Errors of Enchantment

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RGF talks repeal of NM’s Social Security tax

12.21.2020

The Rio Grande Foundation backs legislative efforts to repeal the Social Security tax imposed by New Mexico. ANY effort to reduce New Mexicans’ tax burdens would help.

The following article includes several quotes from RGF’s Paul Gessing regarding the City of Carlsbad recently joined the call for repeal of this unnecessary tax. I discuss the chances of such a proposal making its way into law in the article linked above from the Current-Argus.

New Mexico is one of only 13 states that currently assess tax on Social Security income. Unfortunately, New Mexico’s Democrats have moved quite a bit to the left since even the days of Bill Richardson.

RGF’s Paul Gessing talks New Mexico politics and policy w/ Mick Rich

12.21.2020

The following conversation between RGF president Paul Gessing and Mick Rich (former US Senate candidate and owner of a construction business) aired on local television in Albuquerque, NM recently. It is split into four segments of about 10 minutes apiece.

In the first segment Mick and Paul discuss health care reforms made under ObamaCare, why it has failed, and how Biden plans to move forward with the same government-driven philosophy.

In segment two we discuss the evolution and economics of New Mexico’s film industry and its oil and gas industry.

In the third segment we discuss some of the crime issues at play in the City of Albuquerque.

In this segment we discuss the upcoming 2021 legislative session, the Rail Runner, Spaceport, and five things the Legislature SHOULD do to bring prosperity to our state.

Deb Haaland’s interesting take on climate change

12.18.2020

Scientists widely agree that climate change is real. After all, we’ve had ice ages and other major climate shifts over millions of years. And then humans came along. Native Americans managed their environment. In the story below which is from the Los Alamos Monitor and ran in August 2019 Haaland claims that “climate change in the US started when Europeans arrived and started killing the buffalo.”

It’s an interesting take. There is no doubt that killing the bison was a tragedy and undoubtedly had an impact on the climate. That said, I hope the Senate takes a hard look at her views and whether she has scientific underpinnings for her policy views on how to manage federal lands.

A brief Rio Grande Foundation Analysis of PFM report on New Mexico’s tax structure (Part 2)

12.17.2020

Yesterday we said we’d get an analysis of the PFM report on New Mexico’s tax code. As indicated in that post, there is some good information in the report even though we disagree with many of its findings. One of the best points made is the following which is taken directly from the report:Too often the only “equity” discussion that takes place is over “progressive” or “regressive” taxation. The PFM report acknowledges that New Mexico’s gross receipts tax is unfair to competing businesses within the same industries. As the text above points out this bias assists bigger firms and penalizes smaller ones.

Overall, the analysts seemed concern about the gross receipts and specifically argued for NOT raising rates on that tax. Unfortunately, that’s where the restraint went out the window. The report FAILED to mention New Mexico’s heavy (existing) tax burden (7th-highest as a percent of income) and bloated and inefficient government, yet it included numerous MAJOR tax hikes and NO tax cuts. The tax hikes mentioned included:

    • Higher marginal rates at higher income levels.
    • Eliminating the capital gains personal income tax exemption.
    • Re-institute an estate tax.
    • Increase the gas tax rate.
    • Establish a structure for taxing recreational marijuana (we support the policy, but of course this is still more government revenue).
    • Broaden the gross receipts tax base to include food and, for lower income taxpayers while enacting a revenue neutral refundable personal income tax credit.
    • Continue to expand excise taxes to align with new forms of goods or services, such as vapor products.
    • Consider a carbon tax or so-called “market-based approaches.”

While there are elements of some of these ideas that could be part of a broad-based, revenue-neutral tax reform plan, including “shifting greater local funding responsibility to property taxes and away from gross receipts taxes” the report is WAY too focused on generating more money for the State and focuses far too little on spurring economic growth and job creation.

Finally, although the overall report is lacking, one additional bit of good news is that PFM specifically calls out film subsidies. Again, the full text is below directly from the report:

 

Tipping Point New Mexico episode 258: Dr. Deane Waldman – The Response to COVID-19 and How to Improve U.S. Healthcare System

12.17.2020

On this week’s interview, Paul has a wide-ranging discussion on health care issues with Dr. Deane Waldman. Deane is a retired pediatric cardiologist and is an MBA as well. During the first half of the show, he and Paul discuss the response to COVID-19 in the United States and New Mexico. With a background in pathology, Deane has a great deal of information to share about the Virus and its impacts.

