SB 5 (you can read the latest at this link) isn’t just a “red flag” bill to allow the confiscation of guns, it is also a giveaway to the trial bar. A sneaky line in the bill states “failure to comply with duties established pursuant to state or law” would allow liability.

Perhaps this is an effort to demand compliance from reluctant law enforcement agencies, but it could also allow for a great deal of legal shenanigans.

In case you missed the story which appeared after the Academy Awards show on KOAT Channel 7, check it out here. The gist of the situation is that Albuquerque City Councilor Klarissa Peña took a very expensive trip with her family to the East Coast on the taxpayer dime. She says her fear of flying caused her to take the train, but it is clear that the taxpayers wound up picking up the tab for a variety of family expenses. Worse, the expenses were pre-approved by the City.

Using city documents, Target 7 did a breakdown of the trip. This is what taxpayers paid for:

$3,290 for train trips.
$960 for daily meal allowance.
$2082 for hotels.
$18 for cab fair.

That totals more than $6350. You can watch the full story by clicking on the picture below: 

This story was aired on February 2nd, 2020. Paul shares the Rio Grande Foundation’s perspective on the New Mexico Legislature.

The Rio Grande Foundation’s Freedom Index is back for the 2020 legislation session. Keep track of your legislators and how they vote on key legislation.

Visit the Freedom Index anytime at: rgfnm.com/score.

Here’s how it works:

Basically, legislation is scored on a scale of -8 (very bad) to +8 (very good). When a legislator votes on legislation, how they vote gets added into their score.

Example: if a bill is ranked as -2, and a legislator votes no, their score goes up by +2. Similarly, if a bill is ranked as +2, and a legislator votes yes, their score goes up by +2.

We’ll continue to track key legislation until the end of the session, February 20. Stay informed!

On this week’s interview podcast, Paul brings Reason Foundation pension expert Len Gilroy on to discuss the latest developments in pension reform in the Legislature. Len appeared on episode 121 of the podcast to discuss the need for pension reform.

Now, SB 72 and other pension bills are moving their way through the Legislature. Len has been to the Roundhouse in New Mexico twice to discuss pension reform with legislators of both parties. He shares further details about the pension debate as well as his experiences in the Legislature on this episode

Milan Simonich is the roundhouse reporter these days for the Santa Fe New Mexican. As such he is generally left-of-center and we at the Foundation have not always seen eye to eye with him in terms of his coverage. But, in his recent article “DOA: Taxpayers Bill of Rights Goes Nowhere in a Hurry” he is not unfair. He DOES miss or ignore several important facts.

While Simonich does not appear to be a fan of Colorado’s TABOR, he neglected to mention that back in November Colorado’s voters decided to keep TABOR in place overwhelmingly 56-44.

He also failed to note the stark differences between Colorado’s booming economy (especially since 1992) and New Mexico’s slow-population and economic growth and relative poverty not just to Colorado but to the rest of the nation. How would Simonich (or House Speaker Egolf who was quoted in the article) answer those points)? It’s hard to say, but there is no doubt New Mexico lags badly behind its neighbors despite the oil and gas boom. And we know that can’t last forever.

Paul Gessing Testimony on HJR 5

This testimony was given before the House Consumer & Public Affairs in the New Mexico Legislature on February 4, 2020. The bill which was sponsored by Rep. Rod Montoya (R-San Juan County) was unsurprisingly tabled (killed) on a party line vote

What should the Legislature do with the ongoing oil surplus? That is arguably the single most important question to be asked in the 2020 legislative session.

In New Mexico the tendency of the Legislature has been to spend the money. Some of it goes to various permanent and “rainy day” funds, but when considered relative to its neighbors, New Mexico government spends far more per person than its neighbors. Colorado in particular is a neighboring “blue” state that spends much less than we do here in New Mexico. In FY 2019, before the oil and gas boom really got rolling, New Mexico state and local governments combined to spend 23% of personal income while Colorado spent just 15%.

