Like the movie “Groundhog Day,” New Mexico’s Democrats keep recycling the same “jobs plan” and calling it something new. As Sen. Clemente Sanchez outlined in today’s Albuquerque Journal, the latest and greatest plan boils down to the following (with a critique of each):

• Broadband expansion: there are ways to reduce regulation that will result in greater broadband deployment, but the Democrats’ plans involve spending more of your tax dollars to deploy broadband, not peeling back regulations;

• Increase Capital outlay spending: Literally this is taking money out of one pocket and putting it in the other and calling it economic growth. Government infrastructure spending must first be taxed away from another productive source;

• Minimum wage increase: Most of New Mexico’s major cities and the counties they are in (Albuquerque, Santa Fe, and Las Cruces) all have minimum wages well-above the federal minimum. One would be hard-pressed to find any positive impact on the economies of these cities. To claim raising the minimum wage will create jobs is just asinine; 

• Industrial hemp research: It is unclear how “hemp research” will be an economic boon, but it is possible that hemp production could create some jobs and productive economic activity. This is the one solid proposal in the Democrats’ plan, but as this article points out, hemp is a water-intensive crop and the economic benefits are rather limited;

Source: Carolyn L. Yocom, “Medicaid: CMS Has Taken Steps, but Further Efforts Are Needed to Control Improper Payments, Testimony Before the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, House of Representatives, January 31, 2017

There are at least a dozen solid reasons why New Mexico should not have expanded Medicaid under Obamacare, but earlier this week, an analyst from the Government Accountability Office raised a seldom-discussed issue with the state-federal healthcare program for “the poor.”

Carolyn L. Yocom, the GAO’s director of health care, testified before Congress that in “fiscal year 2016, improper payments totaled an estimated 10.5 percent … of federal Medicaid expenditures.”

D.C. considers payments improper when federal “funds go to the wrong recipient,” a recipient “receives the incorrect amount of funds,” there is no documentation “to support a payment,” or a recipient uses “funds in an improper manner.” Despite the oversight entities depicted in the graphic above, Medicaid’s improper payments are rising, from $29 billion in 2015 to $36 billion in 2016. (If Yocom has added states’ share of Medicaid spending, the total figure would have reached $60 billion.)

The GAO has “identified four key program integrity issues for the Medicaid program”:

* Eligibility determination is dysfunctional, with “gaps” in government’s ability ensure that only appropriate individuals are enrolled. In addition, beneficiaries have “payments made on their behalf concurrently by two or more states” and payments are made “for claims that were dated after a beneficiary’s death.”

* Oversight of managed care, which handles over “half of all Medicaid beneficiaries,” is weak. The improper-payment rate for providers is “currently less than one percent,” but the estimate “is based on a review of the payments made to managed care organizations and does not review any underlying medical documentation.”

* Ineligible providers are allowed to participate in the program. Bureaucrats access information that is “fragmented across 22 databases managed by 15 different federal agencies to screen providers,” but the databases “did not always have unique identifiers.” As a result, “providers with suspended or revoked licenses, improper mailing addresses, or deceased providers” are paid.

* Individuals are enrolled in Medicaid as well as Obamacare’s subsidized exchanges. Despite “procedures designed to prevent duplicate coverage, it [is] occurring.” The Centers for Medicare & Medicaid Services “has not developed a plan for assessing whether … procedures are sufficient to prevent and detect duplicate coverage.”

With Medicaid “serving” an estimated 44 percent of New Mexico’s population by the end of the current fiscal year, one can only wonder how many taxpayer dollars the program squanders in the Land of Enchantment.

It looks like Bernalillo County, at long last, will be getting its own office building, PNM’s former Alvarado Square office building. We honestly are okay with this as long as that means vacating other office buildings and putting the space back on the market (and possibly back on the tax rolls).

From all appearances, the County seems to be getting a smoking deal and that’s welcome news for County taxpayers. The latest asking price of $2.7 million is a whopping 75% reduction relative to the original $11 million list price for the building.

But, as with any silver lining around here, there is a massive grey cloud looming. That massive price cut is a pretty strong indicator that Albuquerque’s downtown office market is extremely soft and that big companies are not exactly clamoring to obtain office space in downtown Albuquerque which is of course, New Mexico’s largest City.

Meanwhile, in economically-booming Denver, the City’s tallest new skyscraper in 30 years is on pace to open in 2018. Any bets on when Albuquerque’s next skyscraper will be constructed?

The Foundation is tracking announcements of expansions, relocations, and greenfield investments published on Area Development‘s website. Founded in 1965, the publication “is considered the leading executive magazine covering corporate site selection and relocation. … Area Development is published quarterly and has 60,000 mailed copies.” In an explanation to the Foundation, its editor wrote that items for Area Development‘s announcements listing are “culled from RSS feeds and press releases that are emailed to us from various sources, including economic development organizations, PR agencies, businesses, etc. We usually highlight ones that represent large numbers of new jobs and/or investment in industrial projects.”

In January, of 16,358 projected jobs, 12,321 — 75.3 percent — were slated for right-to-work (RTW) states:

As for the sub-metrics the Foundation scrutinizes:

* Seventeen domestic companies based in non-RTW states announced investments in RTW states. Zero announcements went the other way.

* RTW prevailed in foreign direct investment, too. Fifteen projects are headed to RTW states, with three to occur in a non-RTW state.

