Legislation, HB 367, has been introduced in the New Mexico Legislature,  that would reduce New Mexico’s GRT rate by an additional 0.25 percent tax (on top of a .25% reduction that is already being implemented) meaning the state’s gross receipts tax rate would drop to 4.625% in July. You can read news reports no the plan here and here.

What’s even more critical is that this proposal would FINALLY address the biggest current problem with New Mexico’s gross receipts tax (pyramiding of taxes especially those on business services).

This is genuinely good news and both Gov. Lujan Grisham AND Rep. Jason Harper (who has been dogged in his determination to address this issue) deserve credit for taking it on.

So far the main opposition comes from revenue-rich local governments like Albuquerque which says it could lose up to $30 million under the proposal. Will the proposed reform have enough momentum to get over the finish line? Would some kind of “hold-harmless” like what was done when Bill Richardson ended the tax on groceries help? We don’t know but we are certainly pleased with this development.

Which counties are New Mexico’s economic drivers? A new study from the Arrowhead Center at NMSU has the details.

School Choice managed to pass out of a committee last week: SB 113 by Sen. Ortiz y Pino would create a system of tax credits for school choice and it moved out of its first committee. Here are where things stand now that the session has been going on for 3 weeks as of Tuesday.

The ABQ Journal took a look at New Mexico’s medical provider shortage. 

New Mexico now produces more oil than the nation of Mexico. 

Legislative consultants are again pushing the narrative that New Mexico faces a “budgetary abyss” if something bad happens to the oil/gas industry. They may be correct, but NM faces plenty of problems already and has tended to waste the oil and gas money available to it already. Here is an op-ed written by the consultants.

The Rio Grande Foundation tracks and rates legislation in New Mexico and has done so since 2014 (find our Freedom Index archive here). Bills are given scores as bad as -8 and as good as +8 and when those bills move to the floor for votes, the points with a “yes” or “no” vote are attributed to all of the legislators in both parties.

Currently just a few floor votes have been tallied, but that number is starting to grow along with the numbers associated with each legislator. We strongly encourage citizens and anyone interested in what is happening in New Mexico to check out our Freedom Index and use it.

A side benefit of our software provider BillTrack50 is some interesting “data nuggets.” For example, the chart below shows whether bills enacted by the Legislature and Gov. were sponsored by Democrats, Republicans, or both parties. Understanding that a Republican, Susana Martinez was Gov. from 2010 through 2018, Democrats remained quite influential in passing bills throughout that time.

Since Lujan-Grisham and the Democrats took over all three branches of New Mexico government in 2019, the number of GOP-sponsored bills passing began to shrink dramatically. Just one GOP-sponsored bill passed in 2022.

You can find out more interesting nuggets for yourself here.

Considering New Mexico’s usual location at the top of the bad lists and bottom of the good ones New Mexico’s 31st ranking on a new National Taxpayers Union Foundation report which ranks the US states on their attractiveness as places to work remotely. You can find the full report here.

Since the COVID 19 Pandemic remote work has become an increasingly popular option including right here in New Mexico.

The authors had the following to say about New Mexico’s status as a work-from-home location:

While the states that come out best are those with no income tax, there are lots of other things that states can do to make their policy environments friendlier to remote workers.

The state manages to salvage an average rank by virtue of its 16-day withholding threshold. Though this is half the gold standard of 31 days, a 16-day threshold is a not-insubstantial protection. New Mexico could improve its rank further by reaching reciprocity agreements with high-traffic neighbors and instituting a filing threshold to benefit individual mobile employees.

To improve, New Mexico should consider adopting a defined-day filing threshold and raising its existing withholding threshold to greater than 30 days, as well as entering into reciprocity agreements with neighboring states.

Of course, with the massive surplus New Mexico policymakers have available to them, they could and should consider reducing income taxes. You can click through on the interactive map below.

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In Sunday’s Albuquerque Journal two stories highlighted the self-inflicted policy issue that are pushing doctors out of New Mexico. You can see the articles for yourself here and here along with a telling chart below.

The stories echoed RGF’s solutions which include addressing the medical malpractice bill passed a few years ago, reducing Medicaid dependency, and eliminating GRT taxation of medical services (as we pointed out in a new report).

