It would be difficult to name a public-policy movement more ignorant — and potentially destructive — than the sue-for-higher-school-spending crusade. That’s why New Mexicans must keep close watch on the trial now underway over the consolidation of Yazzie v. New Mexico and Martinez v. New Mexico.

The cases, filed in 2014 by the New Mexico Center on Law and Poverty and Mexican American Legal Defense and Education Fund, allege that taxpayers don’t spend enough to ensure that “every single school-age child [is] provided with a sufficient and uniform public education.”

Some important facts to keep in mind as the trial proceeds:

● There is zero connection between school expenditures and student performance.

● New Mexico spends more than its neighbors on government schools. (Thirty percent more than Utah, where pupil proficiencies are stellar.)

● The “fairness” and “equalization” dreams of the educrat lobby have essentially been attained in New Mexico — just a few states surpass the Land of Enchantment in posting the lowest share of K-12 spending covered by local taxpayers.

● Policy by lawsuits, rather than legislation, is poor — and unaccountable — policy. As Walter Olson of the Cato Institute noted: “[M]odern school-finance litigation only poses as being about educational quality. Its deeper mission is control — specifically, transferring control over spending from voters and their representatives to litigators whose loyalty is to a mix of ideologues and interest groups sharing a wish for higher spending.”

The annual Kids Count report is out, and nothing’s changed since 2016: “[F]or a second consecutive year … New Mexico [ranked] 49th in the country for overall child well-being and dead last in education.”

As is always worth noting when Kids Count is released, the publisher of the report, the Annie E. Casey Foundation, is a far-left organization. It pushes for “bold and decisive action” (translation: Big Government) to improve the condition of children in America.

If the foundation were truly committed to making every kid count, it would be much more vocal on the role illegitimacy and divorce play in poverty and abuse. It would also be intensely exploring how government programs promote out-of-wedlock births and family fragmentation.

It’s hardly surprising that the three states that rank worst overall on Kids Count in 2017 also rank worst on illegitimacy. Mississippi is rock-bottom on both metrics, while Louisiana and New Mexico switch places when it comes to unmarried mothers. Other top-ten states in out-of-wedlock births that cluster toward the bottom of Kids Count include South Carolina, Nevada, Arizona, Florida, and Georgia. High-divorce states (e.g., West Virginia, Nevada, Arkansas, Alabama) tend to fare poorly on child outcomes, too.

To its credit, Kids Count makes note of the undeniable data:

Children growing up in single-parent families typically have access to fewer economic and emotional resources than children in two-parent families. In 2015, 35 percent of single-parent families had incomes below the poverty line, compared with 8 percent of married couples with children. They also have poorer health and educational outcomes and are more likely to drop out of school, to have or cause a teen pregnancy and to experience a divorce in adulthood.

But inexcusably, the issue isn’t addressed until page 43 of the report — and the main text (before the start of endnotes) stops at page 45!

While there are many well-intentioned members of the left-leaning “for the children” movement, they are unlikely to make much progress on the problem they claim to combat until single parenting is recognized as a force multiplier for social pathologies. “No judgements” may feel good, but as social policy, it’s been a disaster.

Janus v. AFSCME could free all government workers in the U.S. from being forced to pay union fees as a condition of employment

(Albuquerque, NM) – Public schools teachers, state social workers and other government employees should not be forced to pay money to a union just so they can keep their jobs. That’s why Rio Grande Foundation is urging the U.S. Supreme Court to hear Janus v. AFSCME.

Janus v. AFSCME has the potential to finally end the decades-old requirement of forcing government employees to pay mandatory union fees regardless of whether they want to be represented by a union. This case was brought by the Liberty Justice Center and National Right to Work Legal Defense Foundation on behalf of Mark Janus, a child support specialist from Illinois. On Tuesday, Janus petitioned the U.S. Supreme Court to hear his case.

As Rio Grande Foundation President Paul Gessing explains, “Government unions should not be able to take money out of workers’ paychecks before workers themselves. For too long union executives have forced government employees to pay fees to fund their political activity and special interests. This case has the power to free government workers across the country and restore their freedom to choose what political causes they want to support.”

In 22 states across the U.S., government including New Mexico, workers are required to be represented by and pay money to a union as a condition of employment. Janus v. AFSCME argues that forcing workers to financially support a union against their will violates the First Amendment.

