The headline of this blog post is the same as that of a recent article from The Verge. The new EV tax credit is contained in the wasteful and misnamed “Inflation Reduction Act.” The legislation includes a $7,500 tax break for the purchase of electric vehicles.

But, the rules are written in such a way as to effectively disqualify every EV that’s currently on the market today because the rules adopted in the legislation mandate that  eligible vehicles use batteries that are made in North America.

China currently produces 76 percent of the world’s lithium-ion batteries, while the U.S. produces only 8 percent.

Automakers could ask for waivers from the requirements, given the precedent that allowed many manufacturers to avoid “Buy America” rules that were enacted as part of last year’s bipartisan infrastructure law, according to Politico.

The obvious solution is for the US to increase domestic mining for lithium and other components of EV’s, but the very same “environmental” groups pushing EV’s tend to be the loudest in shutting down proposed mining operations. 

The latest “Kids Count” report has just been published by the Annie E. Casey Foundation with the assistance of the left-wing New Mexico Voices for Children. Sadly, New Mexico again comes in 50th, dead last in the report for overall child well-being.

At the Rio Grande Foundation, we have long held that the “Kids Count” report, while imperfect, is  a useful and largely accurate reflection of where New Mexico stands (it is a national report), but Voices for Children consistently tries to use the report to boost Democrats’ big-spending, economically-destructive, and failed policies regardless of their actual impact on children.

So, despite sliding back to 50th we get a defense of Gov. Lujan Grisham’s policies with Amber Wallin of Voices undermining her organization’s own report saying, “What’s not reflected in the data book is ‘great policy progress in the past few years that put kids first,’ she said, noting a number of legislative changes made from 2019 forward (when MLG took office).”

Attempts to defend failed policies of New Mexico’s Democrat politicians are nothing new from Voices as we noted last year. And, while RGF may not buy into pre-K as a driver of improved educational outcomes, Voices certainly does, yet they gave former Gov. Susana Martinez zero credit for her massive spending in that area. You can check out the results for yourself below:

In yet another sign that Virgin Galactic may simply never make it to its goal of manned space tourism launches out of taxpayer-financed Spaceport America, the company has once again pushed back its planned launch schedule. While the company claims the latest delay will ‘only’ push space tourism flights back to the 2nd quarter of 2023, according to Michael Colglazier, CEO of Virgin Galactic, “the company now expects those flights (on its Imagine craft) to begin no earlier than the fourth quarter of 2023.”

The reason for the latest delay is even more troubling with Colglaziier saying, The “most acute” issue was work on the central wing section of the plane, where workers were replacing the pylon to which SpaceShipTwo is attached. There are differences between the designs for the plane and what was actually built.

If this doesn’t sound like the kind of problem that can be easily resolved or the kind of issue that should be happening more than a decade into the Spaceport’s existence, you likely see why this latest delay should be of concern.

The City of Albuquerque’s foolish “free” bus program will, unless City Council puts a stop to the situation, result in good money following bad. The Albuquerque Journal editorialized recently in tepid support of the program, but also argued that in order to address increased security issues on City buses due to the program that it might have to raise pay for bus drivers AND increase security on buses due to increased incidents and problems with homeless etc.

While the Journal touts ridership growth of 36 percent over the first 6 months of 2022, the reality is that ridership is WAY down (40%) since 2019. And, there has been a sustained nationwide decline in transit ridership in the wake of COVID 19.

With the Biden Administration and Gov. Lujan Grisham constantly touting (and subsidizing) electric vehicles, the following discussion of electric vehicles from the news site Axios is worth considering.

The article is chock full of data which, if considered by policymakers, should throw cold water on the headlong push for EV’s, but as we know, that push is agenda-driven, not policy driven.

“EVs account for only about 0.6% of all registered vehicles in the U.S.”

And, “while California leads the U.S. in electric vehicle ownership accounting for 39% of all EVs registered nationwide…EVs represent less than 2% of all vehicles on the road in the Golden State.”

“As of April 1, Florida has the second-highest share of the country’s EVs, at 6.7%. Then comes Texas (5.4%), Washington (4.4%), and New York (3.6%). Yet, EVs account for only 1% or less of all vehicles within each of these states.”