One of the challenging aspects of policies like the medical malpractice bill (HB 75 in 2021) is that it was a “compromise.” Trial attorneys and Democrats were pushing even worse legislation on the issue, so final passage of the bill attracted support from numerous GOP senators (you can find out who at the link).

New Mexico’s problems (like nearly all of them) are driven by bad public policy. But until voters hold the politicians accountable for their bad policies, we will continue to get more of them.

We have already expressed our reservations about the New Mexico Legislature’s “favorite” consultant PFM and their recommendations. But, in yet another recent Albuquerque Journal article we (and the Legislature) are told again that if New Mexico’s oil and gas industry “go bust” the State will face dire budgetary and economic conditions.

New Mexico is indeed over-reliant on oil and gas, but as I point out below, that’s not the State’s biggest issue. Rio Grande Foundation is at the forefront of researching and advocating for policies that would diversify our economy, here are a few points PFM is missing.

1). See the chart below, oil and gas in New Mexico is being driven by new discoveries. Prices could go down for a sustained period of time and that would be a challenge, but oil and gas are not “going away” anytime soon. Stop the fearmongering.

2). With serious social and economic issues New Mexico policymakers should be considering ways to improve conditions right away. Unfortunately, the big-government approach that have been relied on for decades in New Mexico have ALREADY failed. PFM should recognize that fact.

3). Diversifying the economy and diversifying government revenue sources are not the same thing. It’s no surprise that their recommendations are so “off” given the consulting is funded by the left-wing Rockefeller Family Foundation.

Several members of the Lujan Grisham Administration have departed recently in the midst of the legislative session. Paul and Wally discuss some of the more notable departures.

RGF recently released a study about the medical provider shortage. 

Last week was School Choice week. Bills have been introduced on both the Democrat and Republican sides of the aisle to create choice. These bills will be heard in the Senate Education Committee on Wednesday, February 1.

Despite a massive surplus some powerful Democrats are pushing to raise taxes. One bill, HB 119 would add a 6.5% and 6.9% top rate on top of the 5.9% rate and the 6.5% rate would kick in at $200,000 annual income for married couples.

Under Bill Richardson NM’s top income tax rate was dropped to 4.9%.

Some bills reining in the Gov.’s emergency powers have passed out of their first committees and are on their way to House Judiciary Committee.

The Foundation’s Freedom Index bill tracking site is a tool people can use to find out how the bills they support/oppose are faring and how their legislators are voting on them.

A new Wallethub report says New Mexico has one of the smallest wealth gaps by race/ethnicity. This undermines a lot of left-wing talking points, but notably New Mexico is poor AND even the wealthiest in New Mexico don’t register relative to other states.

Anyone who follows New Mexico’s budget and politics is well aware that the State is going through an incredible oil boom. As can be seen in the chart below from the Financial Times, New Mexico now produces more oil than the entire nation of Mexico.

This is a testament the American ingenuity, but it is incumbent upon New Mexico’s Legislature and Governor to use this windfall to improve the State’s economy and move the state toward economic prosperity.

Most New Mexicans are at least vaguely aware of the outsize impact the State’s oil and gas industry has on the State’s economy. A new report from the Arrowhead Center at New Mexico State University called “State of New Mexico County-Level Revenue & Expenditure Analysis, 2015-2021″ highlights that economic impact by examining revenues and expenditures on a county-by-county basis. 

The list of top-5 counties in terms of their net contributions can be found below. When contributions and expenditures (by the state) are taken as a whole, Lea and Eddy County contribute massively to the State budget with Los Alamos, Bernalillo, and San Juan counties all contributing significantly as well.

Interestingly, Santa Fe and Doña Ana both have negative net returns per person in the $10,000 range. Here’s the full report with data from each of New Mexico’s counties.

It is way to early to be optimistic about them passing, but for those who (like the Rio Grande Foundation) would like to see a restoration of balance of power between the Legislature and Gov. in future emergencies, a few bills that would restore that balance have moved through their first committees.

