According to the Santa Fe New Mexican an analyst (from a consulting firm) recently told the Legislature that New Mexico is too dependent on revenues from fossil fuels (mostly the State’s oil and gas industries).

According to the analyst “This boom is bound to fade, with market fluctuations and changes in energy policies, leading to as much as $26 billion less in fossil fuel revenue in the next 15 years than the state’s yearly forecasts suggest.”

Hopefully this analyst was doing some pro bono work and was not being paid by the Legislature because we at the Rio Grande Foundation have been offering the same advice for YEARS. While the analyst is undoubtedly correct insofar as an economic downturn or a sustained move away from oil and gas could impact the State’s revenues, the reality is that this is a production-driven boom and until the world no longer needs oil and gas, New Mexico’s most important economic product will remain a foundation of its economy.

The issue, of course, is that New Mexico’s political classes have failed to enact long-overdue tax and regulatory reforms that result in a better business climate. Certainly the Rio Grande Foundation will push for these much-needed reforms, but sadly the Democrats who control the Legislature and Gov. are not advocates for reform.

The map and chart below are from a 2018 Bloomberg report on states and their relative economic diversity. It is no surprise that New Mexico was at the very bottom.

The Rio Grande Foundation recently led a diverse coalition of 19 state policy think tanks in submitting comments in opposition to the Federal Railroad Administration’s (FRA) proposed Train Crew Size Safety Requirements Rule (Docket Number FRA–2021–0032;RIN 2130–AC88). You can find the comments here.

As employers across the nation struggle to find enough employees, the Biden Administration wishes to impose a 2 person crew size mandate on railroads. In 2016, the FRA stated that it could not “provide reliable or conclusive statistical data to suggest whether one–person crew operations are generally safer or less safe than multiple–person crew operations.” And, in 2019, the FRA concluded that, “Accident/incident data does not support a train crew staffing regulation.”

As the letter states:

The proposed rule also ignores technological advances in rail safety made in recent years, including Positive Train Control (PTC). PTC is now operating on tens of thousands of miles of rail line across the country, tracking speed restrictions on a given portion of track, as well as signals and communications, while preventing human error. PTC’s safety advances make it unnecessary for two crew members to be present in the cab of the train.

This proposed rule fails to account for these technological innovations, as well as the safety record of many railroads, including thousands of Amtrak and commuter passenger trains that operate with only one crew member in the train cab.

In the 2022 session New Mexico’s Democrat majority passed HB 132 which placed a 36% rate cap on “consumer loans.” Even in an inflationary environment, to middle and upper class people a 36% interest rate is not particularly attractive. Those people have collateral and other means of obtaining cash in a pinch. The Rio Grande Foundation continues to oppose this cap.

The same cannot be said for many poor New Mexicans who live paycheck to paycheck and are one emergency away from losing a job or car. While the legislation has passed, the New Mexican piece does a reasonable job of showing both sides of the debate.

Jobs in the industry are being lost as one unnamed employee says, “It’s kind of sucky that it’s happening, it’s closed our competitors’ stores, and of course we can no longer lend after Dec. 31st, so eventually my job will be gone once we do our collections and stuff like that. A lot of my old peers and co-workers have already lost their employment due to this new change.”

Quoting further from the article:

Curt Cook, who operates Navajo Trading Co. in Farmington, which stopped offering installment loans about a month ago, agreed.

“Any place where it’s required that [borrowers] have a certain credit, certain assets and things like that to qualify — well, they don’t. That’s why they’re with me,” he said.

Killing jobs AND cutting off banking opportunities for low-income New Mexicans is hardly good public policy. Worse, policymakers who supported the ban really haven’t offered any serious solutions.

The Legislature will have a positively mind-blowing $3.6 billion budget surplus. What is that by comparison?

The PED has also made its budgetary request which, while not a huge increase, highlights the ineffectiveness of boosting spending with no reforms. After producing terrible results in the latest NAEP test the PED and Legislature are considering “dumbing down” education standards:

Among the bills to be considered in the Legislature this year is “net zero.” Energy expert Alex Epstein has thoughts.

