On this week’s podcast, Paul discusses the PNM/Avangrid merger with RGF energy and utility analyst Kenneth Costello. While RGF doesn’t have a position one way or the other on the merger, it does care deeply about New Mexico utility customers and the potential for power disruptions and rate increases. This is one of the most pressing issues facing New Mexico policymakers this summer.

On this week’s discussion: Richard Branson makes it to “space.” Does this mean the Spaceport was a good idea? What’s next for Spaceport America?

New COVID rules for school children have been handed down by the CDC. What do they mean for kids who will be starting school in a month?

Sen. Heinrich is coming for your gas stove/heater/water heater/ and gasoline car.

RGF in National Review Online.

Socialism is rising among NM’s leadership.

The Kids County Report is reasonable. The partisan spin is not.

Talk is again heating up in Santa Fe over potential reform of New Mexico’s broken gross receipts tax. The Albuquerque Journal has a write-up in today’s paper. For it’s entire history, the RGF has focused attention on what we’ve called “the original sin” of New Mexico tax policy. Here is one of many reports we’ve written on the issue.

As the Journal correctly notes, over the years GRT rates have risen while in some ways the “base” has been narrowed (with fewer items being taxed).

Unfortunately, with “progressives” in charge, the main focus of “reform” (if indeed Democrats finally decide to address the GRT) will likely be on pushing more of the burden onto high income New Mexicans rather than addressing the actual harm of the tax.

Here are a few basic principles to consider in the GRT reform discussion:

1. Any reform must address the harm done by taxing business inputs and services (bookkeeping, accounting, web management, doctors, and many more). Any “reform” that doesn’t address most or all of these isn’t really reform (See HB 6 in 2019). The “base” was also broadened in 2019 with taxes on Los Alamos National Lab and certain health care items imposed as well as taxes on certain online sales;
2. New Mexico is swimming in tax revenues and has raised taxes multiple times in recent years (also SB 317). The bill should be revenue-neutral or even a tax cut regardless of whether the GRT’s “regressive” nature is addressed or not;
3. Ideally the Legislature would put some kind of protections into the Tax Code to both make it more difficult for local governments to raise rates AND for the Legislature to provide one-off tax breaks for special industries. That may be a challenge, but it is worth considering so we don’t wind up in this situation again.

via GIPHY

The folks at PragerU make all kinds of informational videos on a variety of policy topics.

The video below caught our attention because at the Rio Grande Foundation we have seen the explosion of homelessness in Albuquerque, especially near our downtown offices. We have our thoughts on what to do about the problem and this short video not only reflects many of those thoughts, it adds data and experience to the mix to make a convincing case for what Albuquerque’s current or future mayor could do to address the issue.

One thing that MUST be part of any discussion of homelessness is property rights, not only for private owners, but also for the public’s use of taxpayer-owned properties.

Most New Mexicans are well aware that oil and gas generates close to 40% of the New Mexico budget in any given year. Of course, the industry is highly competitive and thrives on the types of efficiency and cost-cutting inherent in any free market enterprise.

Among other things that means replacing workers with new technologies. This is good economics as the remaining workers tend to be better-trained and higher paid. It also means less “grunt” work and improved safety as well as lower costs.

But good economics is not good politics as oil and gas regions of New Mexico are badly-outnumbered politically in New Mexico. And, we know that once that oil and gas money hits government it is not only misused, but the beneficiaries tend to forget its provenance.

I agree with you although not for the same reasons. O&G does generate 40% of NM’s budget, but the politicians in NM do an awful job w/ that money. NM’s O&G industry WOULD do itself a favor if it hired more people b/c they could compete electorally w/ big “blue” cities.

— Paul Gessing (@pgessing) July 9, 2021

The following appeared on July 9, 2021 at National Review’s Capital Matters:

On June 15, 2021, U.S. District Court Judge Terry Doughty issued a preliminary injunction halting the Biden administration’s moratorium on new oil and gas permits on federal lands and in federally controlled offshore areas in the Gulf of Mexico. The lawsuit was filed by 14 states that were set to lose out on significant oil and gas development if the moratorium remained in place indefinitely.