Not coincidentally, according to the Federal Reserve Bank of St. Louis, the average per-capita personal income in Colorado is $58,500 while the average income is New Mexico is $41,600. Colorado has achieved this success in large part by strictly limiting government spending growth since 1992. That state’s Taxpayers Bill of Rights limits annual spending growth to the combined rate of inflation and population growth. Voters have the final say on all government spending above that limit or any tax hike.

HJR 5 is a New Mexico version of Colorado’s tax and spending limit. It is more lenient in that it limits state spending to a combined rate of the percent increase in population growth + 3.6%. Furthermore it imposes a 3/5ths legislative majority requirement for the Legislature to keep revenues above that amount or raise taxes. Finally, surplus revenues above the limit would be split 50/50 between rebates to average New Mexicans and public education.

Based on calculations from the Rio Grande Foundation, if Rep. Montoya’s bill had been in place upon the departure of Gov. Susana Martinez in 2018, the citizens of our State and the public education system would have split over $1 billion in rebates or approximately $260 for each man/woman/child from the State over the past two years. That’s $260 returned to the hard-working citizens and taxpayers of New Mexico to invest for their own futures or put a down payment on everything from a new business venture to a new car.

Of course, the education system would be in line to see additional funding to the tune of at least $500 million as well.

Gov. Lujan Grisham talked about Colorado in her State of the State address. New Mexico does compete with our neighbors to the North. And, while we may have a tentative lead in the short term, over the last decade Colorado’s population grew by over 12.6%, one of the fastest rates of growth in the nation. New Mexico on the other hand grew by 1.8% which placed it 38^th nationally in population growth.

Whether you support marijuana legalization as I do and the Rio Grande Foundation does (or not), it is Colorado’s limits on government spending that set it apart from New Mexico economically.

Finally, when it comes to raising taxes and spending increases, this Amendment’s 3/5ths requirement is extremely important. We shouldn’t have bare majority votes on whether to take more money out of hard-working New Mexicans’ pockets. Oklahoma, another faster-growing neighbor of ours, has a 3/4ths (75%) requirement for the passage of tax hikes. The requirement in this amendment would be 3/5ths of 60% of the Legislature.

This is not a retroactive bill. New Mexico government spending is likely to increase significantly this session although at a somewhat lower rate than last year. But, if the oil boom continues or economic growth continues to at its current pace, we believe that average New Mexicans should be direct participants and beneficiaries in it. We are our own unique state with its own unique needs, but limiting government spending will do great things for New Mexico as it has done for Colorado.

On this week’s podcast discussion which is being recorded near the midpoint of what is shaping up to be a very busy 30 day legislative session, Paul and Wally start by discussing the so-called “Red Flag Bill” which has been introduced in the New Mexico Legislature. SB 5  passed its first committee, SenatePublic Affairs. All of the Democrats voted for it (including Liz Stefanics and Jeff Steinborn). All Republicans voted against the bill. Spurred in part by this legislation a rally was held at the Roundhouse against Red Flag bill and in favor of gun rights on Friday. RGF was in attendance.

SB 60 and SB 201 by George Munoz would change the requirements of who serves on the PERA board in a good way

SB 72 which actually makes the pension changes made it out of Public Affairs Committee (Stefanics and Sedillo-Lopez voting against). You can read the editorial that Paul and Len Gilroy wrote on the issue here.  Paul and Wally further discuss NM’s PERA system which has created a large number of millionaires: https://errorsofenchantment.com/nms-10000-pera-pension-millionaires/

Social Security bills move forward in legislative committees, but as the AlbuquerqueJournal reports, they are “gaining momentum,” but according to Speaker Egolf are “unlikely to happen” because all of the surplus money has been “spoken for” by the various agencies.

HJR 1 to tap permanent fund is again moving in the session, but a leading expert from the center/left Brookings Institute throws some cold water on the idea that pre-K is going to work wonders for New Mexico students.

HB 173 which would massively increase New Mexico’s gas tax moves forward.

SB 110 which is a massive giveaway of power to government employee labor unions passes Senate Public Affairs Committee. Is this the unions’ a quid pro quo for pension reform?

A federal judge has ruled against the Rio Grande Foundation in its suit over donor disclosure in the battle over Santa Fe’s soda tax saying that we didn’t prove we were harmed. The Foundation has already appealed.