Marquee RTW investments included:

* Forrester Research announced a new office for “inside sales and support” in Tennessee (120 jobs)

* Mueller Industries picked Utah to site a production plant for “copper tube products” (125 jobs)

* Sterilite Corporation, “the largest plastic housewares company in North America,” invested $73 million in a “manufacturing and distribution facility” in Iowa (500 jobs)

Methodological specifics:

* All job estimates — “up to,” “as many as,” “about” — were taken at face value, for RTW and non-RTW states alike.

* If an announcement did not make an employment projection, efforts were made to obtain an estimate from newspaper articles and/or press releases from additional sources.

* If no job figure could be found anywhere, the project was not counted, whether it was a RTW or non-RTW state.

* Non-border-crossing relocations were not counted, border-crossing relocations were.

New Mexico’s AFT has been very active on social media in opposing President Trump’s Education Secretary Betsy DeVos.

They hate DeVos for one simple reason: she supports broad-based government policies aimed at increasing school choice. Every other objection is mere window-dressing.

The AFT touts itself as a “union of professionals,” but is the AFT really an organization that we should trust to make policies for educating our children? I happened to drop by the “Center for Progress and Justice” in Santa Fe a Democrat/liberal epicenter on Cerillos Road just south of St. Francis.

As seen below (a view from the road), the AFT has a presence there. I believe they have offices in the facility and they use it as it was the site of an event with their national boss Randi Weingarten when she visited New Mexico to stump for Hillary Clinton.

As other pictures show (taken of the south-facing wall), the Center for Progress and Justice is no ordinary “center-left” outfit. If anything, from reading the writing on the wall, I’d call their “workers of the world awaken” rhetoric closer to Marxist:

All of this may not change the views we hold of AFT which, like most unions tends to support leftist/Democrat causes “uber alles,” but the fact that they are willing to post their signs in front of a facility that touts such hard-left rhetoric should give us all pause when considering AFT as an arbiter of education policy both nationally and here in New Mexico.

With all the talk about “ethics” and “good government” lately in Santa Fe, Errors of Enchantment has noticed that one reform has yet to pop on lawmakers’ radar screen: taxpayer-funded lobbying.

It’s a problem from coast to coast, but anyone who keeps an eye on politics and policy in the Land of Enchantment knows how pervasive subsidized advocacy here can be. Case in point: an email sent last week from the New Mexico Tourism Department.

The screen capture above indicates how the bureaucracy’s Heather Briganti used her state-provided email account to urge “partners” to show their “support for the department’s budget request” at a rescheduled hearing of the House Appropriations and Finance Committee.

There’s no law against what Briganti did. And she could have gone much further. As the National Conference of State Legislatures notes, New Mexico is one of many states that does not “prohibit state agencies from using public funds to retain a lobbyist.”

But just because something is legal doesn’t make it right. Jefferson wrote that to “compel a man to furnish contributions of money for the propagation of opinions which he disbelieves, is sinful and tyrannical.” Where do New Mexico’s legislators stand on the issue?

Run across a “public” entity using taxpayer dollars to lobby the legislature? Let us know!

The Rio Grande Foundation fully expects to play a lot of “defense” against the deluge of big-government bills moving through the 2017 legislative session. That said, we have worked on a few bills that, if enacted, could improve New Mexico’s economy and promote freedom. All readers are hereby encouraged to contact their legislators in support of these various bills:

HB 213 “Repeal Public Works Minimum Wage Act” would repeal New Mexico’s prevailing wage on construction projects that arbitrarily drives up the cost of roads and schools;

HB 228 “Right to Try” would allow terminally ill patients to try certain drugs not approved by the FDA;

HB 264 “Access to Dental Care Act” would allow for mid-level dental providers called “dental therapists” to practice in rural areas of New Mexico;

HB 226 “Minor Party Candidate Nominating Signatures” would make the signature requirement for 3rd party candidates similar to those for major party candidates thus making New Mexico’s elections more accessible and competitive;

SB 202 “Forfeiture Changes” would make some needed changes and improvements to New Mexico’s landmark 2015 civil asset forfeiture legislation.

HB 275 “Public Private Partnerships Act” Would create a framework under which government could contract with businesses in order to increase/improve the availability of public assets including but not limited to roads and infrastructure.

Find your legislators and their contact information here. You can find out how the RGF is rating bills in real time here.

Watch this space for additional developments and information. Other “pans” are in the fire.

RGF is always looking for ways to reduce state spending and make government more efficient and transparent. The organization’s president Paul Gessing appeared on KOB TV Channel 4 to discuss how procurement reforms and enhanced competition could save money during tough budget times.

A version of this op-ed ran in the Albuquerque Journal on January 30, 2017.

Herbert Hoover.

The name is synonymous with indifferent right-wingery in the face of desperate need for “progressive” change.

Earlier this month, Alan Weber, who in 2014 failed to secure the Democratic nomination to run against New Mexico’s incumbent governor, wailed about “the Herbert Hoover policies of the Martinez administration.” Weber and his ilk are crafting a narrative they think will help them achieve legislative victories: New Mexico’s many woes are due to the cruel, anti-government policies pursued by Susana Martinez. The answer to the state’s dismal condition is to go back to a progressive future — and a repeal of her misguided cut in the corporate tax is a good place to start.