Finally, New Mexico which has .6% of the US population has just .3% of all electric vehicles (according to the article). Under a new rule put in place by Gov. Lujan Grisham recently 7% of all vehicles sold in New Mexico will have to be electric as of 2025.

According to Carol Wight of the New Mexico Restaurant Association, more than 1,000 New Mexico restaurants shut down thanks to Gov. Lujan Grisham’s COVID lockdowns.

Paul talks with Carol Wight of the New Mexico Restaurant Association about the current state of the restaurant industry.  They discuss how the industry fared through the challenges of COVID-19 as well as the post pandemic challenges of inflation, difficulty in finding workers, the impact of new regulation and more. They also discuss federal and state programs that restaurants were able to use to help survive in tough times as well as future policy changes that could benefit the industry including expanding the elimination of New Mexico gross receipts tax on food to include restaurants.

The group EdChoice does polling on various education issues on an ongoing basis. You can find details on their New Mexico and national polling here.

Here are two particularly interesting items. Simply put, anywhere between 2/3rd and 3/4ths of New Mexico adults/parents support money following the children. And, vast majorities of people feel the education system is headed in the wrong direction.

The Albuquerque Journal is one of the few media outlets to have caught on to the fact which we’ve been discussing for years, that New Mexico’s workforce participation rate is terrible…and, it got much worse during COVID. The Journal and its sources cited an increase in New Mexicans on SSDI or “disability.”

Here’s the raw data from Bureau of Labor Statistics.

As you can see from the chart below, since January of 2020, shortly before the onset of the COVID 19 pandemic, Colorado has actually increased its workforce participation rate from 66.7% to 67.1%; Utah’s rate has stayed the same at 66.7%; Texas’ rate dropped slightly from 61.4% to 61.2%; Arizona’s rate also dropped slightly from 59.1% to 58.9%; and Oklahoma’s rose from 58.9% to 59%.

New Mexico not only went into the Pandemic with the lowest workforce participation rate (by far) at 55.6%, but that rate dropped rather significantly down to 54.2%

This cartoon highlights the fundamental problem facing New Mexico. We need more New Mexicans pulling the cart and fewer people in the cart. Alas, we have moved in the opposite direction under Gov. Lujan Grisham.

This article first appeared in the Las Cruces Sun News on Sunday, July 31, 2022.

New Mexico is always ranked among the “poor” states in the United States. But, as anyone who lives here or has taken stock of New Mexico’s abundant natural and cultural resources can tell you, we have no business being “poor.”

Sadly, much of our poverty is self-inflicted. It is the obvious result of bad public policy. While there are all manner of bad tax and regulatory policies that often wind up being “in the weeds,” one of New Mexico’s fundamental problems is the result of politicians’ misguided belief that the path to success involves more government spending or another big government project.

The Rio Grande Foundation has long had its concerns about two Bill Richardson-era projects of this kind: the Rail Runner and Spaceport America. Starting with the Rail Runner, the latest ridership data just came out and, over the past year the train saw 319,635 riders board the train. The train was fully operational throughout the last 12 months which included a few months of fares having been discounted to $2.50 a day.

One might think that with gas prices these days the Rail Runner would be a cost-effective alternative. Sadly, the train’s current ridership is about 25% of peak years of 2010 and 2011 when more than 1.2 million people boarded the train. Sadder still is the fact that taxpayers continue to pay tens of millions of dollars in debt service on construction of the train and nearly $20 million annually to operate it.

Shockingly, Las Cruces Sen. Bill Soules recently pledged to reintroduce legislation in the 2023 session that would theoretically create “high speed rail” from Denver to Chihuahua. The fact is that population density numbers don’t justify commuter rail between Albuquerque and Santa Fe. Now Soules wants to spend tens of billions on “high speed” passenger service spanning more than 850 miles, three states, and two countries?

Sadly, Spaceport America has proven itself to be another Richardson-era boondoggle that hasn’t lived up to its promise. Spaceport America has been open for business for more than a decade and it has yet to fulfill its mission of hosting commercial space flights.