In the second part of the show, Dr. Deane and Paul discuss Joe Biden’s plans for American health care, most notably Medicare for All, more broadly speaking. What will Biden’s policies do to American health care if adopted? Be sure to tune in to this fascinating and informative episode.

087 Dr. Deane Waldman - How to Improve US Healthcare | Rio Grande Foundation

Haaland would be far to the left of Lujan Grisham on energy

12.17.2020

UPDATE: Per several news reports, Haaland HAS indeed been chosen to head the US Department of the Interior.

New Mexico women appear to have the inside track in the Biden Administration for Interior Secretary. The post was apparently offered to Gov. Lujan Grisham who turned it down. Now, Albuquerque-area Congresswoman Deb Haaland is being promoted for the job by none other than Speaker Nancy Pelosi.

We at the Rio Grande Foundation have been critics of Lujan Grisham’s economic and COVID policies, but on energy issues, Lujan Grisham is actually a moderate while Haaland is on the far-left wing when it comes to energy issues. If implemented, her stated policies would be a disaster for New Mexico and other energy producing states.

Haaland told The Guardian, “I am wholeheartedly against fracking and drilling on public lands,” she said. She is also a staunch supporter of the Green New Deal.” According to a recent study of the issue, “New Mexico would see even steeper revenue losses under the study’s forecasts. The state would lose on average $946 million per year in oil and gas tax revenue in the first five years under a lease moratorium, and on average $1.2 billion per year in tax revenue in the first five years under a drilling ban.”

Lujan Grisham, on the other hand, voted FOR crude oil exports when she was in Congress. She also has said that she’ll ask for an exemption from any future drilling ban (on federal lands). While Lujan Grisham has said that New Mexico would “transition away from fossil fuels” and she even signed New Mexico’s own version of a “Green New Deal,” she is nowhere near as radical as Deb Haaland when it comes to energy.

If Haaland becomes Secretary of the Interior, energy-producing Western states better watch out!

We didn't wait for the feds': How New Mexico worked to contain Covid - POLITICO

 

A brief Rio Grande Foundation Analysis of PFM report on New Mexico’s tax structure (Part 1)

12.16.2020

Yesterday, a report called “State of New Mexico Tax Structure: Issues and Alternatives”was released by a firm called PFM Consulting. The report is worthy of a detailed analysis and it has generated several stories in the media. 

A few initial thoughts: 1) I’m glad they posted the report at a link that can be easily-accessed by the public and policymakers. 2) As these documents go it is relatively accessible in terms of its language. 3) Taxes are a very important component of public policy, BUT they are one of several policy areas that must be addressed to make New Mexico economically competitive. 4) Analysts and legislators of differing backgrounds can view the same data and have completely different conclusions. While the media have covered some reactions from policymakers, we will offer our insights in a 2nd post to be published tomorrow (December 17).

Here are a few charts taken directly from the report which illustrate New Mexico’s serious economic challenges:

  1. Over the last decade New Mexico’s neighbors saw much faster employment growth although we did outperform Alaska and Wyoming which the report includes by way of further comparison.

2. New Mexico faces deeper poverty challenges than any of its neighbors or Wyoming/Alaska.

3. Related to poverty, New Mexico’s median incomes lag. 

Left wing lobbyist: “tax cuts hurt the economy”

12.16.2020

Whatever your take on the Trump tax cuts or the economy under his watch, it is hard to see how ANYONE can blame the President for the current economic situation. Of course leave it to New Mexico’s leftist advocates like Bill Jordan to do that.

And, whether you think tax cuts are the key to economic growth or merely one component of a broad-based economic reform strategy, not many economists take the position that “tax cuts HURT the economy.” Bill really needs to read “Economics in One Lesson.”

Tipping Point New Mexico episode 257: Failure at Spaceport, COVID-19 Vaccine, Rationing Care and More

12.15.2020

On this week’s Tipping Point discussion Paul and Wally discuss the fact that electors in the nation’s Electoral College were casting their votes for president. The Electoral College is an important safeguard of our democratic-republic.

Good news for New Mexico and the US as the Pfizer COVID 19 vaccine has begun shipping across the USA including to New Mexico. President Trump and his Administration deserve great credit for this achievement as do the scientists at Pfizer and other companies.

