On this week’s podcast conversation, Paul sits down with Jennifer Rivera, MA Ed. Jennifer is the Executive Director of Estancia Valley Classical Academy which is part of Hillsdale College’s Barney Charter School Initiative. Jennifer is a return guest and we discuss what makes her charter school unique, the fact that the school just received a 5-year extension on its charter, and the challenges students and families have been dealing with during COVID.
In this in-depth and candid discussion, we discuss lost learning (even at a high-performing school) and how teachers, families, and students alike have dealt with the mental health challenges during the pandemic, the impact of broadband access, and of course the Gov.’s masking mandates. If you are concerned about education in New Mexico, don’t miss this conversation.
New Mexico has always struggled with low workforce participation levels. It was hardly a surprise when a national study earlier this year called New Mexico the “least hardworking state” in the entire nation. The COVID 19 pandemic AND the federal/state governments’ fear mongering, mask and vaccine mandates and massive social spending programs have done nothing to lure people back into the workforce.
Alas, as the chart below shows (using data from Bureau of Labor Statistics) New Mexico’s workforce participation rate has remained depressed even relative to other state. In January of 2020 the rate for NM was 55.5%. As of October 2021 that rate was 53.3% , a decrease of 4%.
Not only did New Mexico START with lower workforce participation than its neighbors, but it has seen a the steepest decline of any of its neighboring states. No state has gotten back to January 2020 workforce participation rates, but Oklahoma and Utah have gotten close.
The Spaceport and its primary tenant Virgin Galactic have always been secretive when it comes to their finances. Perhaps the taxpayer-funded facility and its main tenant are embarrassed by the fact that the facility has open for more than a decade without having been used for its intended purpose.
In New Mexico, gross receipts tax (GRT) is applied to all financial transactions unless the Legislature specifically calls them out for an exemption or deduction.
A ruling from the State of New Mexico Tax and Revenue Department does provide a “deduction from GRT which includes receipts from launching, operating or recovering space vehicles or payloads in New Mexico.” Tax deductions cannot be taken on the assumption that someday the Spaceport will engage in these activities. Rather, if launch, operation, or recovery trigger the deduction, then ticket sales should be taxed and there should be records of those taxes being collected and distributed to the State of New Mexico.
According to the Company’s SEC filings, in the 3rd quarter of 2021 Virgin Galactic reported revenues of $2.58 million, but reported no GRT payments (or deductions taken) to the State of New Mexico. RGF has also researched potential GRT payments by Virgin Galactic to the State of New Mexico and as seen no payments or accounting for those deductions.
“Lame duck” Albuquerque City Council is at it again. Fresh off a big giveaway to local labor unions, the “lame duck” progressives on city council are pushing a big subsidy for the University of New Mexico. Specifically, the subsidy is for redevelopment of property and the subsidy would be given to the university’s “redevelopment corporation.”
The vehicle for the subsidy is a “Tax Increment Development District,” or TIDD.
The deal works like this: Albuquerque diverts future property tax revenue increases from a defined area within the city toward the UNM improvement project. Because the subsidy is not appropriated directly from the city’s budget, the city will incur the immediate loss through forgone tax revenue. The funding is created by the borrowing against future increases in property-tax revenues. Long story short, it’s a bad idea: taxpayers and property owners all draw the short straw while UNM sees a major influx of cash.
Being considered is 2,491,300 square feet of building improvements–with $136,500,000 of $300,000,000 being tax-exempt and subsidized. This directly benefits UNM and its development arm at the expense of taxpayers throughout the city. Why is $136 million in “building improvements” being given to a tax-exempt university? Isn’t that the purpose of the bonds we already vote for?
The issue is being considered by vote of the city council on December 20th and I need you to write an email to Albuquerque City Council to urge their opposition to the deal. I’ve already drafted the email for you: all you need to do is click on the link and press send.
The special session is still going on in Santa Fe. What’s the status of those maps? Paul and Wally discuss. An issue regarding medical malpractice got added to the agenda. Wally and Paul discuss what is happening.
The full PRC has rejected the Avangrid/PNM merger on a 5-0 vote. Where to next?
When the special redistricting session got going in Santa Fe RGF and others were fairly sure that no substantive policies would be changed during the session. The session would spend millions of dollars in federal recovery dollars and draw up the new lines and go home.