Last July Richard Branson and a team of Virgin Galactic employees did make it to weightlessness, but the company’s stock has tanked in the meantime and their latest prediction is for flights to begin the first quarter of 2023.

Plans for those manned commercial space flights have been delayed time and again. We’re not holding our breath for flights to begin in earnest early next year.

Worse, Virgin Galactic recently announced plans to build its future fleet of spacecraft in Mesa, Arizona. Sadly, spending hundreds of millions of our tax dollars to provide a spaceport for Virgin Galactic was not enough for them to build ships here.

With massive oil and gas surpluses flowing into the state’s coffers, politicians like Soules will again be looking for new “opportunities” to waste money. But big government spending schemes have repeatedly failed to truly diversify our economy or bring sustainable growth to our state.

Instead, the governor and Legislature would better serve our state by considering why companies with a New Mexico presence (like Virgin Galactic and Intel to name two) continue to choose neighboring Arizona over us.

It might be Arizona’s school choice which has improved educational results and workforce preparedness, not to mention a willingness for families to locate there.

Or, perhaps it is Arizona’s lower taxes which has dropped to 2.5% for nearly all Arizonans under a new tax cut law.

Finally, it could be that Arizona has a “right to work” law which gives private sector workers the right to opt out of membership or the payment of dues and fees in labor unions.

No matter, it is high time for New Mexico to abandon our government-driven model and consider what states like Arizona and others do that has worked so much better.

Paul Gessing is president of New Mexico’s Rio Grande Foundation.

According to a newly-published report from Pew Center on the States New Mexico’s pension systems are among the worst funded in the US.

You can find the full report here. RGF president Paul Gessing offered comments on the issue for The Center Square here. You can see how New Mexico’s pension obligations stack up below:

One quick note, in 2020 Rio Grande Foundation worked with a bipartisan coalition in support of GOOD PERA reforms. In 2021 the Legislature decided to prop up ERB with more tax dollars. Regardless, it would seem that with record levels of oil and gas revenues putting our pension systems on firm footing and making them work for taxpayers and educators/public employees who might want to manage their own retirement $$ would be a wise thing to do.

It has been widely reported that Albuquerque Public Schools is one school district that is losing large numbers of students. We don’t know how many students other districts throughout New Mexico lost during COVID, but have heard similar numbers.

The following chart is from the National Assessment of Educational Progress. It highlights that in 2021 Catholic and other private schools remained in-person more than 90% of the time while government-run schools hovered anywhere from 50% in-person to 62%.

Further below that we re-post the Burbio report which highlights the fact that under Gov. Lujan Grisham New Mexico students were out of their classrooms more than students in all but 5 other states. It’s pretty easy to see why New Mexico families accelerated their move to schools of choice.

On this week’s Tipping Point conversation Paul talks to GOP Secretary of State candidate Audrey Trujillo.

Paul and Audrey discuss the role of Secretary of State in New Mexico and what the occupant of that position can/should do with and without the Legislature. They discuss the Secretary’s role in elections and preventing election fraud, address recent elections in 2020 and the primary election in 2020, and her plans to improve election integrity.

Finally, Audrey and Paul talk about other parts of the Secretary’s job and how it can make New Mexico more attractive as a place to do business.

American politicians from President Biden on down to Sen. Martin Heinrich and Gov. Lujan Grisham and many in the New Mexico Legislature are positively obsessed with “renewable” energy. They all pledge massive subsidies, mandates, and all manner of policies for the “transition” regardless of economic impact or the futility of actually moving the needle on CO2 emissions.

The following chart highlights just how small wind and solar are on a global energy use basis. You can see them on the chart which is better than prior to 2010, but to claim that wind and solar will result in the end of traditional energy sources is simply ridiculous and there is nothing that we can do about it barring total economic destruction. Even a crash shift to nuclear power would take decades to pull off.

And then there is China. China is already (far and away) the global leader in CO2 emissions, but China continues to expand its coal powered energy production as the July 20, 2022 article describes. 