Pulling back on ABQ’s “free” buses won’t be easy. 

As Fauci retires and Twitter owner Elon Musk stokes debate over Fauci’s record it is worth noting what he got wrong during his “leadership” of US health policy in the COVID pandemic.

The Biden Administration has made its contempt for the so-called “gig” economy clear. The Administration has proposed multiple rules which would force those workers into “employee” status even though being an Uber driver (for example) simply doesn’t fit nicely into that type of employment status.

The Rio Grande Foundation provided public comment in opposition to the following two Biden Administration rules which would force workers into these unnecessary and absurd boxes. You can click on our comments below:

1. National Labor Relations Board RIN 3142-AA21, “Standard for Determining Joint-Employer Status.” Comments Due December 7, 2022.

2. Department of Labor, Wage and Hour Division, RIN 1235-AAA3, “Employee or Independent Contractor Classification Under the Fair Labor Standards Act,”
Comments Due December 14, 2022.

Millions of workers nationwide enjoy the freedom of the “gig” economy while also providing useful services to even larger numbers of Americans. The Biden Administration’s attacks would be harmful to workers and American consumers alike.

According to the latest news reports New Mexico has a mind-blowing $3.6 billion budget surplus available to it when the Legislature convenes in January. This is, of course, derived largely from a production-driven boom in New Mexico’s oil and gas industry. Between now and January we and others will have plenty of time to discuss potential uses for the money. For now we’d like to simply help people grapple with the sheer size of this surplus.

1. The budget surplus alone is a mind-blowing 43% of the current $8.4 billion budget which is in itself a 30% bigger budget than when Susana Martinez left office.
2. The budget surplus alone is virtually the same size as the FY23 (current year) K-12 budget ($3.8 billion) which is a 41% increase over 5 years.
3. The budget surplus is more than 7X the State’s “public safety” budget and 3.5X the entire higher education budget.
4. The State could ELIMINATE the entire gross receipts tax ($3.047 billion) for FY 2024 and still have nearly $600 million left over.
5. The State could ELIMINATE ALL personal and corporate income taxes ($2.107 billion for FY 2024 and still have $1.5 billion left over.

What WILL happen is anybody’s guess. With New Mexico’s continued economic struggles there are plenty of opportunities for the type of pro-growth tax reform the State sorely needs.

As a quick reminder, New Mexico’s state and local spending is already tops in the nation according to the website US Government Spending:

On this week’s interview Paul talks to Sandra Whisler, MD and Howard Gogel, MD about New Mexico’s medical provider shortage. This is the second conversation Paul has had with medical professionals regarding the serious issues New Mexico is having with attracting and retaining medical professionals.

New Mexico’s GOP re-ups with Steve Pearce as Chair. Also, Paul offers a few more thoughts on voter turnout during the last election. 

The PRC picks 9 candidates for Gov. MLG to pick from. RGF adjunct Kenneth Costello was NOT among the finalists. Paul and Wally discuss.

Wal Mart joins RGF in their innovative use of “StoryFile” technology.

New Mexico is following the “Voices” playbook, but to what end? 

A new study tallies up the cost of COVID learning loss to $900 billion in lost income.

It’s back to the office on January 1 for state employees.

NM’s workforce participation rate has not only NOT recovered from before COVID, it has actually dropped since June.  

At the Rio Grande Foundation we continue to report on and discuss New Mexico’s worst-in-the-nation NAEP scores, all while massively increasing education spending. Sadly, the initial reaction in the Legislature and Public Education Department seems to be to reduce standards rather than making long-overdue changes to the education system.

For starters, there is legislation being drafted to eliminate Algebra II as a requirement and reduce the minimum number of class-unit credits needed for graduation. Currently New Mexico is among the 20 states that require Algebra II for graduation.