But how much change has the governor brought to public policy in New Mexico? Looking at the record, it’s quite clear that it has been mostly business as usual in Santa Fe since Martinez took office. The major reforms that conservatives, libertarians, and free-market voices advocate at the state level have fared very poorly in the last six years:

Tax Cuts: Martinez did sign a modest, multi-year reduction in the corporate tax. But the levy is a miniscule revenue-producer for the state — even before the phase-down, its share of state-raised taxes was in the mid-single digits. (And as the New Mexico Tax Research Institute noted, the revenue raised by the tax is “somewhat volatile and often fickle.”) Most workers in the Land of Enchantment’s private sector are employed by firms that do not pay the corporate tax, but pass their profits through to owners/investors, who are taxed on their income.

Tax/Expenditure Limits: Alone in our region, New Mexico has no limit on the taxes it can impose, and no cap on how much state government can spend. And it’s probably not a coincidence that expenditures are excessive. In 2014, the most recent year for which U.S. Census Bureau data are available, per capita spending was $8,495 — dwarfing our neighbors Oklahoma ($6,028), Utah ($5,790), Colorado ($5,722), Arizona ($4,937), and Texas ($4,843).

Right to Work: It’s indisputable that ending compulsory unionism can be a major factor in boosting economic development. A right-to-work law means job growth and incomes, once adjusted for purchasing power, that surpass those in states without labor freedom. But right to work is dead in Santa Fe — at least until a new crop of legislators is elected.

School Choice: The value of a skilled workforce is another driver of investment and job-creation. Recognizing the failures of a monopolized, unionized education “system,” many states have moved toward K-12 competition. New Mexico has not joined in. Its charter-school law is weak, vouchers are nonexistent, and no tax credits are available for donations to scholarship-granting charities. Even the left-leaning Brookings Institution gives the state’s largest school district a “D” on its “Education Choice and Competition Index.”

Regulations: New Mexico has some of the most burdensome occupational-licensing rules in the nation. But despite an emerging left-right consensus on the need for reform, there has been no progress on cutting the red tape that hinders many people’s ability to earn a livelihood. The prevailing-wage mandate, which limits the contractors that can bid on public construction and thus drives up costs to taxpayers, remains stubbornly resistant to reform, much less repeal. And competition in the electricity market, adopted by a wide margin of Nevada’s voters in November, has no champion in Santa Fe.

Healthcare: In perhaps the state’s worst public-policy blunder in decades, Martinez fell for the claim that a radical broadening of Medicaid eligibility would be both affordable and serve as a “economic stimulus.” Her decision surely pleased liberals, but we now know what a disaster expansion has been. Enrollment soared past expectations, the bills are enormous, and the boost to the economy never arrived.

Has the red-state model really been implemented under Susana Martinez? It certainly doesn’t appear so. Maybe the answer to New Mexico’s twin crises of fiscal strife and economic carnage is to finally implement a policy programme geared toward limiting government and spreading opportunity.

D. Dowd Muska is research director of New Mexico’s Rio Grande Foundation, 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.

The Albuquerque Journal had another useful and depressing article about the sorry state of the New Mexico economy in Sunday’s paper.  There were several interesting aspects to the story. For starters, I know Michael Coleman is the Journal’s DC reporter, but talking to the Congressional delegation about the State of New Mexico’s economy is like talking to the average New Mexico legislator about relations with Russia or Egypt. It’s simply not in their wheel house (and it showed).

Gov. Martinez’s spokesman at least provided a reasonable analysis: basically, the Gov.’s spokesman noted that NM has always relied on DC and oil/gas prices and that those have not been as reliable as in the past. The argument that sequestration is to blame for NM’s woes is somewhat laughable, but other than that it is close to the truth. I truly wonder where was this line of argument was during the 2016 election when Martinez lost her majority in the NM House and saw Republicans lose several seats in the Senate.

But, when compared to Sen. Udall and Rep. Ben Ray Lujan, Gov. Martinez’ response looks positively brilliant.

Udall who trotted out the usual liberal hobby-horses: early childhood education, improved health care (he must have forgotten that nearly 50% of NM’s population is on Medicaid thanks to Medicaid expansion), and economic diversification (whatever that means). All I can say is that he should definitely stay in Washington and not run for Governor where he could do real damage.

Rep. Ben Ray Lujan claims high-speed internet access, job training, and education are the keys to success. No data supports his or Udall’s statements, but that’s the point. These guys are clueless.

One thing that would help is for New Mexico to embrace a “right to work” law as 27 states have now done, but they oppose this reform for reasons of ideology and self-interest.

Alas, given the current political situation in the Legislature, New Mexico will continue to hemorrhage people and will continue to send economic illiterates to Washington. If we keep losing population, perhaps we’ll someday send one less economic illiterate to Washington.

A former mayor of Albuquerque wrote an article defending the district for its poor academic performance. His basic thesis being: poverty makes it impossible for the District to perform as well as other, more economically-prosperous districts.

All I can say is “wow” and that this is the type of defeatist attitude that has led New Mexico to its current sorry state. We can’t develop our economy because we are too isolated and don’t have enough water (to name a few issues). We can’t educate our kids because we our too poor. I guess we should just give up.

The fact is that school choice has repeatedly been shown in empirical analyses to improve student outcomes, but APS has opposed choice and worked in the Legislature to oppose it.

The Democrat-controlled Legislature is in session RIGHT NOW. They COULD adopt school choice to help fix the situation right now. They won’t, not because it doesn’t work, but because of politics and the fact that too many New Mexicans have accepted the lie that we are somehow too poor to succeed.