The request for the U.S. Supreme Court to hear this case follows a March ruling by the U.S. Court of Appeals for the 7th Circuit, which upheld forced dues, citing the Supreme Court’s 1977 Abood v. Detroit Board of Education decision. The plaintiffs in Janus v. AFSCME argue that Abood was wrongly decided and should be overturned, especially in light of subsequent U.S. Supreme Court rulings that have applied strict scrutiny to mandatory union fees.

Last year, it appeared that the U.S. Supreme Court was ready to strike down forced union fees for public sector workers for good in the Friedrichs v. California Teachers Association case. The plaintiff in that case was Rebecca Friedrichs, who, together with eight other teachers, argued that Abood should be overturned because the forced collection of union fees is a violation of the First Amendment.

Most legal observers agreed that Scalia was set to cast the deciding fifth vote in favor of the plaintiffs. However, his death just weeks before the case was to be decided resulted in a deadlocked court and left Abood in place for the time being. Now, Janus provides another vehicle for the Supreme Court to revisit the constitutionality of compelled union fees for public employees.

As the Democrat-controlled Legislature whines about spending cuts and attempts to raise taxes, newly-released 2017 data show New Mexico state/local spending (as a percentage of gross state product) far outpaces neighbors and is 2nd-highest overall. The data are from USGovSpending.com. Only Kentucky spends more as a percent of economic output than New Mexico.

Given that reality, it is no surprise that state/local spending in New Mexico far outpaces its faster-growing regional neighbors and the national average. The data can be seen in the chart below:

Source: Medicaid in Small Towns and Rural America: A Lifeline for Children, Families, and Communities

Rural America is in trouble. As The Wall Street Journal recently noted: “In terms of poverty, college attainment, teenage births, divorce, death rates from heart disease and cancer, reliance on federal disability insurance and male labor-force participation, rural counties now rank the worst among the four major U.S. population groupings.”

Sadly, the phenomenon is impacting New Mexico in a big way. The U.S. Census Bureau’s new population data show that a whopping 24 of the Land of Enchantment’s 33 counties, all of them rural, lost residents between 2011 and 2016. (The gainers were Bernalillo, Curry, Doña Ana, Lea, Luna, McKinley, Sandoval, Santa Fe, and Taos. Most of the nine saw very modest increases.)

But wait, there’s more. A new analysis by the Georgetown University Center for Children and Families and the University of North Carolina’s Rural Health Research Program found that 59 percent of children in small towns/rural areas in New Mexico were on Medicaid in 2014-2015. For adults, the share was 27 percent — 4th among the states, and a gain of 12 percentage points since 2008-2009.

So much for the “Rural Jobs Tax Credit,” as well as the other schemes New Mexico pols have concocted to revive the economy out in the sticks.

While there is zero evidence that urban cores are enjoying a revival, Americans, and New Mexicans, prefer to live in metro regions. (Preferably in a detached home, with a decent yard, and within easy driving distance of a Costco, Home Depot, and Chipotle.) Rural regions are hollowing out, and for those who remain, life appears to be rougher than ever. It’s a severe, and increasingly expensive, public problem.

The Rio Grande Foundation has been leading the charge against Councilor Isaac Benton’s proposed Albuquerque gas tax. (You can sign our petition here)

He knows there is significant public opposition to yet another local tax hike and City Council has delayed a final vote on the issue until Monday, June 19. So, he penned an article for the Albuquerque Journal that laid out his position. His arguments are enlightening.

1) There is a minor disagreement over math. The exact rate charged in New Mexico is trivial. The federal rate is 18.4 cents while the state rate is 17 cents. But wikipedia lists a different combined rate.

2) It (the gas tax) is worth it. In Benton’s view, virtually anything that transfers money from your pockets to government coffers is “worth it.” This is obviously purely subjective.

3) See point 2. Benton touts the money government would have as a result of this tax, but dismisses the cost to individuals and families.

4) Benton wants to do whatever he can to distance the gas tax from the unpopular ART (which he supported). Even if no money from this tax is allocated directly to ART, it will free up resources that would otherwise be used on roads that can in turn be used for ART. Money is fungible.

