The Rio Grande Foundation has long argued that New Mexico needs to develop its private sector economy beyond the oil and gas industry (we support oil and gas, but believe New Mexico relies too much on this volatile source of jobs and revenues).

A new report from Wallethub confirms that New Mexico is the MOST reliant state in the nation.

Check out the interactive map below:

The other “most reliant” states are Kentucky, Mississippi, and West Virginia.

Arizona a 9th-most reliant is the most reliant state bordering on New Mexico while Utah at 46th is the least reliant.

Due to the shutdown of New Mexico’s economy during the COVID19 outbreak New Mexico businesses have had to furlough or let go large numbers of their workers. This is going to potentially have serious repercussions for the State’s unemployment insurance fund and the payments those businesses must make to that fund.

This article by Carol Wight of the New Mexico Restaurant Association addressed the issue from the 2008-2009 economic crisis. Unfortunately, if the political leadership of New Mexico is not prudent, businesses could be deeply impacted, even if they are able to recover from the shutdown.

You can watch the story here:

On this week’s interview podcast, Paul sits down with Roswell Mayor Dennis Kintigh. Paul and Dennis discuss the economy of Southeast including the increased economic impact of the old Walker AFB. Dennis is a former State legislator so the two discuss Dennis’ work in the Legislature on limiting film subsidies and they also talk about the big shifts in the Legislature in the recent primary election.

With New Mexico’s Special Session to begin (in darkness) on June 18, the Gov. has finally put out her main proposals for addressing the economic situation. KOB TV Channel 4 has the details (the proposals weren’t listed on the Gov.’s official website).

According to KOB, the plan is to:

• Use $725 million of federal coronavirus relief funds
• Tap the state reserves.
• Refinance road projects and reduce pay raises for state employees from 4 to 2   percent.

The Gov. added that “furloughs and layoffs are not on the table.”

In other words, no serious action will be taken to address the budget. While many businesses STILL remain shut down by order of the Gov. and the economy struggles to regain momentum New Mexico government employees will not only NOT suffer any pain from being “all in this together,” they will see pay raises.

1) The Gov. is hoping that recent “progressive” gains will give her the freedom to tap New Mexico’s various permanent funds in January and beyond if needed. Some of those dollars may be used to support businesses impacted under COVID19 in a move that could prove politically-popular (providing support/stimulus for businesses without raising taxes by tapping permanent fund dollars);

2) The Gov., however, doesn’t want to do anything politically-unpopular (program cuts or tax hikes) before November’s election.

3) As the newly-minted leader of the Senate “progressives” Sen. Jerry Ortiz Y Pino outlined in a recent column, tax hikes are very much on the table.

1. 1. .

   

$34 million and counting is what New Mexico has spent so far on fighting COVID19. Federal CARES Act money should be available and more than enough so as to not impact New Mexico’s budget (the shutdown is another matter).

But, as Gessing cautions in his brief comment for the story here and on the picture, politicians have a tendency to spend money for purposes that aren’t necessarily as intended.

By now you may have heard that the special session set to kick off in Santa Fe on June 18 will be closed to the public. Set aside the constantly changing “science” behind the lockdowns and the ongoing restrictions on our personal liberties. The simple truth is that if New Mexicans can shop in big-box stores and malls with some restrictions, they should be able to weigh in on the future of their state and the (as of yet unknown) policy changes being proposed by Gov. Lujan Grisham.

Yes, the New Mexico Legislature is SUPPOSED to meet in public. But the majority can make its own rules, so it is Democrats only who get to determine whether the public is allowed in although I think the courts will have the final say.

Ultimately, more innovative solutions could be put into place. After all, committee meetings already have limited space due to fire restrictions. The same could be done just on another level with entrance to the building itself and Committee rooms themselves.

On this week’s Tipping Point New Mexico discussion Paul and Wally discuss the fact that over the weekend Paul got tested for COVID 19. He was not feeling well late last week and went ahead and got the test. It was negative, thank goodness. Paul explains the process and what happened.

There’s a serious discussion going on in Minneapolis and other cities about abolishing the Police. Others are discussing reforming the police. What can actually be done? Parallels between police unions and teachers’ unions.

In the biggest New Mexico-specific news of the last week, the recent primary election means some big changes are ahead in New Mexico’s Legislature. Paul and Wally discuss the results and likely political and policy outcomes for New Mexico.