New Mexico hospitals authorized to “ration” care. What does this mean?

ABQ City Council pushes sick leave vote back to February 1.

NM’s PED secretary says “I think we’re going to be back in person in the fall of 2021.” 

NM’s jobs situation remains among the nation’s worst according to Wallethub. 

Another failure to launch at Spaceport America. Saturday morning’s test flight was aborted because its rocket engine failed to ignite, but the crew made it back to the spaceport safely.

PED secretary strongly implies most NM students won’t return to in-person learning until next fall

12.15.2020

In a true case of “burying the lede” as they say in journalism (yes, it is lede), this story from the Albuquerque Journal discusses the State’s education budget proposal for the upcoming legislative session being “near-flat.”

But, if you read the full article there is this gem from Secretary Ryan Stewart, “I think we’re going to be back in person in the fall of 2021. It all depends on the course of the virus and what the risks are going forward.”

Many New Mexico parents hold out hope of restarting in-person learning sometime this spring (and if you are in a conservative rural community or another area that has done in-person learning this year like Rio Rancho) that may be true, but Stewart seems to be referring to big districts like Albuquerque and Las Cruces which have NOT had in-person learning for a vast majority of students this year.

Secretary Betsy DeVos on Twitter: "“It's now October. We are starting to get an evidence-based picture of how school reopenings and remote learning are going… the evidence is pointing in one direction.

New Mexico’s Netflix ‘Deal’ A Blow To State’s Finances

12.15.2020

 

 

This article appeared in the Roswell Daily-Record on December 15, 2020 and in several other New Mexico newspapers.

New Mexico remains among the most locked down states in the nation when it comes to the CoronaVirus. In October the State’s unemployment rate was among the highest in the nation at 8.1%. This difficult economic news combined with the election of a more “progressive” Legislature in November mean that tax increases (and even spending cuts) are likely in store for the upcoming 2021 legislative session. With New Mexico relying heavily on oil and gas revenues, the State’s economic pain will last beyond the coming year.

A new deal announced by Gov. Lujan Grisham with the well-known streaming service Netflix is being touted as good news for New Mexico’s economy. In announcing the deal the Gov. claimed, “My administration has expanded our state’s competitive film incentives, facilitating higher-wage employment for New Mexicans all across the state.” Under the terms of the deal, Netflix will dramatically-expand their footprint in the State spending $1 billion over the next decade.

Unfortunately, despite all the hype and big-sounding numbers, the Netflix deal is just another example of New Mexico’s economically-ignorant political leadership “buying” jobs and economic activity with taxpayer money. The reality is that New Mexico’s already strapped budgets will be drained even more in the years ahead by this new plan to subsidize Hollywood.

Something that too few in the media do is look closely at the particulars of the deal itself. For example: the State offers a 25% film “tax credit” which is really a rebate of 25% of the costs of production. Netflix is able to boost that rebate by another 5% since they are considered a “qualified” production facility.  That means taxpayers will reimburse Netflix for 30% of their spending in NM. According to a new report from the Legislative Finance Committee (LFC) states that film subsidy payouts could increase annual tax credit payouts by $25 million beginning next fiscal year.

Lest there be any doubt that film subsidies actually cost the State and its taxpayers money, a separate 2019 LFC report  noted, “Because film tax credit payouts are booked to Corporate Income Tax (CIT), actual CIT receipts are higher than the final amounts distributed to the general fund.” These subsidies take corporate tax dollars right out of the State Treasury and hand them to film companies.

“Tax credits” are just the starting point. Additionally, the State is providing $17 million in LEDA incentives; the City of Albuquerque is providing another $7 million in LEDA, and they will also provide an industrial revenue bond to abate some or all property taxes over a 20-year term for the first $500 million investment to build out the facility.

In total Netflix will receive $300 million + $17 million + $7 million + the IRB tax abatement to eliminate their property taxes.

Finally, even though NM has an annual cap on film tax rebate expenditures, the legislation exempted companies that purchase or sign a 10-year lease for a qualified production facility: this means the cap does not apply to Netflix.

In other words, Netflix is definitely going to grow and appear to create more jobs in New Mexico (which will make a lot of headlines), but it will do so at taxpayer expense. That cost is not just in lost revenue, but in actual spending. Those costs, generated through the tax credit, really a rebate, are borne primarily by State taxpayers. This subsidy is both unfair AND unsustainable.