That all changed when a group of doctors spoke out regarding a bill (HB 75), sponsored in that session by trial attorney and left-wing Democrat Damon Ely, which passed the Legislature in the 2021 session.
After much negotiation during the session, HB 75 AS PASSED was a “compromise” that raised certain limit on “damages” under New Mexico’s Medical Malpractice laws. This write up from the New Mexico Medical Society gives a pretty good explanation of the issues and compromises worked out (and who benefitted from the effort in the first place…that’s trial attorneys, one of the Democratic Party’s most powerful members). Rio Grande Foundation gave it a “-3” out of a potential score of “-8″ in our Freedom Index.
Fast forward to the special session and suddenly some doctors were threatening to leave New Mexico by the end of the year due to the impact of the bill on their businesses. So, during the special session a bill was introduced and passed that pushes off implementation of much of the bill for 18 months. That’s some good news, but the fundamental problem with the law remains. The legislation’s harm has only been postponed.
As we reported recently, New Mexico’s performance on employment since COVID 19 began has been terrible. A new Wallethub report further illustrates that fact. As the map below shows, New Mexico saw the 50th-most “recovery” in joblessness over the past week.
And as the image below shows, New Mexico’s increase in unemployment since the start of COVID in early 2020 has been worse than all other states beside Delaware and Rhode Island.
(Albuquerque, NM) – The Rio Grande Foundation has filed a complaint with New Mexico Attorney General Hector Balderas under New Mexico’s Inspection of Public Records Act (IPRA) alleging that Governor Michelle Lujan Grisham has failed to disclose records relating to the governor’s attendance at the United Nations Climate Change Conference in Glasgow, Scotland.
In their official capacity, Governor Lujan Grisham and members of her administration attended the conference as representatives of New Mexico. The expenses incurred for travel, food, and lodging are subject to inspection by the public, whether the expenses were paid for with taxpayer funds or otherwise. If special interests funded this excursion, the public has a right to know.
The Foundation submitted a request for records on November 1, 2021 asking for all documents related to these costs. On November 16, 2021, the request was improperly denied. The request to inspect records was expanded and a revised request was submitted on November 18, 2021 and was wrongfully denied on November 23, 2021.
According to the Inspection of Public Records Act, “public records” means all documents, papers, letters, books, maps, tapes, photographs, recordings and other materials, regardless of physical form or characteristics, that are used, created, received, maintained or held by or on behalf of any public body and relate to public business, whether or not the records are required by law to be created or maintained.
Patrick Brenner, Vice President of the Rio Grande Foundation, said “We requested all receipts and documents associated with the administration’s attendance at this international conference. Governor Michelle Lujan Grisham has acknowledged that her attendance was in her official capacity as a representative of New Mexico. As such, the records related to transportation are subject to inspection, especially if they were paid for by a special interest or foreign entity. No disclosure of any in-kind contribution can be found in the latest campaign finance report. The administration’s continued devotion to anti-transparency is deeply disturbing and undermines the public trust.”
The Foundation maintains that the Office of the Governor has improperly and wrongly withheld documents that ought to have been made available for inspection by the public. We look forward to a swift response from the Attorney General.
Paul and Dean discuss the meaning of economic freedom and its various components and why economic freedom is a good thing. They also discuss which states and even Canadian provinces and Mexican states are the freest. Finally and most notably, Dean and Paul discuss the report’s findings and New Mexico’s backsliding on economic freedom under Gov. Lujan Grisham.
Prior to being reelected, Mayor Tim Keller claimed, “I’m 10 times the mayor going forward than I was when they elected me to take this job in the first place because of what I’ve learned and what we’ve been through.”
Unfortunately, it seems that the homeless and crime situations are “10 times” what they were when Keller took office. Now that the runoff election is in the books, we know that Keller will no longer have a “rubber stamp” council, but he also won’t have a veto-proof group ready to take him on, it will really be up to the Mayor to do “10 times better” than he did in his abysmal first term.
Also, the following photos were taken on and around 2nd Street south of Coal in an area that Keller (unwisely) had pushed for a stadium. Keller claims to be an “environmentalist” and yet the physical environment of parts of our city look like the very worst of the Third World. The photos below were taken on December 7, 2021.
n a last-ditch effort, ABQ City Council’s liberals push through a big union giveaway in the form of a Project Labor Agreement. Is it even legal?