Adding on to that discussion of the Legislature, Sen. Jerry Ortiz y Pino’s writes in the Albuquerque Journal with an absurd “plan” to eliminate oil & gas in NM. Wally and Paul discuss the rise of Ortiz y Pino from “Comrade Jerry” to being the de-facto “leader” of the NM Senate’s “progressives” and why you can’t dismiss his insanity out of hand.

Good news? A national poll from Wallethub shows that Americans overwhelmingly oppose tax hikes. Question: After the economy recovers, should tax rates go up to cover the cost of coronavirus pandemic?

Finally, Paul and Wally have a brief conversation about the special session and what, if anything will happen.

Comparing school districts in New Mexico is often challenging. Albuquerque Public Schools (APS) is one of the largest districts in the entire country. With that come certain “efficiencies of scale” as well as some serious drawbacks.

The answer is to compare similar districts with roughly similar demographics across state lines. Laura Abendroth a policy analyst with the Rio Grande Foundation has crunched the numbers in a detailed research project on the issue of school funding among various school districts of similar demographics. The paper is, “Albuquerque Public Schools v. Southwestern Regional School Districts: How Does Spending and Student Performance Stack Up?”

In advance of this project Abendroth considered numerous large school districts in states surrounding New Mexico. The primary consideration (aside from size) was demographics and poverty.

In addition to APS, Abendroth studied the Austin (TX) ISD, Fort Worth ISD, Denver Public Schools, Mesa Public Schools, and Alpine (UT) Public Schools.

Making solid comparisons across state lines is never easy. For example APS has the highest percentage of Hispanics and Native Americans of the districts studied, but APS has a lower percentage of “English Language Learners” than any district beside Alpine.

Abendroth found (during the 2019-2020 school year) that while Austin ISD’s spending is quite high relative to ALL other districts studied at $28,000 per pupil, APS spends the next-largest amount at $17,571. Denver spent $16,000 per pupil and the other districts all spent $11,000 or so. So, APS is a relatively big-spender on a per-pupil basis.

Indeed APS spends about 20% of its operating budget on capital projects while the other districts spend just 10% of their budgets. Notably, most of those districts have smaller overall budgets, thus making that capital outlay figure even larger in real terms.

Also, APS DOES spend a lot of money in the classroom. In fact, APS class sizes are just 10.7. Austin and Fort Worth are in the mid-teens per class while Denver and Mesa are very close to 20. Alpine School District has 23.6 students on average.

Unfortunately for APS students all of this spending and extra attention in the classroom doesn’t have the impact we would like. Across the board (in terms of graduation and 4^thand 8^thgrade reading and math NAEP scores) APS only outperforms Fort Worth ISD. To be blunt, APS taxpayers are not really getting their money’s worth.

While solutions are beyond the scope of Abendroth’s paper the Rio Grande Foundation has touted more robust “school choice” options, elimination of LEED mandates and “Prevailing Wage” laws both of which drive up construction costs, and reduction in overall District overhead.

UPDATE: this post was written on Tuesday, June 9. The Gov. announced the partial reopening of breweries on June 11. Bars remain closed.  

As with so many aspects of our Gov.’s economic shutdown the “science” behind the ongoing shutdown of bars and breweries just doesn’t add up. The  Gov.’s plan is here. It doesn’t even mention bars and breweries (who, by the way have been incredibly quiet and patient during this shutdown).

One assumes that the reasoning behind the shutdown goes something like this: people drink at these places and drinking can cause a loss of judgement, thus a loss of “social distancing.”

That is all fine, but many breweries in particular have patios and outdoor seating. It seems hard to believe those couldn’t have been opened months ago. Of course the difference between a “restaurant” and a “bar” or “brewery” is not always apparent. It simply has to do with the percentage of food sold relative to alcohol. 

New Mexico’s brewing industry was one of the State’s real economic success stories due in large part to some big tax changes made by the Legislature. One wonders how these businesses are faring and how many of them will open when the Gov. finally allows them to get back to business. One hopes that is on June 15 (or even June 12 to get the weekend started).