Governor Michelle Lujan Grisham has now locked us in to paying Netflix outrageous sums of money over the next decade at a time of great uncertainty for New Mexico families and the state’s economic outlook.

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

Netflix

Podcast rewind: when space expert expressed concerns about Virgin Galactic’s engine technology on RGF podcast

12.14.2020

You may have heard the news by now that over the weekend Virgin Galactic aborted a launch at Spaceport America. The issue had to do with a failure to complete “The ignition sequence for the rocket motor.” Thankfully no deaths or injuries were involved, but it is likely that this will further delay any commercial space flights from Southern New Mexico.

As Doug Messier of commercial space flight website Parabolic Arc noted in a 2019 Tipping Point NM podcast (the engine/technology discussion starts at about the 36 minute mark below). The issue with the engines involves the motors which burn a combination of nitrous oxide and rubber.

You can also check Doug’s website Parabolic Arc for coverage of the attempted Virgin Galactic flight here. By the way, at the end of the podcast Doug says he would NOT fly with Virgin Galactic even if given a FREE ticket. 

Virgin Galactic makes first flight from New Mexico site

Tipping Point New Mexico episode 256: Homeschooling in New Mexico in the Era of COVID-19

12.10.2020

On this very special interview episode, Paul sits down with his wife Krista and 10-year-old (5th-grade) daughter Grace. This isn’t just Paul showing off his family, rather, they have a serious conversation about homeschooling in New Mexico. With the onset of COVID-19, the Gessing family had some very serious questions to answer about educating their children. In the end, that meant homeschooling.

Krista outlines some of the important decisions the family made along with any requirements from the State of New Mexico. Grace shares her perspective on suddenly moving into a homeschool environment including her likes and dislikes about both types of schooling.

MLG’s locked down New Mexico continues to face dire unemployment situation according to Wallethub report

12.10.2020

According to Wallethub’s latest report (released December 10, 2020), New Mexico remains mired in a deep hole when it comes to unemployment. Wallethub changed the data from previous reports to focus on those that have increased the most.

Only Kansas has performed worse than New Mexico, but Kansas had a lower unemployment rate beforehand. In other words, New Mexico is uniquely challenged.

Source: WalletHub

What I saw in Scottsdale, AZ

12.09.2020

New Mexicans, especially those who have never lived elsewhere, often fail to realize just how culturally AND geographically isolated they are. That seems to play into the hands of politicians like our Gov. whose policies fail (repeatedly) but those policy failures are often chalked up to some inherent challenge we face in New Mexico OR people are simply unaware of the issue because they don’t know any better.

The Gov.’s lockdown response to COVID 19 has been an abject failure both in terms of the Virus itself AND in economic terms. The Gessing family recently traveled to Arizona which, while it has a somewhat higher death rate than New Mexico, is also much more open and has been for the duration. Other neighboring states like Utah, Texas, Colorado, Oklahoma, and Utah are more OPEN than New Mexico and have fewer deaths as a percentage of the population. The fact is that no one has figured out a way to stop the spread.

Our travels took us to the Great Wolf Lodge which is basically an indoor water park with other kid-friendly activities including a small bowling alley, a ropes course, an arcade, and more.

Here’s what we saw:

  1. We drove to Scottsdale, not for Virus reasons, but for convenience and cost. Scottsdale was much more open and busy which included dining indoors at an In & Out Burger;
  2. Social distancing and masks were used in the lobby, but masks were NOT worn in water areas. The water areas were full of kids having fun, socializing, and exercising;
  3. The water area was almost entirely indoors and included an area that is virtually identical to a similar area at Cliff’s Amusement Park in Albuquerque which is outdoors and has been shut down since March thanks to MLG.
  4. All five of us were virus-free when we traveled to Scottsdale and I was tested after returning (for other reasons) and came back negative. No illness reported by any member of the family.

We were careful. I understand that the Virus impacts different people differently. My wife and I are grown ups who can make our own decisions. We’re NOT going to cower in fear for a year or more instilling such fear in our children. I know of no major outbreaks at this or other such Great Wolf Lodges across the country. Maybe it’s the chlorine?