Runoff elections are today. Perhaps if they go well the ordinance can be repealed?
The redistricting special Session kicks off in Santa Fe with mandatory vaccines, metal detectors at the doors, and no guns. Also, Sen. Jacob Candelaria is now an Independent, but the good news is that they are focused on drawing lines and not much else.
Acting VERY quickly and at the behest of some of New Mexico’s most entrenched and powerful special interests (labor unions), the Albuquerque City Council passed its own Project Labor Agreement (PLA) law on Monday evening.
The bill was formally introduced after the election on November 15 and was not heard by a city council committee ahead of December 6 vote.
The bill passed 6-3 with the leftists and lame-duck councilors all voting “YES.” The bill was sponsored by outgoing councilors Borrego and Sena with Davis, Benton, Gibson, and Peña supporting.
There MAY be legal challenges due to the way it was passed without the usual procedures being followed, but the easiest way to overturn the law is for a 6-3 “conservative” majority to repeal it outright.
Yet another report makes it abundantly clear that locking kids out of classrooms during the Pandemic has had an incredibly detrimental impact on student outcomes.
Quoting from the piece, scores “plummeted for all students compared to the last time it was given before the health crisis began. Nearly three million students took the test both times. But achievement among children who attend schools with large proportions of Black and Latino students suffered the most, the data shows.”
“In reading, declines were nearly twice as steep for students at majority Latino schools as they were for children at majority white schools.”
The good news is that the session MOSTLY will focus on the task at hand which is to draw those political lines as opposed to passing a bunch of extraneous legislative priorities.
The most notable districts to be drawn involve the Legislature and members of Congress. Speaker Egolf said he’d work to eliminate Rep. Yvette Herrell from Congress, but considering this is a partisan process and Democrats are in charge of it all, they’ll likely work to make sure that they hold on to power in Santa Fe as well.
There WAS a redistricting commission and here are some of the options they provided, but the Legislature and Gov. (controlled by Democrats) ultimately draw the maps.
As if gasoline prices aren’t high enough already, Gov. Lujan Grisham and the Democrats have put forth draft legislation (you can provide comment on it NOW) that would further increase the price of gasoline.
The bill will be considered in the 2022 session no matter what and with a large number of “progressives” willing to blindly support Lujan Grisham it could easily pass, but the Environment Department IS collecting comments on the draft bill. We recommend something along the lines of “NO” or “Hell no” or perhaps something more nuanced as “Ethanol makes our air dirtier.” (feel free to review the EPA study linked).
As the article notes, “making ethanol and using it produces nitrous oxides in the atmosphere. Once there, nitrous oxides plus oxygen plus sunlight becomes ozone — a major pollutant.”
Lynne Andersen has been a fixture in Albuquerque politics for decades as the leader of NAIOP (more on that organization in the podcast).
Lynne is leaving the organization at the end of this year and Paul wanted to find out all about her lengthy history in New Mexico politics and how things have changed over the years. In addition to history, Paul and Lynne discuss development and economic issues in Albuquerque and how she sees things the industry and City changing in the future.
A new story in the Albuquerque Journal discusses the boom going on in New Mexico’s oil and gas industry.
According to the story, “In raw numbers, the industry generated almost $5.3 billion in revenue for state and local governments in the 2021 fiscal year – a 12% increase over 2020 and more than twice as much as in 2016.” Furthermore, “oil- and gas-derived income made up 35% of all general-fund revenue for the state budget last year.”
In a sane world with a sane political party, the Democrats would be busily adopting economic policy reforms to make New Mexico’s economy more diversified regardless of oil and gas production. Instead we get a gusher of revenues, expanded government, and perpetual poverty.
The next time Gov. Lujan Grisham touts teacher pay raises and all of the new spending being funneled into New Mexico’s public education system, be sure to remember this new study from the National Bureau of Economic Research which shows how keeping students out of the classroom negatively impacted student performance on test scores. The chart below really illustrates the point:
And, while New Mexico was not included in the study, the fact that, as the follow chart shows, New Mexico students lost more time in the classroom (due to our Governor’s policies) than all but six other states.