Still don’t believe that poverty can be overcome? Look at the international PISA test results and see how many countries far poorer than the USA are beating us educationally:

The hand-wringing has begun. America’s new chief executive has signed off on a hiring freeze for the federal government, and predictably, New Mexico’s establishment is panicking.

In the Santa Fe New Mexican, U.S. Sen. Tom Udall whined that hiring freezes “hurt the American people and cost the taxpayers more money,” while Big Labor bigwig Jon Hendry wailed that the president “can’t expect to do everything he is expecting us to accomplish on a national basis and not give us resources to do it. There is no logic to that.”

A right-sizing of the federal bureaucracy — civilian staffers and contractors — is long overdue. But wherever one stands ideologically and politically, there’s no question that New Mexico is particularly susceptible to changes in federal personnel policy. The most recent analysis by the Fiscal Federalism Initiative of the Pew Charitable Trusts found that cash from D.C. accounts for a jaw-dropping 32.1 percent of the state’s gross domestic product. That’s more than double the figures for economic-development dynamos Texas (14.2 percent) and Utah (15.5 percent), and well above the comparable shares for Colorado (17.0 percent), Oklahoma (21.8 percent), and Arizona (24.4 percent).

New Mexico’s governor and state lawmakers should see the hiring freeze as an opportunity — a chance to finally adopt proven policies that will establish, once and for all, a vibrant private sector in the Land of Enchantment. Will they? Well, there’s always the 2019 session….

In one of his first official acts since ringing in the New Year on the Plaza, Santa Fe Mayor Javier Gonzales revealed his New Year’s resolution: to impose a new tax on Santa Fe residents (the bill is expected to be introduced at tonight’s Council meeting). Despite recently praising himself in interviews for not raising taxes, Mayor Gonzales is expected to call a special election for a one cent per ounce tax on a wide range of beverages such as soda, energy drinks, lemonade, iced tea and even almond milk.

A Rio Grande Foundation analysis of records and communications released under the Inspection of Public Information Act, along with media reports and other publicly available documents concluded that the mayor has been less than forthcoming about his desire to impose new taxes on Santa Feans.

“From the outset, Mayor Gonzales has desired more taxes to fuel more government spending,” Paul Gessing, president of the Rio Grande Foundation, said. “Our analysis exposes the absurdity of him using tax hikes to masquerade as a public health crusader instead of a typical tax-and-spend politician.”

The analysis can be found on the following pages. Among the key findings:

• Mayor Gonzales misled the public about his intention to impose a beverage tax from the start.
• Mayor Gonzales’ community experts rejected his tax, calling it “the worst thing we could do.”
• Mayor Gonzales’ assertion that his soda tax will bring in $10 million annually is a fantasy.

Additionally, this beverage tax will significantly increase the cost of doing business for retailers, and almost all consumers will see higher grocery bills. Low income residents will bear the brunt of Mayor Gonzales’ regressive new tax.

“Just as his community experts did, Santa Fe city councilors should reject this proposal and say ‘No Taxation on Carbonation,’” Gessing said.

Examining records and communications released under the Inspection of Public Information Act (and currently available at Santa Fe City Hall), along with media reports and other public records, the Rio Grande Foundation arrived at the following conclusions regarding Santa Fe Mayor Javier Gonzales’ proposal to impose a one cent per ounce tax on sweetened beverages:

• A beverage tax was the intended outcome of the mayor’s resolution to “explore active ways of reducing sugar intake” among Santa Fe residents
  • Before the resolution was made public, Santa Fe Legislative Liaison Jesse Guillén called a tax on sugary drinks “a good place to start.” The mayor seemingly agreed and replied with an article about taxing beverages.
    https://postimg.org/image/a9vi3xfb/
  • Days later, model legislation of a beverage tax similar to the mayor’s proposal was circulated among the mayor and his top-level staff
    https://postimg.org/image/stt5q4svl/

• Mayor Gonzales misled the public about his intention to impose a beverage tax from the start
  • In response to questions from the Albuquerque Journal spurred by the Rio Grande Foundation, the mayor directly denied his resolution lays the “groundwork” for a beverage tax, even though internal emails show plans for one were already in the works.
    https://postimg.org/image/j57x0mgm7/
  • Afterward, the Rio Grande Foundation warned, “don’t buy the mayor’s claim that his resolution “‘doesn’t lay the groundwork for anything but a healthier community.’ Taxing soda has become an idée fixe for the left’s unsleeping army of lifestyle police.”
  • While the resolution was in the draft phase, Guillén suggested removing a reference to taxes because it would “fan conspiracy flames.” We now know Rio Grande Foundation wasn’t chasing a conspiracy after all.
    https://postimg.org/image/48w2zmt0j/

• After his masquerade was rejected, Mayor Gonzales did an about-face: From public health to revenue
  • Gonzales initially said, “This is a public health issue and all we’re doing with this resolution is asking our community experts, the Santa Fe Food Policy Council, to study the issue and come back to us with some options… Once they do that, we’ll take a look at what they recommend, have our discussion and then decide what we do or do not support.”
  • Gonzales’ community experts determined that “education is key” to reducing sugar intake and “imposing additional taxes [soda tax] would be the worst thing they can do.”  https://postimg.org/image/scykdu3m9/ (full minutes)
  • Gonzales ignored their advice and announced his tax scheme two weeks later.
  • In an apparently retreat from his concern about sugar consumption, he claimed to support the beverage tax “[a]fter determining that small increases in property or gross receipts taxes wouldn’t raise enough” revenue.