Replacing Algebra II with a course on real-world statistics isn’t necessarily a bad idea, but we certainly would question the reduction in overall class credits. Notably, according to the Santa Fe New Mexican, “The state Council of University Presidents has cautioned in recent years that a reduction in high school class requirements, including algebra, could adversely affect college readiness and increase the need for remedial studies.” Given the Gov.’s “free college” it would seem that this may be yet another effort to push high school education onto the backs of New Mexico’s colleges and universities. 

And then there is the the PED’s recent decision to eliminate the need to pass a standardized test in order to graduate. Standardized tests are not perfect, but they provide a basic understanding of what students should be able to do upon graduation. Eliminating the test only further undermines the relevance of graduation rates which are easily inflated and reinforces the need for a high-quality national test like the NAEP.

Gov. Michelle Lujan Grisham didn’t offer many specifics about her plans for a second term during the campaign, but she has actively supported such legislation and will likely do so in the 2023 session. 

Energy analyst Alex Epstein has thoughts:

Reject Net Zero, Embrace Energy Freedom

“Net zero by 2050” policies would be apocalyptically destructive if fully implemented and *have already been catastrophically destructive* when barely implemented.

They should be totally rejected in favor of energy freedom policies.

🧵👇

— Alex Epstein (@AlexEpstein) December 7, 2022

Epstein is definitely worth a follow on social media and he sends regular emails. Furthermore on the issue of “net-zero” Epstein argues:

In practice “net zero” means: rapidly eliminate most fossil fuel use.

“Net zero by 2050” policies include:

• • Escalating restrictions or bans of fossil fuel development
  • Escalating restrictions or bans of fossil fuel use
  • Mandates of alternatives
  • Subsidies for alternatives
  • (Often) hostility to development
  • (Often) hostility to nuclear

Even left-wing environmental groups and their supporters believe “net-zero” is a way to placate current political trends while punting “actual” action into the future. 

MLG’s public education department secretary Kurt Steinhaus presented his department’s plans in terms of what they would like out of the 2023 legislative session. If adopted the education budget would rise from $3.8 to $4.1 billion annually (an increase of 7.9%).  PED spending accounts for 45 percent of the total state budget in fiscal year 2023. If this spending proposal is adopted education  spending will have grown from $2.69 billion to $4.1 billion, a massive 54.2 percent increase since just FY 2018.

NOTE: The Santa Fe New Mexican article linked here and above states the request was for $4.1 billion while the Albuquerque Journal (a day later) states the request is for $4.3 billion.  The Journal’s calculation results in a 60% increase since FY 2018.

All that being said, with $2.5 billion (and possibly more) in “new” money available to the Legislature this session, this request isn’t that big. One potential bright spot within this budget is the $23 million allocation for early literacy and reading support and math initiatives, including teacher training and additional literacy coaches.

Steinhaus also proposes using $109.3 million to give all staff 4% pay increases which Steinhaus claims “will help us address the educator workforce crisis and  fill teacher vacancies.”

Will any of this “move the needle” on New Mexico’s education outcomes (which rank dead last)? It’s doubtful. Focus on early reading and literacy can be effective, but must be a center of real focus along with other reforms like those that have worked in Mississippi.

The plan of two Albuquerque city councilors to eliminate “free for all” ($3 million for the rest of us, in addition to the system’s overall costs) bus ridership has been postponed as of Monday night’s council meeting. As KOB-TV reports:

The proposal details a 25% increase in security calls in just the first few months after the free bus fare program was launched. The state attorney general’s office also claims the shoplifters are using the free buses as getaway vehicles and councilors believe increasing the price could keep away those bad actors.

But, as with any government spending program, even gentle tweaks in the interest of public safety are attacked by well-funded left-wing activists. Check this article out from the left-wing Source. NM. Incredibly, there is a well-funded advocacy organization called Together for Brothers that works to make buses “zero-fare” with a focus on “transit justice.”

In a classic Marxian argument the leftist activists claim, “The bus is perceived as more dangerous because of the stigma and bias against the ridership, especially compared to those with the most power.”