On this week’s podcast, Paul and Wally begin with a discussion of NM’s COVID infection situation and the rise of the Omicron variant. Why is NM’s data so slow and how is the infection situation evolving?
Spurred by analysis by our friends in Texas who compared big red and blue states with each other, we compared these big red and blue states with New Mexico. The results are interesting.
Anyone who lives in and travels around Albuquerque sees the tents and shopping carts. Unfortunately, voters saw fit to give Tim Keller another four years as Mayor, but City Council MUST do everything in their power not to coddle and “help” the homeless, but to move them off of city property and enforce private property rights.
The “homeless” situation worsens day by day and the fact that this West Side family can no longer walk to school is a simple illustration that the City of Albuquerque is failing to provide even the most basic public services to its residents.
The story asserts that the “homeless” cannot be moved if they are on City property, but we know of no provision in City law that would prohibit their removal. If there is anything in ordinance, Council needs to make changing that top priority and Keller needs to be made to enforce the law.
You can see the data below which is loosely based on Ginn’s analysis linked above. The data are interesting to say the least.
New Mexico is definitely a “BLUE” state. It suffers from terrible workforce participation and unemployment rates and government consumes an outsized portion of our economy (even when compared with “blue” states).
Notably, New Mexico is also even less attractive as a moving destination than either big “blue” state. Ironically, New Mexico is the least “unequal” state as measured by the Top 10% income share and even New Mexico’s poverty rate isn’t “that” bad (compared with the other states) when the Census Bureau includes living costs and government benefits.
When she came into office in 2019 one of her very first policy initiatives was to expand New Mexico’s 25% film subsidy (it’s a rebate, not a tax credit). No more annual spending caps and 25% became the baseline as subsidies rose as high as 35%.
And, despite ample data showing that the film subsidy is an economic loser, we get yet another study of the program which (despite much effort to portray otherwise) shows the program to be an economic loser.
The critical line comes from page 24 of the “study” highlighted below:
Why is this the critical point? Simply put, the State has to get the money it spends on film subsidies from somewhere and that requires economic activity. The fundamental flaw with so many economic analyses that attempt to justify government subsidies (spending) on behalf of economic development is that it fails to account for the amount of economic activity that must happen in order to generate $1.00 of tax revenue (this is not necessarily the case for tax breaks or exemptions that merely remove a tax on a business or industry and thus still have overall positive economic impacts).
From the perspective of simplicity, New Mexico’s GRT and income taxes are levied at the same rate ≅ 5%. Thus, New Mexico needs about $20 of economic activity in order to generate a single dollar of tax revenue.
So, taking data directly from the report (page 4), to break even on $1 of film subsidy spending New Mexico would need ≅ $20 times in more or less organic economic activity. Thus, to break even on $160 million in film credits issued, the State would require not the $854 million in direct economic output generated, rather it would need to generate $3.2 BILLION in economic output.
The Legislative Finance Committee in 2019 acknowledged that the film subsidy program actually costs the State money. The following is from a post-session LFC slide presentation.
At the Rio Grande Foundation we have long been concerned about the negative impacts of Gov. Lujan Grisham’s policies (pre-COVID and especially during the pandemic). Numerous reports and analyses (such as Wallethub’s) have placed New Mexico at the very bottom when it comes to job creation (or destruction) during COVID.
So, we did our own analysis using Bureau of Labor Statistics data. As you can see below, New Mexico is unique among its neighbors in having lost jobs since COVID’s onset in March of 2020.
On a percentage basis, New Mexico has lost 2.35% of jobs since March 2020 while Utah has gained a robust 2.92%.
Check out the chart below which is from World O Meters. It shows the 7 day average of new COVID cases in New Mexico. The number of new cases peaked at 1,422 on November 23rd. That number has dropped steadily since and now stands at 1,080 as of November 29th.
Looking back at 2020 data, New Mexico saw a similar pattern with the Virus as it peaked on November 24th (at a much higher level) and dropped quickly from there. Clearly the Virus is seasonal, but numerous other factors have undoubtedly mitigated against the situation being AS bad in 2021 as it was in 2020.
Will the Omicron variant hit New Mexico and move us in the wrong direction? We don’t know. But, it appears that from an infection perspective New Mexico has turned the corner. We certainly hope so.