HJR 3 and HB 80 would require some form of legislative approval to change or end a state of emergency in New Mexico. The former would amend New Mexico’s constitution to do it while the latter would do it legislatively (constitutional amendments are lengthier but do not require the Gov.’s signature).

After nearly three years since the Gov. declared COVID 19 an emergency. According to the National Academy for State Public Health New Mexico is one of just eight states in a declared emergency and MLG shows no sign of letting go of her powers.

We hope that now that the 2022 elections are behind us the partisan Democrats in control of both houses will make separation of powers and “democracy” in New Mexico government a priority.

Despite New Mexico having an unprecedented budget surplus the “progressive” Legislature seems hell-bent on raising YOUR taxes.

HB 119 which is being sponsored by the Chairs of the House and Senate Tax Committees AND the Senate Majority leader is one of the most concerning bills of the 2023 session. It also highlights the rapid leftward shift of New Mexico’s Democrats.

Back during the Richardson Administration New Mexico’s top income tax rate was dropped to 4.9 percent and as the Rio Grande Foundation noted, they were successful in moving New Mexico’s economy in a positive direction. 

HB 119 would create TWO new rates and would NOT index them to inflation, meaning that over time more and more New Mexicans would be pushed into them.

For Married couples filing jointly, the income tax rate is 4.9% up to income of $315,000. The rate rises to 5.9% after that.

Under HB 119 the new, higher top rate for married couples would move to 6.5% while kicking in at $200,000 and the 6.9% rate would kick in at $500,000.

The bill awaits hearing in the House Tax and Revenue Committee, but given the sponsors it must be of concern.

On this week’s interview Paul talks to his old friend Drew Johnson. Drew and Paul both worked in Washington, DC for the National Taxpayers Union (and Foundation). Drew and Paul discuss government waste and their past and current efforts to reduce it. Also, Drew recently ran for office in Nevada which allows for mail-in ballots and vote harvesting among many other questionable practices. You don’t want to miss this informative conversation.

Braver Angels, the burgeoning national movement battling our country’s painful political divide in every state, will be presenting its signature event, the Red/Blue Workshop, online via Zoom on Saturday, March 4. You can participate in this free event!

This event, hosted by BA’s North-Central New Mexico Alliance, brings together an equal number of people (usually 5-8) from different sides of the spectrum in a structured but spirited conversation aimed at moving beyond partisanship to work together for goals we share.

Thousands of people across the country have joined in these workshops and found through personal interaction that having a different opinion need not make someone else our enemy, and that the fight to save the nation we
love begins with a cease-fire among ourselves.

Searching for solutions beyond partisanship is a key goal Braver Angels shares with the Rio Grande Foundation, said BA’s New Mexico state coordinator, Marty Gerber. All levels of the organization, he noted, from local to national, share their leadership between Red-leaning and Blue-leaning citizens, and the
local alliance is actively seeking to add more conservative participants for its March 4 workshop.

Further information and a chance to sign up are available here.

Asked how realistic it was to think the polarization that continues to shred our country can actually be changed, Gerber quoted the words of Keith Johnson, a Republican who had just attended his first BA Red/Blue Workshop: “If you did 20,000 of these across the nation,” Johnson said, “you would change the world—I truly believe that.”

In 2019 Paul sat down with New Mexican Scott Lopez who was State Director at the time to, among other things, discuss Braver Angels.

The New Mexico Legislature has convened in Santa Fe and “progressives” led by Democratic House Speaker Javier Martinez will be actively promoting “equity” and other policies supposedly meant to help the poor.

Interestingly, according to a new report from Wallethub analyzes the states with the largest and smallest wealth gaps by race/ethnicity and found New Mexico came in just 45th which means that New Mexico’s wealth gap was among the SMALLEST among US states.

Curiously among the states with smaller wealth gaps were a diverse group including Florida, West Virginia, Alaska, and Hawaii.

Among States with larger gaps were Wisconsin, Minnesota, North Dakota, and Nebraska.

Arguably this is good news for New Mexico’s, but it also reflects New Mexico’s overall poverty of which New Mexico is among the very poorest. Even when it comes to tracking the very richest person in each state New Mexico’s “richest” is low on the list (further reflecting both New Mexico’s poverty and its lack of a robust private sector).

