 12, 2023

On this week’s interview Paul sits down with Kathleen Sgamma, President of the Western Energy Alliance. Kathleen spends her time advocating for energy issues in the “Intermountain” West which includes New Mexico.

Kathleen and Paul discuss an underreported scandal involving Interior Secretary and New Mexico politician Deb Haaland. They also discuss Haaland’s role in making decisions about Chaco Canyon itself as well as the Willow project in Alaska which had not been finalized as of our conversation.

Check out this important conversation about energy and New Mexico’s important role in American energy production!

The 60 day legislative session is in the books. Fans of public policy that would result in increased economic growth, an improved education system, affordable, reliable electricity, and rule of law were sorely disappointed by the 2023 session (if they had any expectations to begin with). But, we at Rio Grande Foundation had low expectations coming into the session. Even with those low expectations we were pretty disappointed by the lack of legislative focus on improving New Mexico’s business climate or prospects for economic growth.

You can read through the complicated legislative history of the tax omnibus HB 547 here.

We hoped for fundamental reform of the gross receipts tax “pyramiding,” but we knew that even this would be an uphill battle despite the State having a $3.6 billion surplus. Indeed, no actual plan was ever put forth among the numerous “omnibus ” tax bills to address the pyramiding issue, so we can assume that the Democrat-led Legislature never made that a priority.

Here is our take on what happened in the FINAL bill (we have commented on the several previous iterations). Our comments are (broadly) in order of the overall importance of the policies considered:

Lack of pyramiding reform, but GRT rates reduced 0.5 percentage points. Sadly, instead of taking effect next year the tax reduction will take effect over FOUR years. If that’s not bad enough if GRT revenue in any fiscal year after 2025 and before 2030 is less than 95 percent of GRT revenue from the previous fiscal year, the rate would snap back to 4.75 percent. New Mexico is in the midst of an unprecedented boom in oil and gas and SHOULD see continued growth, but there is no need for these “triggers,” especially when, as Rep. Christine Chandler noted, “delaying the full implementation of the GRT rate reductions for four years was necessary in order to pay for the film tax credits.”

It is hard to conceive of a more economically-misguided approach than to put broad-based tax relief on hold in order to throw more money at an already heavily-subsidized film industry. Under the new law SOME film projects will be reimbursed for a mind-blowing 40 percent of their overall spend.

The ONLY glimmer of real GRT reform is that at the last second a provision was inserted into the bill to eliminate taxation of deductibles and co-pays for medical care. This is something we have advocated for for many years. It represents some positive movement in the effort to address the doctor shortage.

More to come on the rest of the bill in the next few days.

With just 48 hours or so left in the legislative session, the majority Democrats just can’t seem to settle on a final tax package. The bill (HB 547) which started off terrible as introduced in the House, was improved significantly before being voted on in the full House, has now passed the Senate after several amendments that will make the bill significantly worse.

Here are the lowlights (just the changes). You can find our discussion of the House-passed bill here.

1. The Senate-passed bill adds EVEN MORE GENEROUS film subsidies on top of those New Mexico already pays out. New Mexico taxpayers could pick up the tab for as much as 40% of the cost of certain films. The bill also nearly doubles the overall cap on film subsidies from $110,000,000 annually to $210,000,000.
2. Alcohol taxes will go up by 5 cents per drink and more of the money collected (relative to the House-passed bill) will go to the general fund as opposed to alcohol treatment programs.

While these changes are bad and make the Senate bill an overall negative in our Freedom Index, in reality, the worst part of the bill as passed by both houses is the increases in capital gains taxes. Current law allows a 40% deduction. This bill takes all of that away except for $2,500. The only exception is the sale of a business that would net 40% deduction if the value is $300,000 or less. Republicans have pushed for removal, but Democrats seem unwilling to remove from the bill.

The House-passed version of HB 547 was a +1. The Senate version is -2. The Senate version now heads back to the House for concurrence. We’ll see if they buy what the Senate is selling or not. Also, Gov. Lujan Grisham should carefully consider how many tax hikes she wants to sign with a $3.6 billion surplus.

The City of Albuquerque and State of New Mexico share the cost of cleaning up under Interstate highway underpasses. Unsurprisingly costs have skyrocketed since 2020 as the homeless problem has worsened and City leadership has refused to deal with the issue head-on. KOAT Channel 7 covered the issue and interviewed Paul Gessing about the problem and the costs it imposes. You can watch here or by clicking on the picture below:

The House-passed tax bill is MUCH better. It is a complicated piece of legislation and it remains a missed opportunity. That said it will probably be amended in the Senate and possibly by MLG.

A paid leave proposal (SB 11) was discussed in Santa Fe on Friday, the bill has now failed in a welcome bit of news for New Mexico businesses and many workers.

The New Mexico’s Legislature doesn’t seem to be inclined to address the doctor shortage.

What’s the latest on the plastic bag ban? Will it pass? 

The City of Albuquerque’s inspector general says the City recently violated the anti-donation clause.

The Freedom Index scores continue to pile up.