5) Compliance with ADA: his argument would be much more convincing if he outlined specific legal issues the City faced due to ADA non-compliance. I have heard of nothing.

6) Administration and compliance eating up 4.7% of total tax collections is a significant amount.

In public policy, if you stick around long enough issues that you thought were “dead and buried” invariably come back. One such issue is air traffic control which President Donald Trump intends to reform by, among other things, separating government’s regulatory/safety function from operations.

Rio Grande Foundation president Paul Gessing wrote about the issue extensively in his role with the National Taxpayers Union, a government reform organization based in the DC area.

Gessing’s involvement in the issue goes back nearly two decades with a policy brief  and items published in the Wall Street Journal. With Canada and the UK already having enacted reforms to free air traffic control from the bounds of government, it is indeed time to reform America’s air traffic control system.

New Mexico’s Higher Education Department just announced that New Mexico’s Lottery Scholarship will cover an average of “only” 60 percent of qualifying students’ tuition at New Mexico institutions.

That’s down from 90 percent coverage this year, thanks to long-term declines in lottery revenues, rising tuition, and the fact that liquor taxes will no longer be diverted to prop up the scholarship program.

These problems were easy to foresee.

A few years ago, the Rio Grande Foundation outlined problems with the program as currently formulated and detailed some potential changes to the scholarship a few years ago in a paper, “A Market-Based Approach to New Mexico’s Lottery Scholarship Program.”

Here are a few initial problems with the program itself:

1. By traditionally covering 100 percent of costs, the scholarship created an entitlement mentality among students who failed to value the benefit they are receiving.
2. Students who would otherwise spend their own or their family’s money or obtain scholarships no longer did.
3. The scholarship subsidized New Mexico’s institutes of higher learning, as they priced tuition to maximize scholarship funding.
4. There will always be more demand for “free” college tuition than there are people willing to make long-shot bets on lotteries. This is the very definition of a “regressive” (albeit voluntary) tax. People playing the lottery are generally of low income levels while those benefiting tend to be of higher than average incomes.

Based on the points outlined above, given New Mexico’s ongoing budget woes, and more filling the Lottery Scholarship budget with money from elsewhere in the budget is unacceptable.

In fact, a scholarship that “only” covers 60 percent of tuition might be preferable in many ways to one covering 100 percent, as it reduces the entitlement mentality and creates incentives for students to look for additional financing for college.

Should there be higher standards or income limits on the scholarship program? Those are good questions, but it is hard to hold a physics major scraping by at demanding New Mexico Tech to the same GPA requirements as a student in a less-challenging field like political science, my chosen area of study.

And, while it is tempting to make the Lottery Scholarship yet another “progressive” government program geared to helping those of modest incomes, policymakers should demand results from both the Lottery Scholarship and higher education in general rather than punishing “the rich.”

For instance, how many scholarship recipients stay in New Mexico to work instead of leaving our state? Should we limit the scholarship to fund scholarships to just New Mexico schools? Or should the program give students a fixed amount to use at the school of their choice, whether it’s in or out of state?

It’s worth noting that New Mexico spends generously on higher education and that tuition here is lowest in the nation.

In March, Student Loan Hero, an Austin, Texas-based student loan management company, used U.S. Department of Education data to calculate the average cost per credit hour for residents to attend public colleges and universities in each state.

The average rate at schools around New Mexico is by far the lowest, at $112.77. All of this spending hasn’t done much for New Mexico’s economy with its highest-in-the-nation unemployment rate.

In New Hampshire, on the other hand, a credit hour costs $387. Yet, its economy is among the most vibrant in the nation.

If used correctly, the Lottery Scholarship could force New Mexico’s higher education system to excel and be more cost-effective.

Policymakers can and should reform the Lottery Scholarship to bring increased transparency and accountability to all of higher education.

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.

No one “makes” you batter an intimate partner.

But while domestic violence is more a function of culture than policy, government plays a proper role in the crime, especially in New Mexico, where the offense is committed at a rate above the national standard.

Unfortunately, according to a new report from the Legislative Finance Committee, New Mexico’s public sector can be doing a much better job serving both victims and offenders.