New Mexico is certainly consistent when it comes to K-12 education performance. A new study from Wallethub places the State’s education system 51st overall. The map below shows the overall ranking, but the bubble chart below is more important because it highlights the fundamental problem of New Mexico’s education system: moderate spending for abysmal results.

As seen below, New Mexico spending ranks 28th overall, but performance ranks 51st. Clearly, New Mexico’s spending on education hasn’t moved the needle on results. It is time for bold, innovative reforms. We recommend school choice, but there are many ways to do better without spending more.

RGF president Paul Gessing traveled to Clovis, NM recently to discuss the State’s economy and education systems and what can be done to improve them. You can see the slides from the powerpoint presentation here and if you are part of a civic group that would like to hear a similar message, please don’t hesitate to reach out to us at: info@riograndefoundation.org to schedule something.

Paul’s remarks were well covered by the Eastern New Mexico News.

The following chart is from American Enterprise Institute economist Mark Perry.  Perry periodically puts together charts like this one showing how the costs for various commonly-purchased items evolve over time.

While inflation is driven by money printing and an increase in the money supply government causes inflation as well. Notably, the items highlighted below are ones in which government plays a major role. The others are ones in which government does not play much of a role.

Interestingly, in recent months there has been an uptick in the prices of new cars as is readily apparent on the chart. That is an area the government of New Mexico has taken more interest in recently with adoption of the Gov.’s “Clean Car Rule.”

Limiting government involvement in the economy is another way to reduce inflation.

Governor candidate Mark Ronchetti has released his economic plan. Paul and Wally discuss.

RGF was quoted extensively for a national article (along with NM legislators) about how the war on energy could impact New Mexico’s budget.

The latest unemployment numbers are out and despite dropping again, New Mexico’s rate remains the highest as it has been for the last 7 months.

ABQ Journal catches on to New Mexico’s abysmal workforce participation rates, increase in disability blamed.

New data from GOP national highlights trend toward job creation in red states:

COVID is spreading once again. While it is hard to put much faith in case data, deaths in NM have risen significantly in recent weeks.

Deb Haaland may be in some trouble as her net worth is likely NOT zero.

A national investment website Seeking Alpha believes PNM/Avangrid merger will happen.

Finally, ABQ Mayor Tim Keller has announced that the homeless encampment at Coronado Park will be “closed” in August. Paul and Wally discuss.

New Mexico is often forgotten about by the national media. Our poor, “blue,” majority-minority, small population, oil rich state is often overlooked in the broader national media narrative.

However, National Review recently had an article which relied heavily on quotes from the Rio Grande Foundation as well as Rep. Larry Scott and included an analysis of what could happen if/when national and state level environmental policies begin to take hold.

The Energy Transition Act remains a dagger pointed at New Mexico’s economy as soon as summer of 2023, but Democrat politicians at the state and national level could do untold damage to New Mexico’s economy and State budget if their anti-energy ideas are implemented.

New Mexico’s GOP gubernatorial candidate Mark Ronchetti recently released his economic plan. This comes on top of his recently-released rebate plan which is also included in this broader economic document (and is discussed in the link above).

You can find his full economic plan here and we’ll discuss the highlights from the RGF perspective below:

• The plan addresses New Mexico’s income tax structure with single filers having no tax burden up to $10,000 and married couples paying zero income tax on up to $20,000 of personal income. Currently the code is extremely compressed with most taxpayers paying 4.9% on much of their incomes, but under Ronchetti’s plan the 4.9% rate wouldn’t kick in until individuals make $80,000 or couples make $160,000.

• On the GRT, Ronchetti wants to eliminate tax pyramiding, eliminate GRT on “micro-businesses,” and reduce gross receipts tax rates every year. He also wants to end gross receipts taxation of rural doctors. Those are all ideas we have extensively discussed at Rio Grande Foundation and are much-needed.

• Furthermore, Ronchetti’s plan includes some kind of limits on annual government spending growth and demands voter approval of local GRT increases.
• Finally, Ronchetti’s  includes a serious discussion about getting New Mexicans back to work. Not only does New Mexico have the nation’s highest unemployment rate (as it has for 7 months in a row), but we have terrible workforce participation rates. 