Last week on January 29, after 18 months of waiting for a decision, we lost our case (at least temporarily).

As you recall, the Rio Grande Foundation was engaged with the City of Santa Fe in litigation over donor privacy, stemming from Mayor Javier Gonzales’ push for the now-infamous soda tax.

We lost the first round of litigation at District Court because we could not demonstrate actual threats of reprisals against the Foundation and our donors. That’s because the Rio Grande Foundation was never threatened. What we alleged is that the law would chill our speech because we were reasonably afraid of reprisals against our donors.

Typically, the threats come after the disclosure, and by then the horse has left the proverbial barn. Under the First Amendment, you don’t have to be threatened before your speech is chilled. A reasonable fear is generally sufficient. Indeed, we did show that similar groups have suffered similar threats, which is what the Tenth Circuit has required in other cases. The judge attempts to characterize her decision as being in accordance with Tenth Circuit precedent, but it’s clear she’s worried about it.

Our trial judge in this case never held oral argument, then sat on any decision for over a year-and-a-half. Neither the Foundation nor our legal counsel ever even met her, which is extremely uncommon in a case that reaches a decision on the merits.

No need to fear: the Rio Grande Foundation is moving forward in appealing the decision to a higher court. We’re not giving up the fight for donor privacy.

So, onward to the Tenth Circuit, where we ought to have better odds. We will keep you updated on our progress!

Rep. Matthew McQueen has introduced HB 173 (which passed its first committee) in the 2020 Legislature. According to the analysis linked to above, would more nearly triple the New Mexico gas tax between now and 2026. It would raise taxes on motorists by more than $300 million annually.

The gas tax is now 17 cents per gallon. Under the plan it would rise to 47 cents per gallon AND be indexed to increase with inflation every year after that.

This terrible piece of legislation was opposed in its first committee by all Republicans who should universally oppose this massive cash grab. Of course, we at the Rio Grande Foundation  spoke out in opposition to raising the gas tax way back in November of 2019. You can read the full article including numerous ideas for improving New Mexico roads here.

As if a massive tax hike isn’t enough, with the other hand the Legislature and Gov. Lujan Grisham are pushing for SB 2 which would provide tax credits for owners of electric vehicles.  SB 2 does have a Republican co-sponsor, but the bill is a top priority of the Gov. and many Democrats.

Electric vehicle subsidies are disproportionately beneficial to the rich. In fact, according to this study, about 90% of federal EV tax credits went to the top 20% of income earners.  Gov. Lujan Grisham and the Democrats pushing this idea need to be exposed for pushing this giveaway to the rich.

On this week’s discussion Paul interviews Kenneth Costello. Costello analyzes New Mexico’s rapidly changing utility regulatory structure for the Rio Grande Foundation. He has conducted extensive research and written on a wide variety of topics related to the energy industries and public utility regulation.

Ken and Paul discuss what makes utility regulation unique and some of the history of regulation in New Mexico including the flirtation with deregulation and what ultimately killed it. Paul and Ken of course discuss current trends in utility regulation including the Energy Transition Act and what will happen next in electricity in the State.

You can read one of Ken’s recent articles which took on the Energy Transition Act here.

A number of bi-partisan bills have been introduced in the New Mexico Legislature to reduce or eliminate taxes on Social Security. As the folks at Think New Mexico note, New Mexico is one of 13 states that tax benefits provided under the program. And, while reform to New Mexico’s gross receipts tax remains the Rio Grande Foundation’s top economic policy priority, we strongly believe that taxpayers should participate in the current budgetary largess.

As this Albuquerque Journal article notes, the initiative is “gaining momentum,” but unlikely to happen this year according to Speaker Egolf because all of the surplus money has been “spoken for” by the various agencies.

I t has always been the view of the Rio Grande Foundation that when it comes to receiving the benefit of good economic and budgetary times that taxpayers tend to come last. This is just the first public and clear acknowledgement of that from the folks in charge.

The General Fund is set to grow from $6.3 billion to $7.8 billion since Susana Martinez left office. And what are taxpayers getting? They got a tax hike last year and not even crumbs this year. If they lived in Colorado where they have strict spending and taxation limits in place, taxpayers would come first, not last.