Sen. Jerry Ortiz y Pino has been in politics a long time. We even see eye-to-eye on a small handful of issues and our interactions have always been cordial (I wish I could say the same about other New Mexico “progressives.” But, his recent opinion piece in the Albuquerque Journal in which he argued that New Mexico should “end its oil revenue addiction” is foolhardy and dangerous.

While you should read the piece for yourself, Ortiz y Pino essentially argues that New Mexico should stop “relying” on oil and gas revenues. He doesn’t imply shutting down the entire industry. Indeed his argument is not directly an environmental one. However, he implies that there is some realistic way for New Mexico government to keep spending at current levels while completely eliminating 30% (he claims) or more of the State budget (oil and gas). Other reports say oil and gas are 40%, but at this point who’s really counting?

What does Jerry argue should replace the Industry? If you said tax hikes, you are a WINNER! He wants to “eliminate” Bill Richardson’s tax cuts, Susana Martinez’s tax cuts, eliminate GRT exemptions, tap the (oil and gas generated) Land Grant and Severance Permanent funds, raise capital gains taxes, and increase taxes on alcohol, tobacco, and gasoline.

Truly, this is a recipe for economic disaster. But, with “moderates” like John Arthur Smith riding off into the proverbial sunset, “progressives” especially those who have seniority like Ortiz y Pino will be empowered. If he gets his way good luck New Mexico!

The good news is even former Gov. Bill Richardson opposes raising taxes. So do 72 percent of Americans according to a recent poll from WalletHub. The Rio Grande Foundation is collecting legislative/candidate pledges to NOT raise taxes

Prior to the COVID-19 outbreak in New Mexico, the Four Corners region of New Mexico faced serious economic challenges. The declining price of natural gas which had been the basis of the area’s economy for decades was the most significant issue.

The price which exceeded $15 per million cubic feet (MCF) back in 2008 embarked on a rapid decline with the advent of the “fracking” revolution. The price is now below $2.00 per MCF and shows no sign of rising in the foreseeable future. That’s a decline of over 80%.

The next “shoe” to drop was the Gov.’s Energy Transition Act which placed the San Juan Generating Station on a path to closure in June of 2022. Efforts by the City of Farmington and Enchant Energy could result in the plant remaining open beyond that deadline.

What is Governor Lujan Grisham’s position on the Enchant Energy project?  No one seems to know. This critical economic issue like so many others has taken an extreme distant back seat to COVID-19.

The Four Corners region needs a Governor and state government that can do more than one thing at the same time. San Juan Generating Station’s employees, and Four Corners’ government officials and economic planners could certainly benefit from state government leadership.

In addition to the extreme energy industry challenges, the Four Corners has also been disproportionately hit by the effects of COVID-19. The Four Corners region has been hard-hit by the virus and has faced stricter timelines for its opening and subsequent economic recovery. The result has been job losses and severe decreases in economic activity for the Navajo Nation and the region as a whole far greater than many other parts of New Mexico.

Add on top of all of these factors and the Gov. is facing a second impactful decision regarding the so-called “Methane Rule.” The Gov. is expected to impose some kind of new regulatory regime on natural gas producers, predominantly in the Four Corners in the months ahead. While environmentalists claim an untold bounty will be reaped in the form of capturing “vented and flared” methane, the reality is that strict rules as proposed by the environmental community would further devastate the region.

All of this is to say that Gov. Lujan Grisham literally holds the Four Corners’ future in her hands. No amount of job retraining money will prepare the local population for jobs that don’t exist. No amount of corporate welfare or state “investment” in things like movie studios will get the region on solid economic footing.

Rather, the region needs real jobs and real economic investment the likes of which job training and government “investment” simply can’t offer. Enchant Energy must be given an opportunity to make its carbon capture technology work. If it doesn’t or if economic conditions show that it is just not feasible, so be it, but the opportunity to keep hundreds of jobs and millions of dollars of economic activity and tax revenue in the region and State simply can’t be dismissed. However, if the carbon capture technology works New Mexico will find itself on the forefront of a new form of green, carbon-free energy.

Likewise, any methane rule must be designed with the realization that if the San Juan region becomes too costly in terms of regulations, natural gas producers will permanently close all but the highest producing wells, and more and more business will leave the state.  Given the massive surplus gas production and rock-bottom prices, it is hard to see additional producers and the jobs they bring ever returning to the region.