Ironically, of all the states impacted by Biden’s moratorium, increasingly deep blue New Mexico had the most to lose. According to an analysis from the American Petroleum Institute, New Mexico would be expected to lose over 62,000 jobs and $1.1 billion in revenue from the moratorium. Ranking third among all states in oil production and a leader in natural-gas production as well, New Mexico would have lost nearly half of total production in both had the moratorium stuck.

Wyoming, the next-most-affected  state would have lost just a bit over half as much revenue ($641 million) as New Mexico. And, with an annual General Fund budget of $7.4 billion, that is a lot of revenue to make up. Unfortunately, in this world of “red” and “blue” states, self-interest was not enough to get New Mexico Attorney General Hector Balderas to join the lawsuit.

So, no thanks to any of our own elected officials (or former New Mexico Congresswoman, now Interior Secretary, Deb Haaland), New Mexico likely just dodged a dagger aimed straight at the heart of the state’s economy. Better still, a combination of market forces and geological discoveries means that New Mexico’s oil and gas industries (like America’s) could be heading into an era of unprecedented prosperity, if  the political forces arrayed against them can be held at bay.

Prior to the COVID-19 pandemic, oil production in New Mexico’s Permian Basin (which it shares with Texas) had been growing rapidly. As recently as 2010 New Mexico was the 7th-leading oil-producing state in the nation with 65 million barrels a year. By 2020 (despite the pandemic), annual production had risen to 379 million barrels.  

Now, it appears that New Mexico is on the verge of surpassing North Dakota to become the nation’s 2nd-largest crude-oil producer. March 2021 data (the most recently available) from the Energy Information Administration (EIA) show New Mexico producing 1.16 million barrels of oil per day compared to 1.11 million in North Dakota.

Like most of New Mexico’s post-2010 surge, the state’s continued growth is being driven by new discoveries that are accessible through new technologies; notably, “fracking.” Furthermore, as the Permian Basin  has already been producing large quantities of oil and natural gas for decades, the infrastructure to access and move the product is already in place.

As if all of these convergent factors acting in support of New Mexico’s oil and gas industry weren’t enough, while motorists may not be thrilled, prices at the pump clearly show that the industry is doing quite well in the wake of COVID-19. If analysts from Bank of America are right, the boom is just getting started. They predict that by 2022 crude-oil prices could hit $100 per barrel. This means even more jobs and tax revenues flowing into New Mexico and it means reliable (if not necessarily cheap) energy for Americans.

Ironically, despite all of this good economic news for the state, New Mexico’s history of rule by left-wing Democrats has left it in pretty bad shape, thanks in no small part to the intense lockdowns during the pandemic. Oil and gas and the money it brings may help, but if the state’s political leadership doesn’t do a better job managing the boom, the next bust could be harder to manage.

According to the Bureau of Labor Statistics data for May, New Mexico’s unemployment rate is 2nd-highest in the nation at 8 percent. Worse, due to the state’s poor performance on a variety of education, economic, and crime rankings, New Mexico was recently ranked as the worst state in the U.S. in which to live. Agree with the data or not, the Land of Enchantment has some deep-seated and serious issues to deal with.

And, while most problems are made easier with money as opposed to without it, a system where politicians have plenty of resources to spend regardless of the success or failure of their economic policies is not a great system. In fact, it is a system that has fueled awful government in places like Saudi Arabia and Venezuela (to name just two poorly governed petro-states).

Will things be different this time for poor New Mexico? The political and economic situation are extremely volatile and it is hard to tell. With energy largesse flowing in, the Land of Enchantment  could finally add a strong economy  to its name. Political will has always been the missing ingredient.

PAUL GESSING is president of New Mexico’s Rio Grande Foundation.

It used to be (a decade ago) that if you called an American politician a “socialist” you’d get pushback. That is changing with the rise of self-avowed socialists AOC and Bernie Sanders in Congress, but in general, the left wing in is far more willing to embrace the term than it was just a short time ago.

Right here in New Mexico, Sen. Jerry Ortiz y Pino has long been the standard bearer for the far left in New Mexico’s Legislature having taken office in 2005. And, while we disagree on most major issues, he’s personally friendlier than most newly-elected politicians of the left and he’s actually sponsored solid “school choice” legislation in the distant past (of course the unions put a stop to that).