There ARE some compromises. We’d like to see New Mexico’s top income tax rate dropped. If 4.9% was good enough for Bill Richardson, it should be good enough for us now. But, this is a good starting point. It is a plan that will need significant Democrat support in the Legislature at least if it is to be adopted within the first two years of a Ronchetti Administration.

COVID 19 has wrought numerous changes and accelerated the ongoing shift in jobs and economic growth to jurisdictions with pro-market policies. Powerful unions tend to fight against free markets.  The following chart highlights how jobs have continued to move from forced-unionism (non-right to work) states and to those that allow people to opt out of paying unions dues as a precondition of employment.

New Mexico is NOT a Right to Work state.

At the Rio Grande Foundation we are rarely surprised when New Mexico performs poorly in national ratings of our State’s “free market” policies (or lack thereof) or even “pro-business” policies.

The latest such report to make national headlines is the “CNBC Best States for Business.” New Mexico is ranked a dismal 46th.

Just because a report finds what we already believe (that New Mexico is not a business-friendly destination) doesn’t mean we don’t want to take a closer look at the results. So, here are some thoughts on the methodolgy:

1) The most important variable is “workforce.” New Mexico does not have a well-prepared workforce, but somehow is ranked a respectable 25.

2) Infrastructure is important, but is it really at the very top of the list right behind workforce? Regardless, while New Mexico has decent roads and rail, midwestern states like Illinois which is NOT business friendly will benefit. New Mexico is 39th.

3) Cost of doing business: New Mexico is a generally low-cost place ranking 29th overall. Our business taxes are high and utility costs are rising due in part to MLG’s energy policies like the Energy Transition Act.

4) New Mexico’s economy remains poor. Surprisingly CNBC ranks us 42nd, but with the highest unemployment rate and a weak private sector outside of oil and gas and the federal government New Mexico’s economy is not in great shape.

5) There are several additional variables in the report. Ironically “business friendliness” only garners 8% of the overall points highlighting one of the major issues we have with this report.  On the education variable the big problem is that the report “consider(s) the number of colleges and universities in each state as well as long-term trends in state support for higher education.” Funding is a terrible number to use in any report card when results, especially in K-12, should be paramount.

Overall this is a decent report that gets many things right, but it often glosses over the biggest policy failures in New Mexico and other states while boosting others (especially in the Midwest) that are not business friendly.

Speaker: Prerak Shah of Gibson, Dunn & Crutcher. Previously, Mr. Shah has served Acting U.S. Attorney for the Northern District of Texas, Chief of Staff for Senator Ted Cruz, and Chief Counsel for the Senate Judiciary Committee.

Click  here to register. Registrations are being handled by the Federalist Society, but this IS a joint event.

When it comes to economic development New Mexico politicians have for years avoided making the prudent and effective moves of reducing taxes and making them sensible and transparent. Instead, the Legislature and others have usually tried big-spending schemes, often involving generous subsidies, to benefit specific groups or businesses.

Taxpayer support for Spaceport has long been a concern of the Rio Grande Foundation. The fact that by any legitimate accounting the $250 million taxpayers have spent on the Spaceport has not led to a successful commercial space venture is just the latest of many failed subsidization policies.

Alas, while the lead tenant at Spaceport America remains non-committal on commercial space tourism launches, the company recently announced that it will be manufacturing its spacecraft…in neighboring (business friendly) Arizona. Alas, despite being the site of launches planned sometime in the future at our taxpayer-financed facility, New Mexico won’t benefit from the manufacture of the craft being launched. Here’s the Virgin Galactic press release.

On this week’s conversation Paul sits down with New Mexico real estate owner Doug Peterson. Doug will be moderating a panel discussion on crime issues on Thursday, July 14.  Through his Peterson Properties company Doug owns and manages large amounts of commercial real estate in and around the Albuquerque area. He has been active in calling attention to lax crime enforcement and the serious homeless problem facing his community. Doug and Paul discuss how the problem has evolved over time, whether the data support assumptions that crime has worsened in Albuquerque, and the various politicians and their impact on the situation.