• The mayor’s plan is built around a faulty economic premise
  • Mayor Gonzales said because his proposed tax is not a sales tax, prices for consumers won’t increase. The mayor doesn’t understand a basic economic principle: Businesses don’t pay taxes, people do.
  • In Philadelphia, where a similar tax took effect on January 1, “consumers appear to be bearing the full brunt” and some “are stupefied at the increased cost.”
• Mayor Gonzales’ assertion that his soda tax will bring in $10 million annually is a fantasy
  • A $.02 per ounce soda tax hike in is projected to bring in only $3.8 million each year in Boulder, Colorado, even though it is twice the rate of the Santa Fe proposal and Boulder is a more populous city.
  • Soft drink consumption in the United States has been on the decline for years, making beverage taxes an “unreliable and unsustainable revenue source,” according to the American Beverage Association.
  • This means revenues will likely need to be shored up year after year with additional taxes, such as the property tax or Gross Receipts Tax increases the mayor also considered.

Look at the bills scored so far on the Foundation’s 2017 Freedom Index, and it’s easy to get depressed.

Tax hikes, new regulations, higher minimum wages, abandonment of the Electoral College, more revenue devoted to “early childhood education” — it’s a grisly scene. (Elections have consequences.)

But one of the few bills that lands on the positive side is SB 5. Sponsored by Roswell’s Cliff Pirtle, the legislation promotes fiscal and individual responsibility, and earlier this month, the justification for the bill received a boost from an unlikely source.

Currently, beneficiaries of food stamps — more precisely, the Supplemental Nutrition Assistance Program (SNAP) — can use the vouchers to buy a wide range of groceries. Pirtle’s bill applies the restrictions placed on purchases under the Women, Infants, and Children program to food stamps. Baby formula, milk, peanut butter, fish, cheese, fruit /vegetable juices, and bread would be permitted, and SB 5 includes meat as well.

A cruel reform? Not according to a report commissioned by the U.S. Department of Agriculture. Researchers, examining transactions at a “leading grocery retailer,”  found that SNAP households spent 5.44 percent of their expenditures on soft drinks. That was more than milk (3.85 percent), fresh chicken (1.85 percent) water (1.17 percent), and potatoes (0.74 percent). Food-stamp “families” spent substantially more on soda than non-SNAP households, which held their liquid-candy bill down to 4.01 percent.

Source: “Foods Typically Purchased by Supplemental Nutrition Assistance Program (SNAP) Households,” Nutrition Assistance Program Report, Food and Nutrition Service, Office of Policy Support, U.S. Department of Agriculture, November 2016

Marion Nestle, a well-known (and liberal) professor of nutrition and food studies at New York University, told The New York Times that the finding is “pretty shocking,” and amounts to “a multibillion-dollar taxpayer subsidy of the soda industry.”

Agreed. That’s why reasonable (and public-health-promoting) restrictions on welfare are so important. Keep an eye on SB 5. It will indicate whether lawmakers in Santa Fe are serious about fiscal responsibility and fighting the obesity epidemic.

Update: “Five Democratic state senators banded together Tuesday to block a Republican bill aimed at prohibiting people on food stamps from buying soda, candy and other junk foods.”

New Mexico’s challenges keep getting more formidable. As bad as the current budget situation is, the tide of Medicaid costs coming at us due to the program’s expansion under ObamaCare is going to make balancing the budget even more challenging in the next few years.

According to the Federation of Tax Administrators, New Mexico’s tax burden as a percent of personal income is 10^th-highest in the nation and far in excess of neighboring states like Texas and even “blue” Colorado.

While State revenue has not grown in recent years due to the stagnant economy, New Mexico’s problem is not inadequate revenue.

New Mexico is also a big spender. According to the website USGovernmentspending.com, New Mexico’s state and local governments spent 25.03% of state GDP in 2016. That’s higher than all but three other states in the nation.

The data clearly indicate that New Mexico’s government taxes and spends adequately to fund the basic needs of government. To that end, Gov. Martinez should be applauded for her “no new taxes” stance which will surely be tested over her remaining time in office.

What New Mexico faces is one or more elected officials willing to put forth a plan to make difficult decisions over what spending is necessary and what spending should be eliminated as part of broader belt-tightening efforts.

Gov. Martinez is asking state employees to pay an additional 3.5 percent into their retirement plans. This is fine as far as it goes. No one has done more to show that working for New Mexico government is more lucrative than are similar private sector jobs. According to the American Enterprise Institute, New Mexico’s government workers earned a whopping 24 percent more than the folks who labor to pay their salaries (by far the widest disparity in our region).

Alas, this proposal is not going to fly in New Mexico’s Democrat-controlled Legislature. Compromise is needed if New Mexico’s government is to be right-sized. Martinez can hold the line on taxes, but only by putting some of the GOP’s “sacred cows” on the table as well.

These are mostly in the realm of “corporate welfare” programs like LEDA and JTIP, but they also include the tourism department and film subsidies. Unfortunately, film subsidies are one area of corporate welfare that most Democrats are fond of. Legalizing pot could also be a bargaining chip for Martinez. Legalizing and taxing pot could generate more than $50 million annually. Passing it legislatively as opposed to via Constitutional amendment (circumventing the Governor) could turn the money spigot on earlier, thus impacting the budget sooner.

There are no easy solutions to New Mexico’s budget mess. Raising taxes will further harm economic growth, thus hastening the departures of jobs and the very productive workers our State so desperately needs.