RGF/Paul’s case against the City of Albuquerque for its “donation” to Planned Parenthood has officially been filed.

Also, RGF successfully appealed its free speech case at the United States District Court.

A few notable bills coming up in Committee for which RGF will deliver testimony.

Also, the Democrats added $2 million to the must-pass “feed bill” which funds the session. The money will pay for a study of “professionalized” legislature, but this kind of policymaking should be done in the traditional legislative process, not the feed bill.

Build Your Dreams 2.0: Albuquerque experiences another EV fail as legislation is being introduced to mandate 75% of the State’s fleet is electric.

RGF examines the reality of NM’s medical provider shortage in a new report that is part 1 of a 2 part series.

Meanwhile, the amount of money being requested in the latest budget for Medicaid is a positively mind blowing: $10.5 billion. A portion of those dollars are being proposed to “backfill” for an expiring federal COVID program that expanded Medicaid for 100,000 people in New Mexico. Paul had an opinion piece in several New Mexico newspapers highlighting the costly failure of Medicaid expansion in New Mexico. 

Finally, RGF’s Freedom Index bill tracking system is up and running so you can track the best and worst bills (and votes) of 2023.

It’s National School Choice Week across the United States. And, while New Mexico’s Legislature has not been particularly friendly to choice in recent years, the fact is that New Mexico DOES have some choice to celebrate (most notably charter schools), but it needs a lot more to improve the State’s poor educational performance.

A few bills are likely to come up for hearings in the New Mexico State Senate soon. Here is a link to the Senate Education Committee page with a list of members.

The VERY best bill is SB 109 put forth by Republican Craig Brandt, a Republican, which would create a system similar to that adopted in Arizona in 2022 which would create a program to allow the Public Education Department, in contract with parents of participating students, to pay for private school and other eligible expenses.

Another bill worthy of support is SB 113. This bill, introduced by Albuquerque Democrat Jerry Ortiz y Pino, would create a system of tax credits to be used for school choice. This is an idea the Rio Grande Foundation has been working on for more than a decade and Ortiz y Pino has supported the idea in the past. A brief (albeit old) discussion of how a school choice tax credit program might work can be found here.

We’ll keep track of other bills of interest and report on them in this space.

New Mexico has a shortage of medical providers across most practice areas (as discussed in Part 1 of this series). So, as the 2023 legislative session gets rolling, what can be done about it?

The Rio Grande Foundation has looked high and low throughout New Mexico laws impacting medical providers and has produced a series of recommendations laid out in an extensive policy paper.

1) While forward looking in nature, HB 75 passed in 2021 and was revised later on that same year makes New Mexico’s medical malpractice much more plaintiff and attorney friendly through the increase in damage award caps is  causing a great deal of concern among providers even though it will not be implemented until 2024;

2) Stop taxing medical providers via gross receipts tax. The State is one of the few states in the entire nation that levies the equivalent of a “sales” tax on certain medical services. In New Mexico’s largest city, Albuquerque, the rate of taxation is currently 7.75 percent. Rates tend to be even higher in outlying areas of New Mexico. This could be part of a broad reform or more targeted.

3) Reduce Medicaid dependency.  According to the American Hospital Association, Medicaid underpaid hospitals by $24.8 billion in 2020. For Medicaid, hospitals received payment of only 88 cents for every dollar spent by hospitals caring for Medicaid patients in 2020. In 2020, 62 percent of hospitals received Medicaid payments less than cost.

4) Expand scope of practice/telemedicine.

There are several additional ideas outlined in the report along with more detailed discussion of the ideas listed above. All of it can be found here.

The following appeared in the Las Cruces Sun News on Sunday, January 22nd, 2023.

In December the Legislative Finance Committee (LFC) published a report on New Mexico’s Medicaid program. Whether by design or accident, the report happened to coincide with the 10^th anniversary of New Mexico’s Medicaid expansion. Then-Gov. Susana Martinez decided to accept the “ObamaCare” expansion dollars which, at the time, was 100% federally funded.