New Mexico is quickly heading from the proverbial “penthouse” to the “poorhouse” based on 40% of its budget (oil and gas) essentially evaporating overnight. The Four Corners faces even greater challenges thanks to economic forces beyond their or the Gov.’s control. Inflicting further, unnecessary economic damage on the region would be inexcusable.

Gessing is president of the Rio Grande Foundation an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

On this week’s episode, Paul sits down with Tom Mullins. Tom is on the Board of the Rio Grande Foundation. He is in the oil and gas industry and resides in the Four Corners area (Farmington). That area of our State has suffered serious economic challenges for more than a decade as natural gas prices have dropped significantly. Worse, they recently were hard-hit by the COVID-19 epidemic with even some of Tom’s family members dealing with the issue.

As if that is not all bad enough there are two significant additional economic threats to the region in the form of the shutdowns from the Energy Transition Act and the Governor’s Methane Rule. Both of those could have further, negative impacts on the already-struggling region.

All is not lost, however, as Tom and Paul discuss there is a potential carbon sequestration plan that could save the Generating Station and with the Virus threatening big cities, the Four Corners with its wide-open spaces could be a more attractive destination for people looking to relocate. Finally, efforts are in the works to bring a rail spur to the area.

Among the calls for racial unity and reform in the wake of the death of George Floyd there have been serious conversations on the left for what seems like the first time regarding police unions. Free marketeers (especially more libertarian types among them) have long advocated for reform or abolition of police unions and those calls have grown stronger as well. 

We applaud New Mexico Rep. Javier Martinez and any other political leader of any party who is willing to seriously explore reforms to government unions that operate under a monopoly and often with little to no accountability.

Of course, as the following shows police unions and teacher unions operate in similar ways and conditions. Notably, the negative impacts of both police and teacher unions have disproportionate negative impacts in and on impoverished and communities of color.

New Mexico’s Democratic leaders MAY be willing to discuss police unions and that is a welcome development. There is practically zero interest in addressing teachers’ unions, however.

On this week’s podcast discussion Paul and Wally discuss the George Floyd protests/riots in Albuquerque and around the nation.

The protests are happening in the shadow of COVID 19 with businesses having been shut down for several months. There are so many issues going on, but are cities as we know them dead?

SpaceX launches the first American manned space flight in nearly a decade to the International Space Station. This is a big day for privatized space flight and just in general good news for the country.

Gov. starts opening New Mexico a bit further. Paul and Wally discuss the details.

Primary election Tuesday. RGF got dragged into a SE NM primary. Paul and Wally discuss what is happening this primary election day.

Finally, online sales giant Amazon.com comes to NM. Paul and Wally share a few thoughts on this momentous occasion.

There were a lot of important races in New Mexico’s primaries last night, but the Rio Grande Foundation focuses on the Legislature (the main policymaking arm of New Mexico) and this post is going to focus on what happened in those races last night.

1. 1. 1. New Mexico’s “moderate” senators took it on the chin. John Arthur Smith was the most notable defeat which will have profound impacts on New Mexico’s fiscal future, but Clemente Sanchez and Mary Kay Papen were also taken down. The defeat of Smith means that come 2021 (barring a massive Republican upsurge in November) there will be little opposition to “progressive” efforts to tap the permanent fund at least in the Legislature. Gov. Lujan Grisham has already made tapping New Mexico’s permanent funds the centerpiece of her economic strategy. Her path to do that just got MUCH easier.
      2. From a fiscal conservative perspective, while Smith has done a lot of good for New Mexico there’s also no concern that he allowed spending to grow out of control on his watch. He’s allowed millions to be paid out in film subsidies and has generally been unable to do much to reform New Mexico’s broken tax code, economic incentives, or budget processes besides block attacks on the Land Grant Permanent Fund.
      3. With Smith gone the GOP (especially the Senate) will need to provide an ideological alternative as opposed to operating as a support structure for Democrats like John Arthur Smith. While there is no question that Smith is better than the progressive alternative on policy his presence also neutered many in the Senate GOP. Two additions to the Senate who defeated incumbent Republicans last night (Gregg Schmedes and David Gallegos) will hopefully provide a stronger “loyal opposition” in the Senate than has existed in the past, but the Senate is still likely to be a heavily-Democratic controlled body next year and those Democrats just became a lot more “progressive.”