“Domestic Violence Programs for Victims and Batterers” found that the state’s response to the crime is “fragmented and uncoordinated.” One obstacle is the number of “entities involved in responding to domestic violence,” a list that includes law enforcement agencies at all levels, the New Mexico Children, Youth and Families Department, the Crime Victims Reparation Commission, welfare programs, the Judicial Education Center, and government schools. As the pictograph above shows, the bureaucracies are many, and streamlining is necessary.

Another disturbing revelation was the small number of “clients” who complete batterer intervention programs. Usually ordered to participate by a judge, offenders must complete 78 hours over the course of 52 weeks. But on average, only 20 hours “of any type of counseling” were received in fiscal year 2016. Worse still, the mandate for yearlong participation in a BIP “is unsupported by evidence.” LFC staffers found “no consensus on the optimal length a program should be to be effective.”

The “Domestic Violence Leadership Commission” offers an egregious example of dropping the ball. Formerly founded on an executive order, the 26-member body was “enacted into statute by the Legislature in 2010.” Yet “there is no evidence the Commission has met since that time.” Not impressive “leadership,” that.

Finally, keeping police and judiciary employees up-to-date on best practices in combating domestic violence doesn’t appear to be enough of a priority. The New Mexico Law Enforcement Academy requires “just one hour of refresher training” on the subject “for officers as part of the biennial in-service cycle.” There has been “no statewide domestic violence-specific training for judges and court personnel in New Mexico since 2006,” and the Judicial Education Center’s statute “makes no provision for requiring training” on the crime.

There is a limit to what government can do to address the carnage created by people who choose to abuse an intimate partner. But the LFC’s report shows that New Mexico’s bureaucrats and elected officials need to take the problem of domestic violence more seriously, and implement a number of necessary — and affordable — reforms.

Last month Errors of Enchantment inaugurated a new system to benchmark employment growth in New Mexico. The U.S. Bureau of Labor Statistics conducts a regular analysis of 12-month employment changes in the nation’s metropolitan statistical areas. Our new analysis looks at New Mexico’s four MSAs, compared with the 49 MSAs found in the state’s five neighbors: Arizona, Utah, Colorado, Oklahoma, and Texas.

As depicted in the chart above, in the second month of our research, the results still don’t look good. Average job growth from April 2016 to April 2017, for the non-New Mexico MSAs, was 1.4 percent. Las Cruces came closest to the regional pace, at 1.0 percent growth. But Albuquerque (0.5 percent) and Santa Fe (0.5 percent) lagged far behind, and Farmington dropped by 1.4 percent. (In the region, only Texarkana, at -1.6 percent, performed more dismally.)

The good news is that since bottoming out in September 2010, employment in New Mexico has been on a generally upward path (See chart below.) But the state has yet to regain its pre-Great Recession peak, and as the BLS data show, neighbor MSAs are doing much, much better. The Land of Enchantment remains desperate for proven, powerful policy tools to boost economic development. How much longer do we have to wait?

We didn’t need more evidence about the value of limiting the welfare state to the truly needy, but here it is: In Alabama, between January 1, 2016 and May 1, 2017, the number of “able-bodied adults without dependents utilizing the Supplemental Nutrition Assistance Program, known as SNAP or food stamps” dropped by 85 percent.

The Heart of Dixie isn’t alone. In Maine, the cut in SNAP rolls for the able-bodied was 90 percent. Kansas and Indiana have seen big drops, too.

As the Heritage Foundation’s Robert Rector noted last year, when the Obama administration waived the rule that able-bodied adults without dependents (ABAWDs) were limited to “three months of benefits in a 36-month period unless they were employed or participating in a work program at least part time,” enrollment in SNAP program soared. Between 2007 and 2013, the caseload expanded from under 2 million to 4.9 million.

In late 2014, Maine’s chief executive decided to re-impose the productive-activity mandate for ABAWDs getting food stamps. Cruel? Mean-spirited? Perhaps not. Here’s the state’s commissioner of human services:

When we began requiring able-bodied adults without dependents … to work 20 hours per week, volunteer an hour per day, or attend vocational training in order to maintain food stamp benefits, only about one in five complied. Even when we have reached out to ABAWDs with job and volunteer opportunities, they have opted simply to go without benefits and have declined to participate in the training or volunteer opportunities. It is truly a sad situation but it underscores the point that we cannot enable willful inactivity and it is imperative that these programs are designed to help people who are making a genuine attempt to transition from poverty to prosperity. They cannot be a way of life.