The Rio Grande strongly supports pension reforms in the form of SB 72 in the 2020 Legislature.  But, there are serious issues with the pension system including the level of benefits provided by the PERA system.

The following chart which is from PERA itself shows that 9,744 former New Mexico public employees will receive lifetime payouts in excess of $1 million. It is one thing for former government employees to be comfortable in retirement, but nearly 10,000 beneficiaries receiving over $1 million in lifetime benefits seems excessive.

Also, as the following document from PERA notes, there is a big problem with NOT acting right now to address the issues with the pension plan. We agree with their conclusion, SB 72 is a reasonable compromise.

The Brookings pension report cited above can be found here.

Supporters of “early childhood” programs (with the largest portion dedicated to Pre-K) would love to have New Mexicans believe that their plan HJR 1 will solve all of our State’s problems.

We can save an entire generation of children from a life of poverty.
We can invest 1% of our $20 billion land grant fund, which would generate $175 million for ECE programs. Why Not? #nmleg @RepMoe @NMHouseDems @NMSenDemocrats https://t.co/YknTI6Cg0U

— Rep. Javier Martínez (@JavierForNM) January 25, 2020

The reality is far different once you actually study the data and talk to experts. Take Grover “Russ”Whitehurst of the center/left Brookings Institute. He studied pension reforms for decades and wrote the following in “Does Pre-K Improve Children’s Achievement” a paper released in July of 2018.

The strongest evidence on elementary school impacts of state pre-K would come in the form of randomized trials of scaled-up state pre-K programs with follow-up of children in the treatment and controls groups as they progress through elementary school. There is only one such study: Children of parents seeking enrollment of their children in the Tennessee Voluntary Pre-K Program (TVPK) were randomly assigned to be admitted to the program or not. Outcomes have been tracked through third grade. The

findings as described by the authors in their peer-reviewed report of the study are that:

• positive achievement effects at the end of pre-K reversed and began favoring the control children by 2nd and 3rd grade;

• TVPK participants had more disciplinary infractions and special education placements by 3rd grade than control children; and

• no effects of VPK were found on attendance or retention in the later grades.

Whitehurst concludes his paper with the following quote, “Putting nearly all our eggs in the same basket — enhancing access to state pre-K for four-year-olds – shows little evidence to date of having a substantive payoff in later school achievement. It is time for enthusiasts for increased investments in state pre-K to confront the evidence that it does not enhance student achievement meaningfully. They need to temper their enthusiasm for more of the same and, instead, support testing of other approaches that appear promising.”

Paul was up in Santa Fe last week talking pension reform along with Len Gilroy, a pension expert with Reason Foundation (episode 121). Unfortunately there are a number of RGF priorities already being pushed aside.

SB 110 is an early candidate for worst bill of 2020.

Taxpayers Bill of Rights Bill introduced as HJR 5 by Rep. Rod Montoya. How is it different or similar to what Colorado has?  Rep. Javier Martinez is now the co-chair and heir apparent as chair of the powerful House Tax and Revenue Committee. What does this mean for New Mexico tax and economic policy moving forward?

Paul discusses serious concerns with the proposed Route 66 Visitors Center in Albuquerque and how the finances just don’t add up.

Finally, oil prices are down significantly since early January. We don’t know if they are destined to go lower or if this will be a sustained drop, but the change in oil prices could have a big impact on New Mexico.

The following appeared in the Santa Fe New Mexican on Saturday, January 25, 2020.

Over the last few weeks leading up to the 2020 legislative session, an all too rare alignment has occurred in New Mexico—the Governor, legislators from both parties, labor and taxpayer representatives, plan managers and other stakeholders in Santa Fe all agree that it is time to reform the state’s largest public pension system.

New Mexico’s Public Employees Retirement Association (PERA) has amassed over $6 billion in unfunded pension liabilities and has become vulnerable to volatile investment markets. The Governor’s PERA Solvency Task Force recognized the growing unfunded liability problem and acknowledged the need to fully pay for state promises by making PERA a fully funded system within 25 years a top priority. The resulting task force recommendations mainly increase contributions and address a broken cost-of-living-adjustment policy that served more as annual pension bonuses than it did a protection against inflation.