The Rio Grande Foundation often comes under criticism from the left. But sometimes we come under fire from the right as well.

For starters we are designated as 501c3 “education and research” think tank. We don’t make endorsements and we don’t “carry water” for any political party or politician. Various media outlets have called us libertarian, conservative, and free market. We call ourselves “free market,” but we don’t waste our breath and time arguing the finer points of ideology because we believe that our work is self-explanatory.

For starters, New Mexico is a deeply challenged state. We believe that a vast majority of these issues are self-inflicted. New Mexico lacks economic freedom and remains poorer and less well educated than our neighbors. We also spend a VAST majority of our time focused on state and local issues as opposed to federal ones.

Those issues broadly include:

1. Size of Government: New Mexico has long been a state driven by government. Data show that state/local spending is too high and that government regulations make doing business in New Mexico less attractive than doing business elsewhere. We’ve worked on this issue from all angles including: all forms of taxation, subsidies and corporate welfare (notably film subsidies), but also LEDA, JTIP, and “green” subsidies.
2. Regulation: Rio Grande Foundation has led the charge for “right to work” repeal of NM’s”Davis-Bacon” law, reform of government employee pensions, and against numerous “nanny state” regulations like plastic bag bans. We have also done extensive work against “green” programs from the Energy Transition Act to costly “green” building codes.
3.   School Choice/Education Reform: Across the political spectrum New Mexicans agree that our K-12 system is failing. While politicians of both parties typically opt for some combination of more money, more time in school (pre-K), and some form of top-down accountability, the Rio Grande Foundation believes that parents and (to an extent students themselves) are better able to decide on the educational options that appeal to them. Charter schools are a good start and should be expanded, but more options are needed.

Additionally, the Rio Grande Foundation supports the US and New Mexico Constitutions, we stand up for free speech, gun rights, private property, and open government.

We don’t take on immigration, gay rights, or abortion issues.

So, there you have it. We at the Rio Grande Foundation have our plates very full, but we are making a difference in New Mexico every day. If that appeals to you, please consider making a tax-deductible donation today!

(Albuquerque, NM) – The voters of Albuquerque voted against Democracy Dollars in November of 2019, and the Rio Grande Foundation played a pivotal part in the defeat of the ballot measure. Furthermore, the Rio Grande Foundation won an ethics complaint against the Mayor for his use of the City’s website (CABQ.gov) in which he specifically called for voters to approve Democracy Dollars and other bond measures.

Just under a year ago the Rio Grande Foundation wondered if/when the online retailing giant Amazon.com would have a warehouse presence in New Mexico.

Recently, of course, it was announced that Amazon would indeed be building a distribution center in Albuquerque and creating 1,000 or so jobs. Better still, so far as we know, while Bernalillo County is spending $6 million on infrastructure and utilities, no major subsidies were required to bring Amazon here.  This is pretty much ALL good news for the local economy.

Here are a few things to consider:

• Contrary to some on the left (see Tweet below), the issue of Internet sales taxes didn’t play a role in Amazon’s decision. They are a big company with lots of physical locations nationwide and actually lobbied FOR Internet taxation.  It is actually small businesses with one physical location that are most impacted by Internet taxes.

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• Recent changes to interpretations made by the US Supreme Court companies doing business online like Amazon only had to collect taxes on Internet sales if they had a physical presence. A few years that changed and New Mexico like many other states could collect sales taxes without a physical presence.
• While Amazon coming to town is good news for the local/State economy the overall economy is what matters, not the comings and goings of individual businesses. Rockwell just left. Amazon just came. There are many other businesses opening and closing every day. New Mexico remains relatively unfriendly to business and unless some needed policy reforms are enacted, that isn’t going to change.

There are a few intense battles in New Mexico going on among GOP candidates for Senate seats. We’ve weighed in on the race for Jim White’s seat, but Rep. David Gallegos is challenging Sen. Gregg Fulfer for his SE-New Mexico Senate seat and our Freedom Index has been used quite a bit.

In a debate posted here on Facebook (go to nearly the end at 1 hour 57 minutes) the Rio Grande Foundation and its Freedom Index became an issue. You can check the add run by the Gallegos campaign below which uses an accurate interpretation of our “Freedom Index” vote tracking system.