The LFC report is full of great information, but it doesn’t attempt to assess whether Medicaid expansion was worthwhile. Unfortunately, when it comes to government programs (especially here in New Mexico) increased spending and good intentions are not often followed by thoughtful assessment of whether the spending has achieved stated goals. Even less common are analyses of whether the new program itself was cost-effective in achieving those goals.

The media covered the LFC’s report which focused mostly on difficulties the Committee’s “secret shoppers” had in making appointments with doctors for Medicaid patients. For example, the LFC found that only 15 percent were able to make an appointment with a primary care doctor. Other doctors were not accepting patients, failed to return phone calls, or were no longer at that phone number. These findings highlight an important problem with Medicaid: having “coverage” (especially from a government welfare program) doesn’t mean you have access to medical care.

Less prominent in the news reports was the fact that the LFC reported that an astonishing 47 percent of all New Mexicans are on the program and a positively mind-blowing 77 percent of births are on Medicaid.

Ample reporting has been done about New Mexico’s medical provider shortage. While there are many reasons for that shortage, our State’s massive Medicaid population and the program’s low reimbursement rates for providers are certainly factors. Any doctor will share their views on the challenges of serving large numbers of Medicaid patients.

New Mexico’s extraordinarily high number of Medicaid recipients is at least partially to blame for the State’s low workforce participation rate. The LFC itself has noted that Medicaid and other government welfare programs, “can disincentivize work through either excessive benefits or reduction of benefits as recipient wages increase.”

Furthermore, the LFC report notes that Medicaid is the largest healthcare payer in New Mexico, and the state has the largest Medicaid program per capita in the country. Between FY19 and FY23, HSD projects total Medicaid spending to increase approximately 56 percent from $5.6 billion to $8.8 billion. In other words, by next fiscal year Medicaid alone will be spending more than New Mexico’s current General Fund budget.

Sadly, the LFC did not take up a detailed discussion of health care outcomes and the impact (or lack thereof) of Medicaid expansion. The LFC did note that, “the state continues to face poor health outcomes overall.” And, even more interestingly, while providing routine medical care for the poor was a stated goal of advocates for expansion, the LFC notes that “Emergency room visits for non-urgent reasons have increased, potentially leading to worse outcomes.”

After a decade of massive federal and state spending growth on Medicaid the LFC does not point to significant positive health care outcomes from Medicaid expansion for New Mexico’s population at large. Given the incredible impact this program has on state and federal budgets, it would be nice to know whether Medicaid expansion is having a positive impact or not. The LFC didn’t even mention the lack of evidence on health outcomes much less call for such research or upbraid the legislature for failing to conduct it already.

The largest and most expensive expansion of the American welfare state in the last 50 years seems to have resulted in bigger government and more government dependency. However, here in New Mexico with the highest percentage of people on Medicaid, evidence of improved health outcomes remains elusive.

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

Thanks to legal help from the Liberty Justice Center, a non-profit, public interest litigation center, the Rio Grande Foundation and its president Paul Gessing have filed a lawsuit against the City under New Mexico’s “anti-donation clause” over the City’s “donation” of $250,000 of our tax dollars to Planned Parenthood. You can read more about the case here.

“New Mexico’s constitution prevents politicians from using taxpayer funds like their own personal piggy banks,” says Daniel Suhr, managing attorney at the Liberty Justice Center. “Albuquerque’s grant to Planned Parenthood is pure politics, and the state constitution prevents that kind of abuse of taxpayer dollars.”  

“Taxpayers should not be compelled to subsidize Planned Parenthood or any other private group,” said Gessing, who is president of the free-market Rio Grande Foundation. “The anti-donation clause of New Mexico’s constitution is a bulwark for taxpayers against politically motivated earmarks just like this one.”  

Sadly, Albuquerque’s City Council seems to have ignored New Mexico law which clearly states that “Neither the state, nor any county, school district, or municipality … shall directly or indirectly lend or pledge its credit, or make any donation to or in aid of any person, association, or public or private corporation ….”

On this week’s interview Paul talks to his old friend Paul Teller. The two Paul’s go back 20 years when Teller was staff director at the Republican Study Caucus, a conservative coalition of House Republicans in Congress. They discuss how the conservative movement has evolved since then and some of the issues and battles that led us to the current moment.