We know from the data and from our law enforcement partners that a significant portion of drug related arrests and crimes include individuals with EBT cards and SNAP benefits. Unfortunately, too many of these folks are ABAWDs that aren’t meeting the work requirement of the program. These able-bodied adults need to get a job, not get more food stamps. This experience tells us that government at all levels should consider work and volunteer requirements for all welfare programs in order to end the perception of welfare as a lifetime handout.

And as Rector pointed out, if SNAP were such a critical support for ABAWDs, who “barely have enough money to feed themselves,” why does the cohort smoke so many cigarettes? Using data from the National Health and Nutrition Examination Survey, the scholar found that “over 50 percent of ABAWDs” smoke, “consuming on average 19 packs of cigarettes” a month, at a cost of “around $111 per month.” (See chart above.)

In New Mexico, though, the story’s familiarly depressing. Late last year, the Martinez administration, citing the three-decades-long litigation engineered by the state’s welfare industry to protect SNAP, “asked the U.S. government to continue exempting able-bodied adults receiving food aid from having to get a job or volunteer at a nonprofit agency.”

Meanwhile, the boss of the New Mexico Children, Youth, and Families Department is concerned that “two-thirds of those who are eligible have yet to enroll” their kids in taxpayer-subsidized childcare assistance.

Is it any wonder that “lack of applicants” is a serious problem for New Mexico employers looking to hire?

Since January 2015, the Foundation has tracked 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 May, of 13,507 projected jobs, 11,096 — 82.1 percent — were slated for right-to-work (RTW) states:

Once again, Missouri deserves special attention. It accounted for a whopping 33.2 percent of all jobs to be created in non-RTW states. But the Show-Me State passed a RTW law earlier this year, with an effective date of August 28th. When September’s data are compiled, and Missouri begins to be counted as RTW, the labor-freedom advantage in employment growth is likely to spike even higher.

As for the sub-metrics the Foundation scrutinizes:

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

* RTW prevailed in foreign direct investment, too. Seventeen projects are headed to RTW states, with four to occur in non-RTW states.

Marquee RTW investments included:

* Nokian Tyres picked Tennessee for a 400-employee factory

* James Hardie Building Products will create 205 jobs at a new plant for “fiber-cement building products” in Alabama

* Constant Aviation, “a full-service maintenance, repair, and overhaul operation with a nationwide network,” will hire 200 workers to operate a “state-of-the-art” facility in Arizona

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.

Although he’s head of one of the largest tax eating institutions in New Mexico, I’ve always had respect for interim president Chaouki Abdallah. That respect only grew after reading the lengthy profile in the Albuquerque Journal over the weekend.

For starters, Abdallah didn’t back down when various leftists attempted to shut down a talk by Milo Yiannopoulos. But this interview displayed an honesty about both New Mexico and higher education in general that is rare among people of his position. Specifically, he said, “Our higher ed spending is more than most other states; the trouble is we don’t spend it wisely and (we) spread it across so many entities. We do need a plan.” (RGF has made this point repeatedly)

This is anathema to those on the left for whom no amount of spending is adequate. We just saw in the recently-completed special session that legislative Democrats have no desire to cut spending in any systemic way. Even the head of the State’s flagship University “gets it.”

Even more enlightening is his statement “UNM has these spires of excellence, best in the world or top five, but like everything else around this state, the average is bad because you have to make sure everyone is taken care of.”
”
In other words, resources “paying off” various constituencies and/or distributing resources in ways that are ineffective and unnecessary for mere political reasons that ultimately degrade the quality of the product as a whole.

Abdallah clearly understands the way things work in New Mexico. Since he doesn’t want to stay on as UNM President, perhaps he has a future in politics?

Source: GRT rates schedules,  New Mexico Taxation and Revenue Department 

When local governments in the Land of Enchantment increase their gross receipts taxes, the hikes go into effect on January 1st or July 1st. So one month from today, a hefty number of New Mexico taxpayers will be paying more when purchasing goods and services. Albuquerque’s levy, boosted by Bernalillo County’s imposition of a three-sixteenths of 1 percent increase, will rise to 7.5 percent.