While RGF never attacked Fulfer, his statements regarding the Rio Grande Foundation expose his basic misunderstanding of our “libertarian” limited government, free market philosophy.

He implies that the Rio Grande Foundation rejects that our nation was founded on biblical principles, claims that we support legalizing “all” drugs, and claims we support allowing transgender boys into girls’ bathrooms and for them to compete against girls in sports.

Simply put, none of these statements are true.

The Rio Grande Foundation is a think tank. We work on economic and education policy issues to restore choice and personal responsibility. We HAVE endorsed the idea of marijuana legalization (based on criminal justice, personal freedom, and economic issues) but RGF has never endorsed legalization of ALL drugs.

We have Freedom Index data going back to 2015 (go to our webpage and look for the Freedom Index Link). Fulfer has been in the Legislature since 2019. He’s voted as moderate Republican during that time period. Gallegos, on the other hand, is a conservative within the Republican caucus in the House which is more conservative than the Senate GOP.

Whether the voters or candidates agree with the Rio Grande Foundation’s take on the issues is up for them to decide, but it is important to clear the air when the Foundation is accused of taking positions on issues it simply hasn’t taken.

On June 1 New Mexico will open further under the latest health order from Gov. Lujan Grisham. We welcome this positive step.

Notably, after preventing drive in theaters from opening (both in Las Vegas AND a one-night showing in Rio Rancho) Gov. Lujan Grisham made a specific point of opening drive in theaters. She also reopened hair salons, barbers, and gyms.

Houses of worship remain at just 25% which seems unnecessarily low, but the biggest issue at this point is that bars and breweries remain completely closed. When those will open is anyone’s guess, but we’ve seen massive growth in the home-grown brewery business and it seems hard to justify their closure at this point (especially since many of them have more plentiful outdoor patio areas than restaurants).

The strict limitation on large groups remains in effect and she is setting herself up for some very controversial and difficult decisions over Balloon Fiesta and the State Fair in the very near future.

Blair Dunn is a hard-charging New Mexico attorney who loves to sue the government (and often wins). He and Paul sit down this week to discuss the legality of the current “lockdown” situation in New Mexico. From whence do politicians (including Gov. Lujan Grisham) derive their powers? What can or should citizens do about it? Additionally, Paul and Blair consider the importance of open and transparent government during this crisis and discuss some of the actions he and the Foundation have taken together to defend open and transparent government in New Mexico.

You don’t want to miss this wide-ranging and timely discussion.

With so many in person events on hold these days organizations, especially political ones, are working overtime to figure out ways to keep momentum and activism going without meeting in person.

The Los Alamos GOP recently invited RGF president Paul Gessing to present information on New Mexico’s economy and the prospective recovery from the Virus shutdown and oil/gas price decline. You can watch the webinar below. Or, if your group would like to host a similar discussion, contact the Rio Grande Foundation at: info@riograndefoundation.org or 505-264-6090. We can even “host” through our Zoom account!

On this week’s discussion podcast Paul and Wally acknowledge and appreciate the soldiers who have fought for the United States and died in battle. In part due to the relative lack of options this particular holiday, Paul and Wally record the podcast on Memorial Day itself.

As has become tradition in recent months the two offer the latest updates on COVID 19 starting with the fact that New Mexico’s special session is now scheduled for June 18. The Gov. seems to think the State is in great shape due to the existence of a “rainy day fund” totaling about $1.7 billion, but Wally and Paul beg to differ.

Also, an NM In Depth story asserts that public schools may avert deep cuts (at least in the June session). Paul believes the Gov. is waiting until after the November election to make the tough decisions.

New Mexico is among the strictest US states when it comes to being locked down according to a report from Wallethub.

A recent report from the Wall Street Journal argues that the Coronavirus slowdown and drop in oil prices threatens the shale boom for years. Wally is more hopeful.

Paul discusses candidates of both parties in the ongoing primary elections who have and haven’t signed the Rio Grande Foundation’s pledge not to raise taxes.

Finally, in a scary story that has the support of the Gov., New Mexico’s Secretary of Tourism says that New Mexico may potentially not have meetings of 100+ people for a year or 18 months. This would mean the cancellation of many events that make New Mexico so unique including the Balloon Fiesta not just for this year but for two years, not to mention sports, weddings, the State Fair, and many more.