While not ALL New Mexico “progressives” embrace the label, there is NO doubt that the “socialist” wing of the party is growing in strength and is willing to publicly embrace the moniker as does Sen. Ortiz y Pino below. And, if you click the link and read the article referenced below it says nothing new. It tacitly and dishonestly embraces Western European capitalist nations such as Sweden with its reasonably high level of economic freedom while disavowing the USSR, Venezuela, and other socialist/communist totalitarian disasters.

On this week’s podcast interview Paul sits down with Carri Phillis.

Carri is a local nightclub owner and entrepreneur. She has been involved in libertarian-leaning politics in New Mexico for over a decade, but the primary topic of conversation is the last 15 months of Gov. Lujan Grisham’s COVID policies and Carri’s involvement with the Gov.’s Economic Recovery Council.

Carri shares her own experience as a business owner, her personal experiences as a mother, and the work of the Council. You don’t want to miss this discussion!

In Daniel Chacón’s recent article in the Santa Fe New Mexian, he alleges that members of Governor Michelle Luan Grisham’s administration have private messaging apps on their government-issued cellphones.

I’ll call your bet, and raise you: it’s not just the staff of the executive branch, it’s dozens of state agencies. They are using encrypted messaging platforms: and they’re also enforcing the automatic deletion of messages after 24 hours.

I grew suspicious in the aftermath of the Searchlight New Mexico report on the Children Youth and Families Department (CYFD). The report was solid, but left some loose ends that needed tidying up. Specifically, I had questions about the official Document Retention Guidance and how it was developed.

The document itself is disturbing. The bottom line is that the administration allows any employee to “delete any text message that is a routine communication and is not ‘required to control, support or to document the operations of government.’”

This record deletion allowance is antithetical to the principles of transparent and open government. Aren’t all routine communications necessary to document the operations of government?

Several official public records requests were submitted to a number of state agencies to ascertain the origins of this document. Eventually, we came across another interesting piece of documentation, from New Mexico’s Department of Information Technology (DoIT). This is the agency responsible for deployment of resources like Microsoft Office and the corresponding productivity suite.

This email was a directive coming from the executive branch. Certain configuration changes were being implemented that would affect the Teams chat functionality. Microsoft Teams is a business communication platform that allows employees to instant message each other. Teams is currently utilized by over a dozen state agencies, including CYFD and DoIT.

New configuration changes included a policy that all Teams chat messages would be deleted after 24 hours.

Chacón reports that Nora Meyers Sackett said “only one of the staffers has sent a message on such an app”. I can’t contest the validity of this statement, pertaining explicitly to Signal and Whatsapp. However, I can say that numerous state agencies are using Microsoft Teams, which is essentially just another messaging app by a different name.

Sackett and others routinely delete text messages. I requested all the text messages that Sackett sent or received during the month of April 2021. The official response, from an attorney with the governor’s office: “We have conducted a search of records maintained or held by the Office of the Governor and we have located no records responsive to your request.”

By the time I submitted my public records request the records were already deleted. Since then, I have been submitting new records requests daily, requesting all the text messages sent by Sackett for the previous 24 hour period.

Daniel, it’s worse than either of us could have imagined. State agencies are still using encrypted messaging platforms and the administration is encouraging periodic destruction of documents by redefining records classifications and subjecting these newly classified records to document retention periods that facilitate their automated deletion with alacrity.

The chart below is directly from the Voices for Children website. New Mexico’s overall performance has been remarkably consistent over the past decade with NM bouncing from an overall ranking of 49th and 50th. In 2020 New Mexico remained stuck at 50th and in 2021 “rallied” to 49th. 

Here’s the thing. In 2019 during the last year of the Martinez Administration James Jimenez of Voices said, “Fundamentally, the story the data tells is there was a real failure by the Martinez administration to invest in youth, children and families in a way that made much of a difference in terms of these kinds of rankings.”

In 2021 as the State moved up a single spot (but with Gov. Lujan Grisham in charge), Emily Wildau of Voices wrote, “Pre-pandemic improvement in child well-being a glimpse at what investments can do.”

Clearly, New Mexico’s actual performance on Kids Count is quite poor (and the Gov.’s pandemic policies will likely have significant negative impacts on our children). That transcends who is in the Governor’s office. As the Rio Grande Foundation has noted the Legislature is the body that actually makes the laws. Perhaps more attention should be focused on THEM when New Mexico’s poor results are considered.

