As we’ve noted repeatedly ONE of the problems with New Mexico’s gross receipts tax is the politically-motivated exemptions that are offered to well-connected interests. Spaceport America and Virgin Galactic are certainly among the most well-connected interests, so it is not surprising that they have been given favorable tax treatment by the Legislature.

Check out the 2019 ruling below:  But, as Kathleen Sloan writes in a new piece for the Sierra County Sun, Virgin Galactic has paid NO GRT on ticket sales “totaling $45 million, it would produce a windfall of $3.123 million dollars for the state and county.” To put it plainly, tickets are not the same as “launching, operating, or recovering space vehicles or payloads.”

Not only does the Spaceport benefit from a GRT exemption it also benefits from a very generous interpretation of that exemption.

As we’ve already noted, the main problem with Gov. Lujan Grisham’s plan to slightly reduce GRT rates by .25% is the fact that the real problem with the tax is taxation of services as business inputs.

Also, with what is expected to be a $2 billion surplus, the Gov. wants to return $145 million. That’s about 7 percent of the available surplus. And, while the State’s GRT rate would be reduced from 5.125% to 4.875%.

In every area of the State we’ve seen tax rates rise dramatically over the years. The chart below reflects Albuquerque’s rapid climb over the years to the current gross receipts tax rate of 7.875 percent. Rio Rancho’s rate is now 7.6875%. You can find a full list of local GRT rates with rates ranging to over 9%. Relative to Albuquerque’s overall GRT rate, a .25% cut is a 3.17% reduction in the GRT.

In addition to addressing taxes on business inputs and services, the Legislature needs to address local taxation authority and constrain the ability of local governments to raise rates.

On this week’s podcast, Paul sits down with William Perry Pendley. Perry worked in the Department of Interior under Ronald Reagan and then headed up the efforts of the Mountain States Legal Foundation, a non-profit law firm that defends property rights in the American West. Pendley was appointed to deputy director by President Trump and then became acting director of the Bureau of Land Management in 2019.

Perry and Paul discuss the BLM and its importance in New Mexico, how political shifts have drastic impacts on land management techniques, and the radical politics of people in high places at BLM under the Biden Administration.

Enjoy this timely and important conversation!

The moment Gov. Lujan Grisham hopped on a plane (presumably) to fly over to Scotland, we at the Rio Grande Foundation filed a public records request to find out exactly what carbon emitting form of transportation she used to get over there to hector us on OUR CO2 emissions all while her and several staffers emit massive amounts of carbon on their trip.

A) She (and staff) flew over to Scotland in coach;

B) She (and staff) flew over in First Class;

C) They all took a private jet (as did hundreds of other attendees).

So, we filed a public records request to find out. You can see the response to that request below. Long story, short: the taxpayers didn’t pay for the trip, so, they don’t have to provide the information. Here is the letter responding to our records request.

We’re assuming that a well-funded radical environmental group paid for the trip and will be filing further requests to that effect. Seems like our Gov.’s travel arrangements costing thousands of dollars to attend a foreign conference should be a public record, no? Will it be reported in her campaign contribution instead?

With the Legislature expected to convene in January with up to $2 billion in “new money” (basically, surplus revenues generated primarily from oil and gas, Gov. Lujan Grisham has proposed a small reduction in the gross receipts tax of .25 percentage points. 

According to the Gov. this tax cut will reduce taxes by $145 million annually. That’s obviously a tiny fraction of the revenues that the Senate Finance Committee Chair (a Democrat) says is “more money than they know what to do with.”

Of course, as the Rio Grande Foundation has said for years, the REAL problem with New Mexico’s gross receipts tax is “pyramiding,” especially taxes paid on services as business inputs. Powerful Democrat Rep. Patty Lundstrom told attendees of the New Mexico Oil and Gas Association (NMOGA) conference that this needed to be addressed by the Legislature as the primary use of the surplus.

The essential difference between a “healthy” sales tax and New Mexico’s awful gross receipts tax is seen in the graphic below, but more fundamentally, the GRT leads to all kinds of special interest favoritism in the Legislature and it disproportionately harms small businesses:

According to the 2021 edition of the Economic Freedom Index of North America report from the free market Canadian think tank Fraser Institute, New Mexico, in calendar year 2019 (the first year of the Lujan Grisham Administration), slid from 42nd (in last year’s report which used data from the final year of the Martinez Adm.) down to 46th.