Paul Teller is now Executive Director of Advancing American Freedom, a non-profit led by former VP Mike Pence. They discuss what the organization is doing to advance its goals which include “energy independence.” Teller is in New Mexico for a variety of meetings while Paul is hopeful for a visit/event with VP Pence.

After recording the show Paul Gessing took Paul Teller to one of New Mexico’s authentic restaurants.

Albuquerque residents who have been around more than a year or two probably remember the disastrous rollout of electric ART buses up and down Central Ave. As noted in numerous media reports:

The vehicles didn’t meet their promised battery charge, which meant they couldn’t manage a full day’s service. There were numerous durability and safety issues, including doors opening unexpectedly, malfunctioning brakes, faulty electric wiring, exposed wires, and overheating batteries.

On top of everything else, the charging system for the batteries was defective, and some buses simply could not be charged. Officials canceled the project within months, and the city ended up suing BYD.

Guess what? It’s happened again. This time, thankfully, we’re not talking about huge, expensive buses that are supposed to take people all over town. Instead, this electric vehicle fail involves the new “train” connecting the Zoo and Botanical Garden. Here’s the full story from KRQE Channel 13.

According to the story, “When they launched the shuttle during the River of Lights, it was hampered by electrical issues and needed a new charger.”

“If all goes well with the new charger, it should be within a matter of weeks. If that doesn’t work, we will actually bring the rep from the manufacturer out here to do some onsite diagnosis.”

Meanwhile Sen. Bill Soules (D-Las Cruces) wants to mandate that 75 percent of state vehicles be EV’s and US Senator Martin Heinrich successfully pushed for massive expansion of the Post Office fleet of electric vehicles.

NM’s legislative session begins at noon. We can talk broadly about what to look for in the upcoming session on a whole host of issues. MLG’s “more of the same” budget is built on extraordinary growth in oil production. Sadly it doesn’t seriously address tax reform.

Paul and Wally briefly discuss the latest in the gas stove “wars.”

New Mexico population loss is a long-term problem.

Left wing legislator introduces legislation to create high speed rail from Denver to Mexico (again). Paul has brand new Rail Runner data highlighting the taxpayer-financed train’s costly failure.

Albuquerque’s “free” bus fare program hasn’t moved the needle on bus ridership in the City either. 

Finally, Paul notes that the City’s community centers were closed not just for MLK Day, but also the Saturday and Sunday before. This highlights the City’s lack of concern for youth who have no inexpensive entertainment options when school is out and these centers are closed.

In a new policy brief which explores the shortage of medical providers in the State of New Mexico, the Rio Grande Foundation digs into an analysis of which areas of medical practice face the most acute shortages and compares New Mexico counties, New Mexico with its neighbors, and also looks at geographical trends regarding the availability of medical providers nationwide.

Forming part one of a two part series on the topic, the document titled, “The Existence and Extent of a Medical Provider Shortage in New Mexico” is an attempt to gain a foothold when it comes to the statistics behind the medical provider shortage.

Among the findings:

In a follow-up report Rio Grande Foundation will provide specific ideas on how policymakers, especially those here in New Mexico, can address the State’s medical provider shortage.

New Mexico Sen. Bill Soules, a Demorat from Las Cruces, plans to push for both a $500,000 study of high speed rail and to push his $1 billion plan to begin construction of the system. Supporters claim polls show support for such a proposal, but  as has been the case throughout the COVID 19 pandemic and beyond, mass transit has continued to lose ridership in New Mexico and around the nation.

The Rail Runner Express DID in fact see a slight rebound from the darkest days of COVID when the system was shut down for months at a time, but remains a far cry from recovering to pre-pandemic numbers and just over one-third of peak ridership back in 2010.

This, despite having been open for all of 2022 AND Gov. Lujan Grisham having reduced fares on the already-heavily-subsidized train by 75% to $2.75 cents for a round-trip to Santa Fe. This is shockingly low even by subsidized transit standards as two trips on the Washington, DC METRO subway system cost at least $4.00.