An alternative is tax reform. The Rio Grande Foundation has looked at the concepts put forth by Reps. Harper (R) and McCamley (D) and we like what we see. Eliminating “pyramiding” and taxes on business-to-business transactions is critical. That can be done by broadening the tax structure (eliminating exemptions and deductions including that on certain groceries) and lowering rates somewhat.

The aim should be “revenue-neutral” reform, but we are confident that the reforms as currently understood would make New Mexico a more attractive place for businesses, especially entrepreneurs and small businesses. At some point in the near future, this would lead to economic and revenue growth.

None of this will happen overnight even if reforms are agreed to this session (an uphill battle to say the least).

So, we are left with making painful cuts and tough decisions now and (hopefully) enacting long-overdue tax reforms that will bring about economic growth for the future. It is the best we can hope for in what will undoubtedly be a challenging 2017 session.

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

Exxon Mobil’s decision to invest billions of dollars to join “other oil firms in a race to build up drilling portfolios in West Texas and New Mexico” is good news for the Land of Enchantment’s fiscal condition.

As the above graph indicates, the price of a barrel of West Texas Intermediate is on the rise — up about 30 percent since the start of August. So in the short term, production in New Mexico, which peaked in May 2015, will rebound.

But for how long? Some speculate that higher oil prices are here to stay. That belief surely emboldens New Mexico’s leftists, who have no intention of implementing a long-overdue right-sizing of the state’s employees, agencies, and assets.

On the other hand, there are plenty of signs that the price run-up might stall, or even reverse course. In late November, OPEC did reach a deal to cut production, and it’s certainly had an impact. But as The Wall Street Journal noted, member countries “have a spotty record of enforcing their own agreements,” and there’s “no legally binding way to deter … cheating.” In addition, Libya is exempt from the deal, and earlier this month, the Journal reported that the nation has hiked its production “to a three-year high of 708,000 barrels a day … after having fallen to less than 200,000 barrels a day last year.”

Outside OPEC, the situation is even more chaotic. Not long after OPEC’s deal was reached, 11 non-members agreed to throttle back their pumping as well. But can Russia be trusted? Can Mexico? And what about the producers who have no intention of cuts? Earlier today, the International Energy Agency noted that “long-planned projects are coming on stream in Brazil and Canada and their combined production will rise by 415 kb/d this year.”

Speculating on the future of any commodity is a dicey business. But there appears to be at least as much reason to expect stability, or even decline, in the price of oil as there is to believe that another era of $100-per-barrel is right around the corner. New Mexico’s legislators and governor should budget accordingly.

ALBUQUERQUE — Lieutenant Governor John Sanchez and Secretary of Education Hanna Skandera will headline a rally of hundreds of students, parents, teachers, and community leaders to kick off School Choice Week in New Mexico.

School Choice Week 2017 kicks off in New Mexico with a program of student performances and remarks from political and community leaders at noon on Monday, January 23 in the rotunda of the State Capitol.

The goal of the event is to gather hundreds of school choice supporters from across the state to raise the profile of educational opportunity. The celebration is timed to coincide with National School Choice Week (January 22-28, 2017), which will feature more than 20,000 events across the country.

Said Rio Grande Foundation president Paul Gessing, “School Choice Week is an opportunity for us to call attention to the success and value of existing choices. We can also point out that New Mexico has a very long way to go to bring true choice to students of all income levels and backgrounds.” Noted Gessing, “In the 2017 legislative session, legislators will be considering whether to place an arbitrary moratorium on new charter schools.”

Event planners include the Rio Grande Foundation, New Mexico Coalition for Charter Schools, and LIBRE Institute. Students and officials from a variety of schools of choice will also be in attendance and performing or participating.

Held every January, National School Choice Week is an independent public awareness effort designed to shine a positive spotlight on effective education options for every child. Through more than 20,000 independently planned events across the country, National School Choice Week raises public awareness of all types of educational choices available to children. These options include traditional public schools, public charter schools, public magnet schools, online learning, private schools, and homeschooling.

The Rio Grande Foundation is New Mexico’s free market think tank. It has supported school choice in New Mexico since its founding in 2000.

Sometimes the media shows their bias if only accidentally and sometimes government bureaucrats reveal truths when it no longer matters. On both of those counts I found Washington Post columnist David Ignatius’ interview with Obama Secretary of Energy Ernest Moniz to be quite interesting and revealing.

For starters, Moniz, one of the leaders in an Administration that has spent eight years and wasted countless billions of dollars of What’s happening (with carbon emissions) is largely a market-driven phenomenon. We at the Rio Grande Foundation been saying that for years, so why burden the oil and gas industries, utility customers, and the US economy with massive and expensive new regulatory burdens?

Perhaps Obama’s policies were driven more by special interest politics and the green agenda than real concern over carbon emissions?

The whole article is worth a read, but the other fascinating part is Ignatius’ seeming assumption that President Trump WANTS to emit as much carbon as possible. I don’t know about Trump, but I know a lot of people sympathetic to his views on energy and not one of them WANTS to emit more carbon as an end-goal.

Trump and his supporters view government mandates and regulations as costly and ineffective (and it seems like Moniz is tacitly admitting as much) ways to address “climate change” which may or may not be a serious problem. So, would Moniz be so kind as to come out and say that the Clean Power Plan, Solyndra subsidies, ethanol, fuel emission standards, and the raft of other Obama-era policies are simply unnecessary as tools to reducing carbon emissions? A man can dream.