Tipping Point NM episode 255: Governor Lujan Grisham to Stay in New Mexico, COVID Red, Yellow and Green and More

12.08.2020

On this week’s podcast conversation, Paul and Wally discuss the fact that Gov. MLG is NOT heading to DC after all. What happened and what does it mean?

The Gov. unveiled a new red, yellow, green COVID system. Under these orders it appears New Mexicans will be severely restricted until a vaccine is widely-deployed.

An ordinance was introduced at Albuquerque’s City Council that would have added significant teeth in the form of jail time and fines to the local health orders. Thankfully, that ordinance was pulled from consideration.

Paul’s family recently traveled to Scottsdale. Here’s what they saw.

RGF recently appeared in National Review to discuss Joe Biden’s energy policies.

Finally, according to a new report from McKinsey Consulting poor/minority students are suffering most from shift to remote learning.

Categories

Rio Grande Foundation in the news on paid sick leave AND public health order enforcement

12.08.2020

In case you missed it, Albuquerque’s City Council recently punted on TWO big issues. RGF discussed both issues with KOB TV channel 4. You can watch the discussion relating to fines and even jail time for disobeying the public health order below.

And, RGF and the local business community has engaged in a the issue of mandatory paid sick leave. The Council (again) pushed the final vote to at least February 1, 2021.

On energy policy Biden should take his cues from Obama

12.08.2020

The following appeared recently in several New Mexico newspapers including the Carlsbad Current-Argus:


As states near the election certification date it appears the exact contours of the Biden Administration’s energy policies and how they will impact New Mexico remain open to debate. We must make sure that we don’t lose sight of how important natural gas has been in powering America’s economic resurgence and leading the charge to a cleaner environment.

Candidate Biden made numerous conflicting statements about his likely energy policies including on the issue of hydraulic fracturing or “fracking” which enables oil and gas producers to access previously inaccessible oil and gas sources. Elimination of this important process, even on “just” federal lands would have devastating impacts on New Mexico’s oil and gas industry and its economy.

During the campaign Biden repeatedly pledged not to lease any more federal land for oil and gas production. That pledge, with its potential to cast irreparable damage on our economy, got the attention of Democratic Governor Michel Lujan-Grisham. Last year the Governor wasted no time in announcing she would apply for a waiver or exemption for New Mexico on a federal ban aimed at crippling the oil and gas industry’s ability to fund public education. Gov. Lujan-Grisham should maintain this position and make sure New Mexico is allowed to continue our development of natural gas on public land.

Biden’s old boss, President Obama also understood the need to support oil and gas activity in oil and gas states, particularly activity surrounding natural gas. Obama was of course considered an environmentalist by political opponents and supporters alike. His support for natural gas was hardly contradictory, rather it was right in line with his environmental track record. That’s because natural gas emits CO2 at rates from 50 to 60% lower than does coal. 

In fact, the Energy Information Administration recently found that “U.S. electric power sector emissions have fallen 33% from their peak in 2007.” This was no coincidence or accident. These emissions reductions occurred because electricity consumers have increasingly sourced natural gas instead of coal. This progress would be reversed as a result of a federal leasing ban.

When it comes to energy and the benefits of home-grown natural gas resources, Biden should take his cue from former President Obama and the expressed wishes of Gov. Lujan Grisham. New Mexico energy, produced on federal, state, and private lands, can and should play an integral role in ongoing reductions to CO2 emissions.

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

Study: poor, Hispanic, Black students suffering most from forced shift to remote instruction

12.06.2020

According to a new report from McKinsey & company that was written up in The Economist, (surprising no one), poor and minority kids are losing out the most from the shift away from in-person learning.  See chart below.
As we’ve written about in the past, numerous experts have stated clearly that in-person schooling should be reinstated for students around the glob. New Mexico’s supposed advocates for “the children” are nowhere to be found advocating for these children. RGF recently called out Speaker Egolf for his lack of a public stance on the issue, but  he’s hardly alone.

New Mexico has literally dozens of well-funded left-wing advocacy organizations. We have not seen a single one of them advocate publicly for the reinstatement of in-person learning. If you know of any that have, please send us a note: info@riograndefoundation.org.

Monday is the day for City of Albuquerque sick leave vote

12.04.2020

After some delays, the full Albuquerque City Council will meet on Monday, December 7 for a potential final vote on mandatory paid sick leave.