In a recent post at Errors of Enchantment Paul notes that several data and recent polling highlight and explain New Mexico’s poor governance.

NM is among states w/ largest outflow from gov’t schools/to home school. Other states are racing ahead on school reform which NM generally stands pat.

SCOTUS rules on donor privacy. 

Can ABQ be a job leader?

NM/federal stimulus funding both sides of the jobs equation.

Donald Rumsfeld was a statesman with a wide and varied career and he was a supporter of the Foundation. Paul acknowledges his passing in Taos, NM.

Paul interviews Doug Messier of the blog Parabolic Arc (which tracks the private space industry) about Richard Branson’s plans to head to “space” out of Spaceport New Mexico on July 11th.

It is well-known that a Republican governed states have by and large canceled the $300 “bonus” unemployment benefit being offered by the Biden Administration. Better still for those states, data shows that they are seeing workers return faster than those “blue” states like New Mexico which have kept the $300 payments in place and thus are incentivizing workers to stay home.

Now, Gov. Lujan Grisham has announced a NEW program using federal “stimulus” funds to incentivize people (to the tune of $1,000) to get back into the workforce. It’s a classic example of inherently conflicting policies, both of which are being funded by your taxes and/or debt.

It all reminds me of my reading of the New Deal. Historian and prior RGF speaker Amity Shlaes has pointed out in her writing how FDR’s (often conflicting) policies prolonged the Great Depression.  

The Rio Grande Foundation takes donor privacy VERY seriously. We fought tooth and nail against Secretary of State Maggie Toulouse Oliver’s push to publicize donations to 501c3 organizations like RGF open to the public. We also litigated against the City of Santa Fe over donor privacy issues regarding work we did to defeat the soda tax a few years ago.

And, we filed an ‘amicus’ or friend of the court brief in support of donor privacy(read it here) in the Americans for Prosperity v. California case just decided by the Supreme Court. The 6-3 decision strikes a blow for privacy and free speech for the Rio Grande Foundation, our supporters, and millions of Americans.

The following chart recently ran in the Albuquerque Journal. Click to read the article. The article detailed Albuquerque Economic Development (AED)’s latest plans to improve the local economy. At the Rio Grande Foundation, we have been at it for 15 years and say with experience that New Mexico’s political leadership and that of many in the State (elected and unelected) towards economic growth are going to be serious obstacles.

Here’s our “hot takes.”:

1. Locally, crime MUST be addressed head-on. This is primarily the job of the Mayor. The current Mayor is failing.
2. Albuquerque (like the rest of the State) needs a Legislature that is willing to embrace a pro-business, pro-economic freedom mindset. We can’t wait for the next check from Washington. Until change happens in Santa Fe, there is not much the City or AED can do (outside of reducing crime) to change the City’s trajectory.
3. The group is definitely right to focus on education reform and the Rio Grande Foundation has done this recently. But, more money isn’t the solution. And, again, Santa Fe MUST be part of the solution.

On this week’s episode, Paul discusses Mississippi’s recent educational successes with Dr. Jameson Taylor of the Mississippi Center for Public Policy, a free-market think tank based there.

Mississippi and New Mexico so often struggle at the very bottom of the “good” lists and rise to the top of the bad lists, but as Paul noted recently, Mississippi has seen some recent improvements in the area of 4th grade reading on the “gold standard” NAEP test.

So, what did Mississippi do to improve educational outcomes? Ironically, for many New Mexicans, this will be a case of “Back to the Future” as Mississippi’s playbook looks a lot like that of former Gov. Susana Martinez.   

You don’t want to miss this conversation!

We at the Rio Grande Foundation are saddened to learn of the passing of American statesman Donald Rumsfeld. On June 30, 2021, we lost a dedicated patriot. He was surrounded by family in his beloved Taos, New Mexico.

We are deeply saddened by his loss. A lifelong patriotic American statesman and our fellow New Mexican, Mr. Rumsfeld embodied the characteristics of liberty that we live by every day. He was an avid supporter of the Foundation and our friend.

Said Rio Grande Foundation President Paul Gessing. “We mourn his loss but let us also celebrate his many gifts and continue to build on them. We will continue his mission for freedom so that every person has the best chance to thrive in life.”