According to the City budget the City plans to spend $63,571,000 (a big increase) to service a dramatically-shrinking number of riders. Dividing the budget over the 2021 ridership number comes to: $14.46 per ride. In most cases that’s more than an Uber trip and certainly more convenient.

In her reelection campaign Michelle Lujan Grisham made a lot over the State’s low unemployment rate. Unfortunately, when it comes to workforce participation, not only has New Mexico not come close to achieving pre-pandemic levels, but the State’s participation rate actually DROPPED by .5% from June 2022 to October 2022.

Will the 2022 session include ANY public policy reforms that address New Mexico’s low rate relative to other states? Full chart below and linked.

New Mexico has followed the left-wing “playbook” of groups like Voices for Children, not for years, not even just for decades, but for the better part of a century. In a recent op-ed, the head of Voices highlights ways in which the 2022 election further supports their vision of a large government with numerous, “generous” welfare programs.

And, while it is true that New Mexico has had Republicans in the governor’s mansion over the years and not ALL Democrats for the last 92 or so years have been “progressive” in their own day or certainly by modern standards, the reality is that New Mexico has been a liberal bastion in the American Southwest even relative to neighboring Colorado.

Alas, all that money hasn’t helped New Mexico get out of 50th place in Voices’ own report, despite the infusion of massive oil and gas money (which Voices loves to hate). Perhaps it is time for New Mexico to change direction by adopting a more market-driven economy and a choice-driven education system?

As has been commented on at this site and on some others, voters in some of New Mexico’s most conservative counties did not show up on Election Day 2022.

We have worked through a bunch of calculations using data from the SoS website and have determined that with Mark Ronchetti having lost by 45,467 votes, there is no realistic way for him to have won based on turning out more votes in New Mexico’s most conservative (and underperforming counties) which include: Lea, Roosevelt, Curry, Otero, and Chaves Counties. The populations simply aren’t big enough to put him over the top even at turnout levels exceeding the state average (52.38%).

However, if Yvette Herrell’s home county (Otero) and the areas eligible to vote for her in Lea and Eddy Counties had turned out at the statewide average, Herrell would have closed the 1,350 vote gap with Vasquez and won by a few hundred votes.

As an aside, turnout in New Mexico’s most conservative counties has been an issue in past elections. Just looking at the presidential cycles of 2020 and 2016 we find:

In 2020 statewide turnout was 68.67%

Lea: 55.89%
Eddy 67.31%
Chaves 64.03%

In 2016 statewide turnout was 62.36%

Lea: 52.54%
Eddy: 63.79%
Chaves: 60.39%

Needless to say, voter turnout in Lea County (Hobbs area) in particular tends to lag dramatically  behind the statewide average, but other SE New Mexico counties tend to as well, just not by as much.

New Mexico voters may have given MLG a second term, but perhaps the saddest part of that was to reward her poor performance on COVID. And, while her decisions were made 2.5 years ago, the studies highlighting her mistakes (and those of pro-lockdown governors), especially in education continue to come in.

One study highlighted above, found that student learning loss will amount to $900 billion. That study used NAEP test results and extrapolated future earnings based on educational performance. Given NM’s devastating decline in test scores even relative to other states, this will of course be especially challenging.

Furthermore, an editorial in The Wall Street Journal quotes one of the researchers observing that, for eighth-grade students:

College enrollment would fall 2.4%. Meantime, the number of high school dropouts would increase 3.6%, of teen mothers by 3.2%, of the unemployed by 6.6%, and of young men incarcerated by 14.2%.

Finally, as Christopher Jacobs points out in The Federalist, another study analyzing this year’s NAEP results proved what many observers might intuit: The poorest areas suffered worst from learning loss.

More money hasn’t helped New Mexico kids much whether the conversation is pre or post-COVID. MLG certainly hasn’t put forth any detailed education plan. How long do New Mexico kids have to wait?