While New Mexico has long lagged its neighbors and most of the nation in economic freedom, the 2019 legislative session saw a massive uptick in government spending, tax hikes, newly-imposed regulations, and numerous other policies that make New Mexico less business-friendly. All of New Mexico’s neighbors are among the most economically-free states in the nation.

Not surprisingly, most economically-free half of jurisdictions have higher incomes than do the least economically-free jurisdictions like New Mexico. It is not surprising that New Mexico is among the most impoverished states in the nation.

New Hampshire, Tennessee, Florida, and Texas, were among the MOST economically-free states in the latest report (full rankings below) while California and New York were among the few states that trailed New Mexico. Click on either image in this post for the FULL report:

In testimony before an interim legislative committee yesterday Spaceport America yet AGAIN made a plea for more tax money (an additional infusion of $2 million) to keep the facility afloat. Unfortunately, it is hard to verify exactly what Virgin Galactic is currently paying to use the facility.

At the hearing and in media reports, the facility’s executive director claims that Virgin Galactic is paying nearly $6 million annually to the State of New Mexico.

But, according to a modified lease agreement signed on December 21, 2018, Virgin Galactic is paying an annual lease of just $2.3 million annually (details are spelled out in the link above). BUT, an item in the lease states, “In the event VG conducts no revenue-generating spaceflights for a period of three (3) or more consecutive calendar months, VG shall pay NMSA a user fee of fifty thousand dollars ($50,000) per month” (that’s just $600,000 annually).

Since Virgin Galactic has NEVER taken a paying customer to space, it would seem that they are paying rent of just $600,000 annually.

There’s a gaping difference between $6 million and $2.3 million or $600K). Where is the extra money supposed to be coming from? And what evidence do we have that ANY money is actually coming in?

Sometimes a few words in a cartoon are as effective (or more) than thousands of words. This Trever cartoon from the Sunday Albuquerque Journal really says what we’ve been writing about and discussing for months.

Over the weekend Colorado Gov. Jared Polis made news (at least in New Mexico) when he said that he would NOT reimpose a statewide mask mandate citing New Mexico’s high COVID infection rate (despite its mandate) as a reason for not doing it.

What was lost in the coverage is the fact that Gov. Polis has ALSO made “monclonal antibody” treatment a top priority.

Antibody treatment early in the disease’s course can reduce the odds of hospitalization by about 70%, but vaccines lower the odds by about 90%. Still, if a person didn’t get vaccinated, antibody treatment is their best option, Polis said.

“We need every bed that we have in our hospitals,” he said during a news briefing.

What about monoclonal antibody treatment in New Mexico? We searched the Gov.’s website and found no statements about it in recent months. The Albuquerque Journal’s most recent article was from January of 2021. There IS information available from the Department of Health which includes information on infusion centers and who qualifies for the treatment.

Recently, global leaders gathered in Glasgow for the COP26 climate summit. It was here that nations, both large and small, made commitments to combat and slow the effects of climate change. It should concern us that many of the proposals and agreements target some of our most critically important industries, including oil and gas, putting jobs, affordable fuels and energy and our economy at risk.

The United States has tried this tactic and it consistently fails. Most recently, President Biden agreed to and implemented sweeping government regulations related to the environment without fully understanding the impacts upon communities in energy states like New Mexico.

Take, for example, the recent ban on oil and natural gas leasing on public lands and in offshore waters. Despite a groundswell of opposition from states who said the ban could cause significant community harm and economic loss, the Department of Interior pressed forward with its leasing moratorium, seemingly without even considering its consequences. 2021 will mark the first year in decades no onshore federal leasing auctions will have occurred across the US.

Federal lands currently compose nearly 35% of New Mexico’s total area, and a federal oil and gas leasing ban would immediately threaten the welfare and future of our state. We would lose critical jobs at a time when the economy is reeling, and our unemployment rate remains one of the highest in the nation. At the same time, ban would eliminate critical tax revenues that pay for schools, hospitals, roads and other infrastructure, keeping the government from dipping into the pockets of taxpayers.

Fortunately, this hasty decision was overturned in court after 12 states sued the Department of Interior. But it still represents a dangerous trend we see on both sides of the aisle—government representatives putting politics and big government over the best interests of our people—and it is unacceptable.

Moreover, sweeping government policies such as a leasing ban rarely work as intended. Instead, they hamstring businesses and stifle innovation, hurt our middle- and lower-income citizens and communities and always have unintended consequences. And it is important to keep this in mind as we consider ways to address climate change, especially for states like New Mexico.