He will be missed.

According to a report from McKinsey & Company between school closures and reduced instructional time, the average U.S. child has lost the equivalent of five to nine months of learning during the pandemic. New Mexico students have lost more than most.

With government school systems in SO MANY states failing their students over the past year, legislatures and other elected officials are rushing to offer choices and opportunities to students in their jurisdictions.

You can see a full list from EdChoice here. Jason Bedrick of EdChoice writes, “In total, 14 states have enacted 18 new or expanded educational choice policies so far this year. In addition to the above, we are expecting further new or expanded choice policies in at least six states.” You can see which states are enacting reforms below.

Unfortunately, New Mexico’s union-beholden political leadership has NOT enacted any reforms.

Some of the most exciting reforms are in the following five states which have enacted brand new education choice programs:

• Arkansas (SB 680): New tax-credit scholarship for students from low-income families (up to 200 percent of the federal poverty line) who are switching out of public school or entering kindergarten or first grade.
• Indiana (HEA 1001): New ESA for students with special needs from families earning up to 555 percent of the federal poverty line.
• Kentucky (HB 563): New tax-credit ESA for students from low- and middle-income families (up to about 324 percent of the federal poverty line).
• Missouri (HB 349): New tax-credit ESA for students from low- and middle-income families (up to about 370 percent of the federal poverty line) who are switching out of public school or entering kindergarten or first grade. (Note: this bill passed both legislative chambers but is still pending the governor’s signature.)
• West Virginia (HB 2013): New ESA for all students switching out of public school or entering kindergarten or first grade.

On this week’s podcast conversation, Paul and Wally discuss reports that the government schools saw a big drop in enrollment due to homeschooling during the pandemic. 

The annual KIDS COUNT report from Annie E. Casey/Voices for Children has been released. NM goes from 50th to 49th. MLG is happy about this but this is 2019 data. We’ll truly see the impact of COVID 19 (possibly) next year.

It was a big week for NM’s subsidized film industry as new taxpayer-funded facilities NBC Universal in Albuquerque AND Totah Theater in Farmington opened. The theater, which was acquired by San Juan County last year and underwent a $1 million renovation over the past several months. The facility will be used for film screenings and live entertainment events, but its upper floors will be available to film and TV industry representatives to rent for office space.

At the NBC Universal grand opening, fully vaccinated Gov. MLG wore a mask outdoors. At a Mora County Democrat fundraising event (posted on her Twitter account) the Gov. was the ONLY one wearing a mask at yet another outdoor event.

Paul notes that criticizing the vaccinated Gov. for wearing a mask at public events REALLY drives the Twitter liberals crazy. He suggests following both his personal and the RGF Twitter accounts.

NM’s awful unemployment rate is the 2nd-highest in the country.

Paul and Wally discuss Santa Fe’s fake “Universal Basic Income” experiment.

NM’s Department of Information Technology doesn’t have a record retention policy.

US Census data offer clues on redistricting.

Bank of America forecasts $100/barrel oil during 2022. 

This post will be somewhat different insofar as it connects various data points, including polling data, to make conclusions about the challenges facing New Mexico:

1. According to Wallethub New Mexico is the “worst state to live in” in the entire country. Disagree with their metrics if you will (we think they are reasonable), but notably the liberal “Voices for Children’s” annual Kids Count report arrives at a similar conclusion as do many other national reports which more closely align with Rio Grande Foundation’s outlook.
2. According to a poll from KOB TV Channel 4, 49% of New Mexican’s believe that Gov. MLG’s COVID policies were “just right” and another 16% said the restrictions were “too lenient.” RGF recently addressed the Gov.’s COVID response.
3. COVID responses have been highly partisan as a separate national poll finds that 57% of Republicans and just 4% of Democrats “believe the pandemic is over.”
4. New Mexico has the 2nd-highest unemployment rate in the nation and Gov. MLG has stated that she will NOT turn down Biden’s $300 “supplemental” unemployment payments. A new report shows that states that HAVE foregone those benefits have seen faster declines in unemployment than those that have kept them. Notably, as the unemployment data show, those states with Republican governors already had lower unemployment rates than New Mexico and other Democrat-governed states.