On this week’s interview Paul sits down with Elizabeth Stelle, Director of Policy Analysis at Pennsylvania’s Commonwealth Foundation. The organization recently published a comprehensive study and ranking of state policies relating to public employment laws:

The report, “The Battle for Worker Freedom in the States” analyzes state laws that either constrict or increase freedom for public sector workers. Not surprisingly New Mexico ranks poorly in this report at “D-.”

Finally, after more than 2.5 years of living with COVID-19, Gov. Lujan Grisham is telling State employees they need to return to their offices on January 1. The Rio Grande Foundation recently spoke to KOAT Channel 7 about the issue and the fact that $18 million annually was being wasted on empty office buildings.

While there is understandably some pushback from government employees to returning to their offices, the fact is that in most cases state workers are better paid with better benefits and less stress than most any other equivalent job.

According to a 2014 report from the American Enterprise Institute New Mexico government employees receive 24% greater overall pay and compensation benefits than their private sector counterparts (that’s “only” 20% if you don’t include job security which we ALL saw the value of during COVID. See chart below:

So, if New Mexico government employees don’t want those jobs anymore, good luck to them. If the State wants to manage up and create clear policies to make sure the work gets done in a telework environment that would be fine, but why do that after 2.5 years? (many complain that government workers didn’t do much work remotely).

The City of Albuquerque rejected rent control legislation, but a bill will be introduced in the upcoming session.

My opinion piece which ran in papers around the state over the last several days asks some pertinent questions.

A scandal recently exposed by KRQE’s Larry Barker involving New Mexico’s capital outlay process illustrates why passing Amendment 2 was a bad idea and highlights other issues in state/local governance.

Once upon a time Arizona trailed New Mexico in education outcomes (4th grade reading NAEP scores). According to Statista, New Mexico now spends 19th-most among US states on K-12 education (More than $15,000 per-student).

We at the Rio Grande Foundation may sound like a broken record repeatedly highlighting the disconnect between New Mexico’s education spending and the results of its education system.

Sadly, according to data from Statista (linked and below), New Mexico now spends an astonishing $15,338 per-student on K-12. That is the 19th-highest among states and in excess of our neighbors. According to this same chart, both Arizona and Mississippi spend approximately 2/3rds the amount New Mexico spends per-student.

But, as the charts below that show both Mississippi and Arizona have dramatically moved the “needle” on education results including the all-important 4th-grade reading (according to the latest NAEP results).

The case is clear. Arizona and Mississippi are reforming their systems and improving results. New Mexico is spending more money and, if anything, seeing worse results.

As reported in the Albuquerque Journal (via the Washington Post) recently, retail giant Wal Mart unveiled a hologram version of (deceased) founder Sam Walton. The technology, called StoryFile, is the same as that released just one month ago with New Mexico Attorney General candidate Jeremy Gay.

The major difference is that you can physically go to a Wal Mart and see/interact with a hologram as opposed to interacting with the “virtual” representation of the interviewee online.

Regardless of the mechanics, this new technology is sure to become a popular way to give average people the ability to engage in a more realistic-feeling way with public figures (dead or alive).

The following article appeared in Las Cruces Sun-News on November 27, 2022.

This Election Day a majority of New Mexico voters seemingly ignored the State’s manifest failures of governance. Instead, voters prioritized abortion rights while penalizing anyone who could plausibly be painted as “election deniers.”

Thus, New Mexico, one of America’s “bluest” states for decades, became even more Democrat dominant. Democrats now control every office of significance in State government as well as all five seats in Congress.