It should be clear to U.S. officials that working together with energy companies, not actively against, will be the best path to a cleaner, more sustainable future. Already, energy companies are heavily investing in innovative solutions, like carbon capture and storage, to reduce emissions while protecting jobs and revenues and keeping energy costs low. We should continue encouraging this type of collaboration and innovation between government and private industry to effectively balance economic growth with climate goals.

Angelo Artuso is a pro-liberty attorney based in Albuquerque. He is currently representing a group of Los Alamos National Lab Employees In a Federal Lawsuit Over COVID-19 mandates at the Lab on the basis of religious discrimination.

Considering that New Mexico’s Gov. and Legislature seem to adopt whatever the latest leftist California is, it is always important to keep an eye on what happens on the “left coast.”

This article from Forbes gives me hope that New Mexico may not be crazy enough to follow through with the push to “unreliables” like wind and solar.

Apparently in California the idea is to just “deem” natural gas a “zero carbon” fuel and move on. As we noted a few months ago California recently built several new natural gas plants in an effort to shore up the reliability of their electrical grid.

While natural gas is certainly a low-carbon fuel, unlike nuclear it is NOT zero-carbon. But, perhaps this is a sign that when grid reliability and the “green” agenda butt up against each other even the most “progressive” politician will decide to keep the lights on.

On this week’s podcast, Paul and Wally discuss the spread of COVID19 in New Mexico and the high levels of infections occurring in New Mexico. They also discuss the differing media reaction to Florida and states in the Mountain West.

NM Film workers place blame for issues on set w/ out-of-state-leaders. There are also workplace issues with at least this movie. How does this square with New Mexico’s highly-subsidized film industry? 

Biden’s vaccine mandate for businesses w/ 100 or more employees officially put forth and immediately gets placed on hold by 5^th district judge. The Administration is still pushing businesses to comply.

Biden gets help from some House Republicans to pass a $1.2 trillion infrastructure bill. Paul and Wally discuss some details on the bill and the poor politics for the GOP.

Gavin Newsome has declared natural gas “zero carbon.” 

In this supplemental interview Paul does a short interview with Zachary Taylor, director of the American Recyclable Plastic Bag Alliance, about the changes the Keller Administration has changed its plastic bag ban. and why they are economically and environmentally harmful.

Throughout the COVID 19 situation New Mexico’s economy has generally lagged behind the rest of the nation. A new report from Wallethub shines some light on the latest data which places New Mexico 48th in terms of its recovery since the start of COVID. Things are not improving much as we dropped to 49th week-to-week.

Here is the story from KRQE. Charts below are directly from Wallethub.

Nobody has fought New Mexico’s wasteful film subsidy program more vociferously and for longer than the Rio Grande Foundation. That said, we were shocked and horrified at the deadly shooting that recently took place on the set of a film outside of Santa Fe.

There are still a lot of details to uncover, but according to a recent Albuquerque Journal article which details some of the issues on-set, there were some serious well-known problems even before the shooting.

“From not getting paid on time – some waited nearly seven weeks for their paychecks – to the day-to-day schedules never finding a routine.” This is of course an industry that gets reimbursed for 25 to 35% of its expenses in New Mexico and yet they can’t pay their workers on time?

“The production refused to pay for hotels for crew members – most of whom drove from nearly an hour away from the set – after working long shifts.” Again, this sounds unsafe and is hard to square with the subsidies given.

“Two ‘Rust’ crew members laid the blame for some of the issues in the production on certain out-of-state leaders.”

Is an industry that fails to pay its workers basic benefits and brings in leadership from out of state (not just talent) really a sensible recipient of massive amounts of New Mexico tax dollars?

On this week’s interview, Paul talks to Farmington Mayor Nate Duckett. Duckett was first elected Mayor of the Four Corners’ largest City in 2018. Mayor Duckett and Paul discuss the economic challenges facing Farmington and how recent trends have led to a “hot” housing market locally AND an improved natural gas industry. They also discuss challenges faced due to the elimination of the region’s two coal-fired power plants. Duckett is a proponent of expanding outdoor recreation in his area of the State.

Imagine my non-surprise when I clicked on the latest national ranking of public school systems (this one from Forbes) and found that New Mexico ranked 51st. Read their comments below and you further grasp the scope of the problem.

So, while we are pleased that voters saw fit to rid Albuquerque Public Schools of three union-backed members (and a few other districts around the State rejected the unions), it is going to take A LOT more reform to move New Mexico schools in the right direction. Specifically, the Legislature in Santa Fe remains in thrall to the unions as does Gov. Lujan Grisham.