I like Gov. Martinez. She hasn’t raised taxes. She’s supported things like “Right to Work” and accountability in education. Unlike her predecessor she hasn’t saddled New Mexico with vanity projects like the Rail Runner and Spaceport. More importantly, she got elected Governor of a blue state…twice.

And that’s probably the biggest difference between her and a think tank CEO.

In her State of the State address yesterday, Martinez was relentlessly upbeat about both the economy and New Mexico’s education system. I just don’t see it. I actually agree with Democrat Sen. Joseph Cervantes who said the “state of the state” was “unacceptable.”

What gives? Despite having a Republican Governor for six years and a Republican House for two years, New Mexico remains a very “blue” state that has NEVER had conservative governance (unlike more economically-prosperous “blue” states like Colorado or even California).

So, my State of the State speech would have gone something like this (and this is probably why I’m not governor):

New Mexico has the 2nd highest unemployment rate. Our young people are fleeing. Dependency on the government is growing (in part due to my decision to expand Medaid under ObamaCare…oops). And, most sadly, 2016 will be remembered for as a year in which unspeakable acts were done to our children and our already-high crime rates rose dramatically.

For two years I supported and the Republican House passed bills to reform New Mexico’s failing economy and broken education system, but we were stopped at every turn by the Democrat-controlled Senate. In their infinite wisdom last November, rather than ridding us of an obstructionist Senate, voters instead chose “more of the same.”

I’ll spend the next two years trying to prevent further damage to our economy with my veto pen, but once I’m gone “all bets are off.”

Good luck New Mexico, you’ll need it.

Early voting is underway for Santa Fe Public Schools’ $100 million bond request, which will fund “high school facilities for programs in the applied sciences such as sustainable technologies, autotech, welding, science labs and more,” “construction of a new comprehensive middle school offering a greater variety of academic, extracurricular and arts programming,” and expansion of “energy and water conservation initiatives.”

The district admits that approval does indeed mean a property-tax increase — $80 a year, for a home with a $300,000 market value. But given the way that New Mexicans reflexively support any expenditures peddled as good for “the children,” don’t be surprised when voters, who can cast ballots until February 7, okay the bond.

If Rep. Javier Martínez (D-Albuquerque) has his way, bond approvals for “education” might become even more automatic. His HB 99 permits sixteen-year-olds to vote in school elections. Seriously.

It’s bad enough that government schools, at all levels, use taxpayer dollars to lobby for higher taxes and more spending. But sixteen-year-olds would be particularly susceptible to Big Education’s propaganda.

Throw in the fact that sixteen-year-olds don’t produce much of the revenue that covers their schools’ costs, and HB 99 should be of concern to all New Mexicans working for fiscal accountability, as well as school choice.

Martínez has garnered predictably positive coverage from The New York Times. The folks who’ll pay the bills for HB 99 might see his legislation differently.

(Albuquerque) The New Mexico Legislature’s “long” 60-day session begins today with ascendant Democrat majorities in both houses. While some of the faces may be different in Santa Fe, the Rio Grande Foundation will again be keeping an eye on legislation impacting YOUR freedom with its “Freedom Index” legislative tracking tool.

Lawmakers and the interested public can use the “Freedom Index” to get an independent, free market view of pending legislation. Moreover, voters can see whether their legislators are voting for free markets or for bigger government. Votes tallied are “floor” votes.

The most “pro-freedom” bills will receive positive scores as high as +8 while the most “anti-freedom” bills will receive negative scores as low as -8.

Users can see:

• The relative voting performance of legislators according to the Freedom Index;
• The relative voting performance of each party according to the Freedom Index;
• The analysis criteria behind the legislation ranking;
• Links to legislation detail;
• Links to legislator Information, including contact information;
• And selections of legislation by relevant categories.

Our analysis will be available before final votes on those bills that are analyzed and can be used by both legislators, legislative staff and interested voters to debate the merits of a bill.

Rio Grande Foundation president Paul Gessing said of his organization’s legislative tracking web site, “This legislative session takes place at a time of deep economic challenges for our State. It is more important than ever that we have an informed and engaged citizenry. The Freedom Index will help inform the policy debate in Santa Fe and around our State.”

Herbert Hoover.

The name is synonymous with indifferent right-wingery in the face of desperate need for “progressive” change.

Last week Alan Weber, who in 2014 failed to secure the Democratic nomination to run against New Mexico’s incumbent governor, wailed about “the Herbert Hoover policies of the Martinez administration.” That kind of rhetoric will only intensify, as the 2017 session gets underway, and disputes over fiscal and economic-development policies mount.

Weber and his ilk are crafting a narrative they think will help them achieve legislative victories. Their tale is simple: New Mexico’s many woes are due to the policies pursued by Susana Martinez. The answer to the state’s dismal condition is to go back to the future — and a repeal of Martinez’s misguided cut in the corporate tax, part of “an old ideology that gained prominence 40 years ago,” is a good place to start.

But how much change has the governor brought to public policy in New Mexico? Looking at the record, it’s quite clear that it’s been mostly business as usual in Santa Fe since January 2011, when Martinez took office. Here’s a brief list of the major reforms that conservatives, libertarians, and free-market voices advocate at the state level, and how they’ve fared in the last six years:

Tax Cuts: Martinez did sign a modest reduction in the corporate tax. But the levy has never been much of a revenue-producer for the state. Most workers in the Land of Enchantment’s private sector are employed by firms that do not pay the corporate tax, but pass their income through to owners/investors. Many states survive, and even thrive, without corporate taxes at all.