The proposed reforms are a great first step towards addressing the debt currently looming over the state budget. However, there remains more work to do, as the current legislation would do little to address the systemic assumptions and policies that led to debt accumulating in the first place, mainly a lack of protections against market volatility, overly optimistic actuarial assumptions, and letting the political process—not actuarial math—determine annual pension contribution rates.

Consider that while passing the proposed legislation would generate a one-time reduction in unfunded liabilities by an estimated $700 million, in fiscal year 2019 alone the unfunded liability increased by $600 million due mostly to underperforming investments and insufficient contributions.

While the legislature continues to reject plan actuary recommendations and rely on bureaucratic statutes to determine its contribution to PERA, assets will continue to depend on high market returns to make up for subtle dips and losses. The debt is also still likely to grow due to PERA maintaining market assumptions that even PERA forecast only give a 60% chance of coming to fruition. Some more long-term market forecast view PERA’s chances at less than 50/50.

If there’s a future where market returns may not be as rosy in the past, we need to plan for it now by saving more and adopting more conservative assumptions. Otherwise, PERA will continue to accrue unfunded liabilities to be borne by tomorrow’s taxpayers and public employees since both are ultimately responsible for making the contributions needed to ensure that accrued benefits are fully paid to retirees. If contributions are not increased today, even higher increases will be required tomorrow.

It’s no wonder why public employers are struggling to attract top talent away from the private sector. New Mexico promises retirement benefits at the end of a full career then neglects to fund those benefits at adequate levels to where unfunded liabilities grow. This trend can produce rising debt payments and stagnant wages as limited state budget resources are reallocated to meet immediate needs.

The proposed reform aims to prevent that dynamic from persisting, or at least start the process. As important of a first step towards shoring up PERA’s long-term solvency the proposal is, to avoid growing state pension debt in the future will require both PERA and Educational Retirement Board (ERB) stakeholders to work towards adopting more conservative actuarial assumptions, pay down pension debt faster, and create attractive retirement plans for what is likely to be an increasingly professionally-mobile future workforce.

Reforming a broken cost-of-living-adjustment and increasing contributions are great ways to begin addressing the PERA unfunded liability. The legislature can also harness this rare bi-partisan cooperation to strengthen the task force recommendations by also addressing the systemic risk associated with high investment expectations and statutory contribution policies that will continue to generate unfunded liability unless reformed.  The Governor, legislative leaders and numerous stakeholders are all right, the time to reform PERA is now.

Gessing is president of New Mexico’s free market think tank, Rio Grande Foundation and Gilroy is vice president for government reform at Reason Foundation, a think tank focusing on free minds and free markets

Two of Gov. Lujan Grisham’s top lieutenants make the case in Sunday’s Albuquerque Journal for “saving” a healthy chunk of New Mexico’s oil and gas windfall. This post is going to discuss the issue and the pros and cons of the policy.

The recommendation is to dedicate money to both the State reserve fund (truly a “rainy day” fund) and a new, revenue-generating early childhood education trust fund. Based on our assumptions about what will actually happen in the 2020 session, building the rainy day fund is likely the best of a bad set of alternatives (more spending). Given the lack of willingness in the Legislature for tax reform or cuts, it would appear that simply deferring spending in the form of a rainy day fund would be worthwhile.

The same cannot be said for the new “early childhood” permanent fund. Because this fund is going to be dedicated to future wasteful spending, it is no better (or worse) than simply spending the money now.  More importantly, the new fund will have its own financial demands with needed sources of revenue and the obvious impetus for additional spending on wasteful early childhood programs (mostly pre-K as that is the most costly intervention).

Finally, it must be stated clearly that governments are not the same as individuals when it comes to saving money. For individuals, saving is inherently a good thing. We work for a limited period of time and then plan to retire on those (invested) savings.  While New Mexico’s “rainy day fund” attempts to even out future cash flows, the State of New Mexico and its residents would be better off if the State “invested” some of its money in good times in reforming its tax code and making New Mexico a more economically-diversified and attractive State for investment and living.