Whether the results are a sign of satisfaction with the status quo or just animus towards Republicans, the fact is that New Mexico’s governing Democrats faces serious challenges. Here are some that need to be addressed in the next few months:

1. PNM (the State’s largest utility) has repeatedly expressed concerns about having enough electricity during the summer of 2022. The San Juan Generating Station coal plant was allowed to continue operating for an additional three months during this past summer due to fears of blackouts and brownouts. That will not be an option next summer. In fact, there has been little improvement in New Mexico’s electricity supply situation since then. What will the Gov., her new PRC, and the Legislature do to keep the lights on for New Mexicans? Waiting until the heat of next summer is not an option. Decisions need to be made right away.
2. Speaking of the PRC, the Gov. now has a chance to mold New Mexico’s powerful regulatory body into something of her choosing. Will she prioritize geographical and ideological diversity or make the body a rubber stamp for her California-style policies? And, will they push through the Avangrid/PNM merger (rejected by the elected PRC but supported by the Gov.) as one of their first acts?
3. New Mexico is one of just 11 states still in a COVID 19 emergency. It has been in a an “emergency” since March of 2020 (more than 2.5 years at this point). Will the new Legislature demand a “seat at the table” or continue to allow the Gov. to keep control until she sees fit? What does this mean for “democracy?”
4. Voters approved Amendment 1 which taps into New Mexico’s permanent fund to boost education spending. With an expected $2.5 billion surplus, education spending is likely to rise even further. The State’s recent NAEP scores placed New Mexico at the very bottom across all four grade levels and subjects tested. Will New Mexico simply continue increasing education spending or will needed reforms be enacted?
5. Speaking of that budget surplus, the Gov. and Legislature undertook a series of tax cuts in the 2022 session in anticipation of the election. Can New Mexico taxpayers expect further tax relief? If so, will those tax cuts be superficial, or will they address the State’s knotty economic challenges like “pyramiding” of the gross receipts tax?

Most of these questions are for New Mexico’s (even more) ascendent Democrat majority, but there is one question for the GOP: what can be done to boost voter turnout (and overall political engagement) in New Mexico’s most conservative areas? Overall voter turnout was 52 percent. In liberal Santa Fe County that number was over 63 percent. But, in conservative bastions like Lea, Eddy, Chaves, San Juan, Otero, Curry, and Roosevelt counties, turnout lagged the statewide average, sometimes by double-digit margins.

Many conservatives feel like their vote doesn’t make a difference either due to the State’s “blue” status or allegations of election fraud. Either way, New Mexico’s GOP must figure out how to engage its base through grassroots activism to become relevant.

No matter which side of the aisle you’re on, New Mexicans of all political stripes face more questions than answers.

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

KRQE’s Larry Barker has uncovered an example of corruption in both the City of Albuquerque and State of New Mexico governments. Ironically, while what happened is clearly illegal under current State law, voters’ (misguided) decision to pass Amendment 2 on Election Day seems to allow for future deals like this one.

The Duke City Gladiators may be named after Albuquerque, but they play in Rio Rancho. That didn’t stop the City of Albuquerque (seemingly just Mayor Keller) from using City and State capital outlay dollars meant for use in the City ($239,622) to fund a turf field for the team.

Using Albuquerque $$ for a Rio Rancho project is problematic enough, but the spending is clearly for private use (Gladiators) of public property (Gladiator’s field) without compensation which is a violation of the “Anti-Donation Clause” of the State Constitution.

Ironically, State voters JUST decided to weaken New Mexico Constitution’s anti-donation clause (which disallows the use of tax dollars for private benefit). The Rio Grande Foundation argued against the change in advance of the vote due to the very real potential for corruption as sign in this example.

In October the City of Albuquerque Council on a bipartisan 7-2 vote rejected an initiative that would have placed the City on record as supporting rent control. We applauded the move at the time.

But, in “progressive” and poorly governed New Mexico no bad idea is ever totally dead. So, pro-rent control activists seem to have convinced powerful Democrat State Senator Linda Lopez to introduce legislation that would eliminate the State’s ban on the practice.

Some supporters claim this is all about “local control,” but the reality is that the Legislature makes economic policies that cities must adhere to all the time, including 2019 legislation that was adopted to prevent local governments from adopting “Right to Work” laws.

The truth is rent control won’t solve the problem of rising rents. Only expanding the housing supply (with a side of reducing inflation) will bring housing/rent prices down. But, it’s easier for the economically-illiterate to simply demand a legislative “fix.”