Tax/Expenditure Limits: Alone in our region, New Mexico has no limit on the revenue that its taxes can raise, and no cap on how much state government can spend. And it’s probably not a coincidence that expenditures in the Land of Enchantment are out of control. As the graph below, total spending dwarfs that of our five neighbors.

Source: U.S. Census Bureau data

Right to Work: Need this even be mentioned? We know that ending compulsory unionism can be a major factor in boosting economic development. But RTW is dead, dead, dead in Santa Fe — at least until a new crop of lawmakers is elected.

School Choice: The value of a skilled workforce is another driver of investment and job creation. Recognizing the failures of a monopolized, unionized education “system,” many states have moved toward K-12 competition. New Mexico has not joined in. Its charter-school law is weak, vouchers are nonexistent, and no tax credits are available for donations to scholarship-granting charities. Even the left-leaning Brookings Institution gives the state’s largest school district a “D” on its “Education Choice and Competition Index.”

Electricity Deregulation: Choice works with your power bill, too. But over a decade ago, an attempt to allow competition in electricity was repealed, and there does not appear to be any interest in reviving the law. In addition, a “renewable portfolio standard,” which mandates the use of expensive and intermittent sources of electricity, is the law in New Mexico. It’s at 15 percent now, and is slated to increase to 20 percent (!) in 2020.

Marijuana Legalization: Social conservatives might remain opposed to decriminalizing cannabis for personal use, but libertarians and many in the right’s fiscal community recognize the budget and economic benefits of ending a “war” that can’’t be won. Governor Martinez is opposed to legalization — a position she shares with many Republicans and Democrats, it’s worth noting.

Healthcare: In perhaps the worst public-policy decision made in the Land of Enchantment in the last few decades, Martinez fell for the claim that a radical broadening of Medicaid eligibility would be both affordable and serve as a “stimulus.” Her decision surely pleased the state’s liberals, but we now know what a disaster expansion has been.

So you make the call: Has the red-state model really been implemented under Susana Martinez? Errors of Enchantment certainly doesn’t think so. Maybe the answer to New Mexico’s crisis is to finally implement a policy programme geared toward limiting government, spreading opportunity, and fostering individual responsibility.

New Mexico’s education woes are well-documented. Low graduation rates and poor educational performance are the hallmarks of New Mexico’s government-run education system. This is why the Rio Grande Foundation has long-supported school choice in all of its varieties as a way to increase accountability and reduce bureaucratic inertia throughout the education system.

Unfortunately, when it comes to education in New Mexico, however, success simply puts a target on your back. Take the case of the Estancia Valley Classical Academy (EVCA). The School is affiliated with Hillsdale College and educates based on principles of the American Founding and a study of the classics from ancient Greece and Rome.

By all accounts, as seen below, EVCA has been successful in generating strong results (averaging an “A” over the last three years even if they received a “C” in 2016.

Unfortunately, this wasn’t good enough for the Public Education Commission (PEC). The Commission which had originally chartered the school decided in December NOT to renew its charter. If Education Secretary Skandera fails to override the PEC’s decision, the school would be forced to close.

According to the meeting minutes available at the PEC’s home page, Commissioner Patricia Gipson motioned not to renew the school’s charter, saying “I move to deny the renewal application of Estancia Valley Classical Academy for the following reasons: The school committed a material violation of the conditions, standards, or procedures set forth in the charter school contract because the school’s policies are in direct violation of federal law, and the school violated any provisions of law from which the charter school was not specifically exempted, because, once again, they are in violation of federal law.” Commissioner Jeff Carr seconded the motion and it passed 6-1 with only Commissioner Millie Pogna opposing it.

Additional details are available in the school’s renewal application package, but it is unclear what specific “material violation” the school had. It would also seem that some kind of remediation could have been recommended by the PEC, especially considering the school’s strong academic performance.

Alas, it appears that political agendas at the PEC may have gotten in the way of an excellent option for New Mexico students. And we wonder why New Mexico is 50th!

Some members of the U.S. Senate defend the fiscal and healthcare-access disaster that is Medicaid, others zealously guard taxpayers’ dollars.

Sen. Jeff Flake (R-AZ) is out with another exploration of “some of the questionable expenditures lurking throughout the federal budget.” Wastebook: PORKémon Go is a 201-page compendium of transportation boondoggles, dodgy “science” grants, corporate welfare, and other fiscal atrocities. Unlike last year, New Mexico isn’t specifically mentioned in this year’s publication. But the state is listed as a beneficiary of a program that “allows federal farm loans to literally be repaid with peanuts.”

Instead of covering borrowed funds with actual cash, American peanut farmers can forfeit their crops to the U.S. Department of Agriculture’s Commodity Credit Corporation. And since Washington “pays a rate greater than the market price for the peanuts,” the sweetheart deal “has become a ‘safety net’ for many agricultural operations.” As the Congressional Research Service explained: “The program essentially provides a price floor for producers because the government will take ownership of the loan collateral (i.e., the pledged crop) if prices drop below the statutory loan rate.”

The Land of Enchantment can’t match Georgia’s massive yield, but the National Peanut Board ranks New Mexico among the “major” peanut-producing states. In 2014, the harvest was 15.5 million pounds. So it’s a safe bet that peanut-based crony cropitalism is at work somewhere in the state.

For more of Flake’s findings — including a treadmill for fish, a carbon-capture boondoggle, and Washington’s appalling PR spending — click here.