With the Foundation preparing for the 2020 legislative session, we haven’t been as focused on local policy issues like the proposed Route 66 Visitors Center on the Western edge of Albuquerque.

Thankfully, the Albuquerque Journal’s editorial board has been looking out for the taxpayers on this latest big-government scheme from the local political classes led by County Commissioner Steven Michael Quezada and City Councilor Klarissa Peña.

Here is the editorial in which the Journal makes several salient points about the proposed $12.2 million project (all tax dollars) which will require tens of thousands of tax dollars every year in operating subsidies.

In true New Mexico fashion, the proposed facility would use taxpayer dollars to compete against private sector (unsubsidized) providers in providing a taproom, banquet center, and  showing movies.

Having traveled Historical Route 66 myself, I have personally visited several of the many museums dedicated to the “Mother Road” that stretches from  Santa Monica to Chicago. Most of those museums seem to be privately owned and managed. Why should local taxpayers be asked to put up millions of dollars for a project that will, if it comes into service, compete with local businesses.

If the City and County want to see more business perhaps they should do a better job of addressing crime, taxes, and permitting problems that make our area relatively hostile to business. Maybe they could just bulldoze the ART project as a bonus!!!

The Rio Grande Foundation spent a day in the Roundhouse this week discussing pension reform with New Mexico policymakers. But, when you get in the halls of the Roundhouse you find out about a number of issues and where things stand. Here’s what we’re hearing on a few of the big issues we’re looking at this session:

1. The Foundation’s top priority, GRT reform (an issue discussed by Speaker Egolf prior to the session), is not going to happen.
2. It is looking like a real uphill battle for Social Security tax reduction/elimination. Gov. Lujan Grisham didn’t include it in her budget and there just doesn’t seem to be much momentum among the Democrats for returning money to the taxpayers.
3. Pension reform is likely the best opportunity for bi-partisan reform although plenty of lawmakers are nervous about doing this in an election year.
4. “Free” college will be an opportunity for the somewhat more conservative Senate Democrats to exert some influence. Will they give in to the Gov.’s plans to offer this new “entitlement” or will they demand the money be used more wisely or not be spent at all? The Governor’s plan started out at $35 million, but according to the LFC the  cost of the plan will be $49 million (an increase of 40%) and the session is just getting started.

On this week’s interview podcast Paul talks to New Mexico Rep. Larry Scott. Scott lives in Hobbs and represents Lea County in the Legislature. He is also in the oil and gas industry. In the first part of the show Paul and Larry discuss the 2020 New Mexico legislative session and what might happen in terms of both good and bad economic policies.

And, since Larry has a front row seat for the oil boom in the Permian Basin, Paul and Larry discuss the boom, it’s impact on the region, and its impact on New Mexico as a whole. Will the boom continue? Is the Legislature’s spending unsustainable? Where are things heading for the future of New Mexico’s most important industry?

In any New Mexico legislative session you THINK you know what to expect during the session based on the agenda laid out by the Gov. But then you actually get into the session and you realize that any number of bills, often under the radar, could have a major, usually negative, impact if adopted.

The first candidate for this “honor” in 2020 is Sen. Mimi Stewart’s SB 110 which would totally revamp the operations of government employee unions in New Mexico. Stewart is best known as a shill for what we at the Foundation often describe as the “Education Blob.”   The “blob” is basically the status quo in K-12 education, but with more money.

SB 110 would give government unions a great deal more power in New Mexico if adopted. Here are a few of the big changes in the bill:

While the Rio Grande Foundation will be working on a lot of issues in the 2020 Legislature that are at odds with Gov. Lujan Grisham and majority Democrats, one potential area for free market conservatives and Democrats to come to an agreement is on pension reform.

To her credit, Gov. Lujan Grisham has put PERA reform on the agenda during the 2020 session. SB 72 introduced by Sen. Munoz is the reform legislation, but our analysis of the legislation which was done by the experts at Reason Foundation can be found here. 