It would seem (not shocking to many) that New Mexico’s fundamental problem is that it’s elected leaders make bad policy decisions and that voters’ ignorance only reinforces those views. Wallethub’s map is below:

Recent reports have noted that New Mexico’s already-falling government school student population fell even more quickly thanks to the uptick in home schooling during the pandemic. The author’s own family chose this option and were clearly not alone.

As the map below shows, New Mexico is among the states with the largest outflow of students from government schools. You can read the full article from The 74 here This isn’t surprising given New Mexico’s relative large loss of classroom learning, but the uptick in home-schooling doesn’t necessarily correlate with most locked down states. It IS certainly noteworthy that some of the least locked down states like South Dakota and Utah saw the least uptick in home schooling.

Of course, Albuquerque Public Schools is concerned about losing as much as $53 million because of the decline in enrollment. What is left unsaid is that even as enrollment declines, already high APS’s per-pupil spending figure will likely skyrocket in the next few years.

This article appeared in the Las Cruces Sun-News on June 27, 2021. With COVID and the Gov.’s COVID policies at last receding, the race is on to determine how effective or ineffective our Gov.’s lockdown policies really were. Our analysis is below:

This was a “big” week for New Mexico’s heavily subsidized (money-losing, see image from LFC at bottom of post) film industry. The industry which already receives up to 35% of its costs for doing business saw the opening of the new (also heavily-subsidized studio) NBC/Universal studio.

The facility will receive $10.7 million in LEDA subsidies from state and local governments in addition to benefiting from State subsidies.

As if that weren’t enough, in Farmington the ribbon was cut on the refurbished Totah Theater. Previously privately owned, the historic facility was purchased by San Juan County and has received state grants in order to become a “place for productions, screenings and have dedicated office space for production companies to work out of.” The facility is eligible to receive New Mexico’s “most generous” film subsidy rate of 35%.

Naturally, Gov. Lujan Grisham crowed about the film industry having “its biggest year ever” Of course, if film were such a boon for our State it wouldn’t be raising red flags at the LFC over the cost of subsidies and perhaps New Mexico’s unemployment rate wouldn’t be 2nd-highest in the US.

Big news: despite the pandemic, New Mexico’s film and television industry had its biggest year EVER.

We’ve made New Mexico the place to be for film and TV – and we’re not done yet.https://t.co/DBDdY16xyd

— Michelle Lujan Grisham (@GovMLG) June 25, 2021

Dangerous oversight or intentionally vague?

The open government rabbit hole is getting pretty deep.

By their own admission, the New Mexico Department of Information Technology (DoIT) does not maintain a records retention policy separate from the “regulations”  provided in the New Mexico Administrative Code (NMAC).

NMAC vaguely addresses broad terms like “transitory” and “non-record” but does not specify any length of time that records ought to be accessible.

As an example, hospitals are legally obligated to maintain specific policies that explicitly identify the relative importance of certain documents, the corresponding periods of time that those documents have to exist, and the process by which the documents are disposed of after the time of the retention period has elapsed. And HIPAA is pretty clear that there are fines associated with improperly retained documents.

Without good policies in place, employees are left without direction and chaos ensues. Well, Michelle Lujan Grisham’s administration has cried havoc and let slip the dogs of perplexity.

In an official Inspection of Public Records Act (IPRA) request to DoIT, I specifically sent a copy of the Document Retention Guidance currently being disseminated by the legal department of Governor Michelle Lujan Grisham’s administration. I asked if DoIT has their own policy related to document retention. They provided the link to the NMAC section that addresses records management requirements for electronic messaging.

When asked specifically for the policy that dictates the retention of records, they responded that “DoIT does not currently have a records retention policy”.

A behavioral pattern is developing. Over a dozen state agencies are using Microsoft Teams and those same agencies employ the executive branch policy of automatic deletion after a peculiarly and exceptionally short retention period, previously reported as 24 hours.

The absence of an official retention policy maintained by DoIT contradicted by the existence of legal guidance that “You may delete any text message that is a routine communication and is not ‘required to control, support or to document the operations of government’” is antithetical to the principles of open government. When in doubt, it seems that New Mexico agencies err on the side of deletion rather than retention.

If this sounds confusing, that’s because it is. But with actions like this, it is becoming increasingly clear that New Mexico government is obfuscating the obvious and trivializing the importance of open and transparent government.