Tell ABQ City Council The Time is NOT Right for More RegulationsWe know that COVID 19 has impacted all of us, not just our bottom lines, but our friends, families, and employees. We’ve heard “We’re all in this together.” If that is truly the case (with the State having enacted an even stricter lockdown of businesses), now is definitely not the time for Albuquerque’s City Council to force more heavy-handed regulations on struggling local businesses.

Click Here to Email the City Council
If the button above doesn’t work, click here or copy this url: https://p2a.co/FbwTGM1

Yet again, City of Albuquerque Councilors, Lan Sena and Patrick Davis are proposing a paid sick leave mandate.

This bill has already been defeated three times—once by Albuquerque voters themselves.

The ongoing COVID situation should not be an excuse to impose more costs on local businesses. At the beginning of the coronavirus outbreak congress passed the Families First Coronavirus Response Act (FFCRA) which requires employers with less than 500 employees to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. This paid leave is then paid back to the employer by the Federal Government. This requirement is effective through December 31, 2020, and likely to be extended with the next federal relief package.

Because of the recent shutdowns, businesses have been holding off payments on mortgages, leases, utilities, suppliers, car, and house payments for months. Many have exhausted their savings to survive and are approaching bankruptcy. Many businesses will try to reopen but fail because they used all of their cash to buy inventory or rehire their employees. Now is not the time for ANOTHER costly government mandate!

It’s time for City Councilors to focus on initiatives that will get Albuquerque on the path of economic recovery. Don’t let them destroy our future. NOW IS NOT THE TIME!

Click Here to Email the City Council

Biden Energy Policies Will Make Blue New Mexico See Red

12.02.2020

 

 

The following appeared at National Review’s website on December 1, 2020 6:30 AM

The former territorial governor of New Mexico (and author of Ben Hur) Lew Wallace once said, “Every calculation based on experience elsewhere fails in New Mexico.”

In so many ways Wallace was prescient about this beautiful, poor, and utterly unique state in the American Southwest. One “calculation” about modern politics that would perplex Wallace is the fact that a relatively poor, but oil-rich Western state elects politicians that are so directly at odds with its economic best interest.

After Texas and North Dakota, New Mexico is the 3rd– state in the US. The oil and gas industries combine to generate Furthermore, New Mexico’s oil and gas resources are heavily concentrated on lands managed by the federal government. The central role of energy, especially energy extracted within New Mexico’s borders and controlled by federal policymakers, might lead one to believe that New Mexicans would vote for pro-energy Republicans in federal elections.

Instead, New Mexico has become a safely blue state. It narrowly went for George W. Bush in 2004, but since then has gone for Democrats by wide margins. The situation is even more stark at the state level where Democrats have had “trifectas” (total control of both houses and the Governor’s mansion for 60 of the last 90 years. The GOP hasn’t had such governing authority in the State for a single year since 1931. Also, despite significant turnover, New Mexico has not elected a Republican to the US Senate since Pete Domenici retired in 2009. In 2020 Biden won the State 54.3 percent to 43.5 percent despite the very real fact that President Trump’s pro-energy policies were a boon to the New Mexico economy and the Biden Administration’s energy policies represents nothing less than a dagger aimed at the heart of New Mexico’s economy.

That “dagger” comes in the form of numerous, sometimes clear, often conflicting statements, candidate Biden made during the campaign. It is unclear what Biden will do regarding hydraulic fracturing or “fracking” which enables oil and gas producers to access previously-inaccessible oil and gas sources. He backed away from an outright nationwide ban late in the campaign. However, Biden has clearly stated that he would ban new gas and oil permits — including fracking — on federal lands.

Targeting federal lands would devastate New Mexico’s oil and gas industry and its economy due to the State’s large federal estate within its borders. According to the Institute for Energy Research, federal land represents 34.7 percent of the land in New Mexico. In fiscal year 2019, New Mexico received energy-related disbursement (from the federal Bureau of Land Management) at $1.17 billion, the highest payment made in any state (Wyoming was next with $641 million, and then Colorado on $108 million) This was the highest payment from the BLM in the state’s history and compares with $455 million in FY 2017. A vast majority of this increased revenue is due to the use of fracking.