While the reforms are not perfect, they are far better than inaction. The Rio Grande Foundation has also produced an “explainer” video on the pension reform issue that can be found below:

The following article appeared in the 2020 legislative preview edition of New Mexico Indepth.  You can read the full paper online or by picking up a copy at the Roundhouse in Santa Fe.

In economic policy terms New Mexico’s 2019 Session was a disaster. Massive expansion of film subsidies, new mandates on electricity generation, a higher minimum wage mandate, tax hikes, and 12 percent spending growth were the lowlights.

Of course, with fast-growing oil production and a strong national economy, New Mexico’s economy remains strong and surplus revenue will again be available when the Legislature convenes in January.

At the Rio Grande Foundation, we see numerous opportunities for bipartisan reform, but 2020 could also result in another spending binge that does nothing to address the systemic policy problems facing our State.

The most obvious opportunity is gross receipts tax reform. This must involve lowering rates and elimination of taxes of services provided by contractors and other business inputs. These taxes can be avoided by purchasing services (like bookkeeping and web hosting) from out-of-state providers in order to avoid the GRT which is applied at rates above 7.5% in most New Mexico communities.

Sadly, in 2019 the Legislature eagerly imposed GRT on several businesses, consumers, and industries. These included non-profit managers of Los Alamos National Lab, non-profit hospitals, and purchases made over the Internet.

But, the GRT remained unchanged in any systemic way. Rates remain high and the problem of taxing business inputs and “pyramiding” remains unchanged. With a billion dollar surplus available and both Gov. Lujan Grisham and Speaker Egolf making noise about tax reform, now is the time to act. And, while details may vary, the general model outlined in bipartisan legislation introduced by Rep. Jason Harper (R) and Sen. John Arthur-Smith (D) remains the logical framework for reform.

Another bipartisan reform opportunity should include public employee pensions (specifically PERA and ERB). Gov. Lujan Grisham should be applauded for naming a task force to take a serious look at PERA which covers public workers NOT employed in the education system (and thus covered by ERB). Given its weaker financial position and importance to public education budgets, ERB deserves a similar look.

Both systems are seriously underfunded, a situation which must be addressed. Also, both need to be updated to better serve the 21st Century work force. Colorado and other states have successfully done this. New public employees in New Mexico should be offered more portable benefit options outside of the traditional pension system, which rewards longevity as opposed to those who may want to “give back” for a few years and then move on to other career goals as younger workers wish to do these days. Both types of employees should have retirement options that work for them.

Finally, there is the issue of occupational licensure reform. Bipartisan legislation (SB 385) made its way to the Governor’s desk in 2019 only to be vetoed. We hope to make another push to address the unnecessary obstacles licensing often puts in the way of willing workers and willing customers/employers.

While there is potential common ground for economic reform in 2020, there are numerous serious issues, particularly with the Gov’s proposal for “free” college. Here are two:

• • While the oil boom as perked up the State economy in recent years, job opportunities are still more diverse, plentiful, and generally better-paying in neighboring states. Absent economic reforms (see GRT discussion above) how can we be sure that “free” college will actually benefit New Mexico’s economy?

• • New Mexico’s biggest education challenge is the performance of its K-12 system. Absent much more ambitious reforms than those currently being discussed to raise student outcomes “free” college won’t do much good.

While this oil boom is driven by production as opposed to prices, all good things eventually come to an end. What happens when oil prices or production decline due to environmental concerns, the global economy, technological advances, or some other unforeseen change?

This 30 day session will go a long way to determining New Mexico’s economic future.

Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is 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 discussion podcast Wally and Paul discuss the fact that Rep. Rod Montoya has introduced Taxpayers Bill of Rights legislation (an important policy goal of the Rio Grande Foundation) in the New Mexico Legislature.

Notably, according to data known as the Gini Coefficient which tracks inequality, “progressive” New Mexico is not only poorer than Colorado and our other neighbors, it is also more unequal.

RGF shares its perspective on MLG budget in a recent Channel 7 story.

The New Mexico Oil and Gas Association has released further data on just how big the oil and gas boom is and how much it is benefiting New Mexico’s economy. Paul and Wally discuss.

Paul and Wally have looked through the list of pre-filed bills and discuss some of the really bad and some of the good bills to be considered in the 2020 session.