To really move New Mexico’s education system forward (along with the rest of the economy) it is going to take multiple electoral cycles like this one in which candidates beholden to the unions and their money are rejected in favor of reformers and choice advocates.

Normally Election Day is the last big political event on the calendar. The defeated lick their wounds and the victors prepare to take office at the start of the New Year. But 2021 is no ordinary year, it is a redistricting year.

That means that (likely) on December 6, the New Mexico Legislature will be meeting to discuss electoral boundaries for Congress, the Legislature, and others bodies. It’s a big job and it can get VERY heated, though with New Mexico Democrats controlling ALL aspects of the process it should be easier (if they don’t overreach by drawing some truly partisan districts).

BUT, we are hearing that some non-redistricting bills could be on the agenda including a bill that failed last session which would mandate “clean” fuels be added to your gasoline. As Rep. Larry Scott writes in this opinion piece, this WILL increase gas prices by at least 17.5 cents per gallon as a starting point.

We’ll be in Santa Fe to fight this and there couldn’t be a worse time for government to FURTHER boost the cost of living.

RGF both assisted in the drafting and signed this letter with regard to the National School Boards Association calling parents “domestic terrorists” for attending and being active at school board meetings. Check it out below by clicking on the image below.

46 lawmakers, school board members, and orgs raise concern over anti-parent rhetoric

While RGF is pleased by Albuquerque voters’ overwhelming rejection of the proposal to build a taxpayer-financed soccer stadium near downtown, we recognized all along that the Team was not going to give up their quest for a new stadium.

Channel 7 KOAT laid out some ideas including potential stadium locations on tribal lands. RGF expects that, given the massive surpluses available to the Legislature and Gov. Lujan Grisham, we could see significant state dollars used to fund a stadium even if Albuquerque voters have rejected the concept.

If you’d like to listen to Rio Grande Foundation president Paul Gessing discuss the 2021 election results (and numerous other issues later on), check out his recent interview with Jim Williams of KLYT 88.3FM on ABQ Connect. Paul is a regular guest on Jim’s show, but he has regular guests on a variety of local issues of interest.

In terms of local election results, it was obviously disappointing to see Mayor Keller who has done such a poor job managing public safety and the homelessness problem win so handily in Albuquerque. But, the taxpayer-financed United Stadium supported by Keller (and opposed by the Rio Grande Foundation) lost 2-1.

In terms of City Council, the West Side saw the ouster of two incumbents in favor of former Councilor Dan Lewis and newcomer Louis Sanchez.

Two other races are heading to a runoff with the requisite early voting and an “election day” of December 7. Those races include conservative leaning candidates Lori Robertson (District 7 in the mid-northeast heights) and Rene Grout (District 9 in the northeast/southeast heights).

APS school board also saw seats shift from union-backed candidates to more reform-minded candidates including Courtney Jackson, Crystal Tapia-Romero, and Danielle Gonzales .

Unfortunately the reform wave did not reach Las Cruces city council and the Foundation’s own Patrick Brenner lost in his bid for school board in Rio Rancho.

Nationally-speaking, Virginia’s governor’s race was won by Republican Glenn Youngkin in large part because of his pro-education reform, anti-CRT stances.

In New Jersey in what could have been an unprecedented upset, the Republican fell just-short.

Overall, it was a good night for conservatives and those that believe parents, not the unions and bureaucrats should control education.

The following map is from MultiState. It shows that New Mexico is one of JUST 5 states in the US with a universal indoor mask mandate (Louisiana has dropped their mask mandate):

As KOAT Channel 7 notes in this news story, despite its mask policy and even high vaccination rates, New Mexico is seeing an uptick in COVID 19 cases and hospitalizations.

Recently RGF raised the question of whether Gov. Lujan Grisham will mandate vaccines for attendees of Lobo/Aggie basketball games as she did for the New Mexico State Fair.

While we DO NOT support such a mandate and we oppose them on principle, it DOES strike us as HIGHLY dubious, especially when New Mexico’s COVID hospitalizations are considered.

As you can see below, New Mexico is seeing an increase in COVID cases and hospitalizations. Back on September 9, 2021, the first weekday of the New Mexico State Fair, New Mexico had 370 COVID hospitalizations. As of Nov. 1, 2021 (the latest date available as of this writing)  New Mexico has 368 hospitalizations. In other words, the COVID situation is as bad now as it was when the Fair began.

The Lobos season starts on November 5. Will COVID cases suddenly drop in New Mexico or will MLG’s hypocrisy towards Fair attendees and participants be on full display? Of course, the Fair is held outside and in large barns. The Pit crowd is very tightly packed.