Furthermore, data from the Global Energy Institute indicate that if energy production on federal lands were banned, New Mexico would lose 24,300 jobs (10,000 direct, 14,300 indirect and induced), a significant hit for a state with a workforce of around ). Making matters worse, a good number of the ‘direct’ jobs lost are good-paying, something that is not easy to find in New Mexico, a state that consistently ranks among the poorest in the nation and has been hard-hit by the     Closing New Mexico’s federal lands to energy production entirely  cost the State $496 million in annual royalty collections, representing eight percent of the state’s total General Fund Revenues.

Biden’s proposed fracking ban is even too much for New Mexico’s Democratic Governor Michelle Lujan Grisham has said she’ll ask for an exemption from any future drilling ban. Acknowledging the tax revenue contributions to education funding, Grisham explained to the New Mexico Oil and Gas Association conference in Santa Fe last October that “without the energy effort in this state, no one gets to make education the top priority.”

Far from being an opponent, Lujan Grisham, a Democrat, is broadly supportive of Biden’s energy policies. Both of them have stated that they would like to “transition out of fossil fuels” despite New Mexico’s financial dependence on the Industry.

Biden’s aggressive anti-fossil fuels stance as relates to federal land not only puts him at odds with New Mexico’s Democratic governor (who is also on the short list to join his administration), it puts him far to the left of President Obama on the issue. In a 2012 presidential debate, Obama  stated, “We’ve opened up public lands.  We’re actually drilling more on public lands than the previous administration… And natural gas isn’t just appearing magically; we’re encouraging it and working with the industry.”

President Obama was of course considered an environmentalist by political opponents and supporters alike. His support for natural gas right isn’t difficult to reconcile with his environmental track record. That’s because (when used in a new power plant) natural gas emits CO2 at rates from 50 to 60 percent  than does coal.

Obama understood the vast benefits of natural gas, including the fact that it was appropriate to drill for it on federal lands. During his tenure, from approximately 21 million cubic feet to more than 28.4 million cubic feet.

If he truly cares about the environment, Biden would be wise to follow his predecessor’s playbook. According to the EPA, more natural gas meant net greenhouse gas emissions went down by 10 percent  from 2005 to 2018.  But if natural gas prices rise – and a ban on federal leasing is likely to contribute to higher prices, this  positive developments could go into reverse.  The Energy Information Administration recently projected that higher natural gas prices would cause coal’s share of power generation to increase from 18 percent to 22 percent in 2021.

Obama also signed into law legislation that ended the US government’s restrictions on crude oil exports back in 2015.

During the campaign Biden faced tremendous pressure from the left wing of his political base to come out for policies like the Green New Deal and bans on fracking and other fossil fuel based energy production. Biden has never been associated with such hard-left stances against economic policy and growth in the past. As noted above, even Obama is to the right of where Biden campaigned.

Hopefully President Biden has a more realistic approach to energy than did candidate Biden. New Mexico’s economic future is at stake, but so is the recovery of our nation’s virus-hobbled economy.

Rather than instituting a blanket ban on production of oil and gas on federal lands, a better approach would be to recognize the benefits, and work to make sure that any production is handled responsibly and safely. The growing American energy sector and American energy independence have delivered wins for the environment, for consumers, and for the US and state economies like New Mexico’s. Let’s keep it that way.

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

 

 

 

 

 

 

 

 

 

 

Tipping Point NM episode 253: Grocery Lines, Netflix, Special Session and More

12.02.2020

On this week’s podcast, Paul and Wally discuss the fact that New Mexico made national news for its grocery lines. 

Netflix gets an amazing sweetheart deal to come to New Mexico (Wally and Paul discuss the details).

New Mexico’s special session disperses money, but not without controversy.

The latest Wallethub report shows just how bad New Mexico’s economy is.

Bernalillo County recently passed a Community Workforce Agreement (aka project labor agreement) which mandates union control over labor on public works projects. On the first major such project, the County is NOT implementing the CWA…because it might increase costs. Just as we said.

Tipping Point New Mexico episode 252 Patrick Brenner – Highlights and Challenges of Past Year

11.28.2020

On this week’s interview podcast, Paul talks to the Rio Grande Foundation’s own Patrick Brenner. Among Patrick’s many duties with the Foundation is fundraising, graphic design, maintaining and increasing our presence on the Internet, and public records.

With Giving Tuesday right around the corner and 2020 (blessedly) coming to a close, Patrick and Paul appraise the Foundation’s efforts during the past year and discuss some of the highlights and challenges for both the Foundation as well as the State of New Mexico of this strange and difficult year.