Sadly, GRT rates in the new century have gone in only one direction — up. The chart above lists how much New Mexico’s seven largest municipalities raised their GRT rates between January 1st, 2000 and January 1st, 2017. (Rio Rancho is bifurcated into its Bernalillo County and Sandoval County portions.) The biggest burden was imposed by Las Cruces, which increased its rate from 6.375 percent to 7.75 percent. But among the seven, The City of the Crosses will soon lose its status as the top hiker. Clovisites are scheduled to get hit with an eighth-of-a-percent increase July 1st, which means their rate will have increased by a whopping 31 percent since 2000.

Did local pols hike the GRT in your community — or are they planning to? Let us know about it.

Albuquerque City Councilor Isaac Benton’s proposal to create a 2 cents-per-gallon gas tax will be voted on by the full council on June 5. If enacted, the tax would be a net negative for the city of Albuquerque. Aside from adding to an already-high local tax burden and disproportionately affecting low-income families, Benton’s tax would not do much to improve the city’s roads and have negative effects on its economy.

The proposed tax adds 2 cents per gallon onto the combined state and federal 35.4-cent tax. This is the same gas tax that has been in the crosshairs of legislative Democrats for further hikes as recently as this special session. Albuquerque residents already face the highest tax burden in the state as a percentage of income. A new gas tax will affect a large number of low-income families.

According to the Brookings Institution, 80 percent of households with annual incomes of under $50,000 drive cars, and a third of them own multiple vehicles. These vehicles are often older and less efficient. The well-off can easily afford a 2-cent tax due to their additional wealth and ability to buy new, efficient cars which are even covered by onesureinsurance.co.uk/van-insurance, but the disadvantaged must pay the same tax while earning less and filling their tanks more. While 2 cents sounds like a small burden, for workers whose main focus is putting food on the table for their families, every little bit counts.

A gas tax would also have negative effects on Albuquerque’s economy. The Brookings Institute notes that such taxes drain the economy of purchasing power due to their effects on low- and moderate-income families. Put simply, lower-income families generally spend most of their income, meaning that a spending increase in one area, like gas, means that spending decreases accordingly in other areas. Decreased spending harms the economy, especially one which is still recovering from a major downturn. Thus, families are hit with a double effect: first, they must pay more for gas and lose out on spending elsewhere, and then they must deal with the effects of a slow economy.

As the ordinance is written, the tax would be used to “rehabilitate transportation systems.” This could mean directly supporting or allowing existing dollars to be diverted to the controversial Albuquerque Rapid Transit program and the city bus system. Any gas tax paid by motorists should at least be dedicated to improving and expanding Albuquerque’s roads.

Additionally, as Benton himself said recently, much of the revenue will be allocated to “outdated” roadways that are functional but for some reason or another are not compliant with the federal Americans With Disabilities Act. As well-intentioned as this may be, average Albuquerque residents and motorists want roads that get them from A to B with fewer potholes. As time passes, roads are being upgraded to comply with ADA. Adding a new tax onto the backs of local motorists now in order to comply with a law passed back in 1990 is ridiculous.

Even if the proceeds were dedicated specifically to roads, it is worth questioning what the city will receive in terms of “bang for the buck.” That’s because a significant portion of the money generated by the tax will be spent on the creation of a collection and auditing apparatus. Some of the revenue created would have to be spent on additional bureaucracy to collect, audit and set up an appeals process relating to the new tax.

Gas taxes aside, local taxpayers are facing increased tax burdens. Between Bernalillo County and the city of Albuquerque, gross receipts taxes applied to most purchases will have risen an astonishing 29 percent since 2000 once the latest round of tax hikes kicks in this July. We are reminded every day, whether from news reports or by just driving down the street, that our city has not recovered from the economic crisis of 2008. Raising taxes yet again is not likely to improve the local economy.

You can sign the Rio Grande Foundation’s petition to the City Council and Mayor Richard Berry at www.NoABQGasTax.com.

For another facile defense of Obamacare in the Land of Enchantment, check out “Potential Impact of Repeal of the Patient Protection and Affordable Care Act on New Mexico.”

The paper is authored by Hugo Vilchis, an M.D. “with more than 30 years of experience in population health, 20 of them in international health.” He’s currently the executive director of the Burrell Institute for Health Policy & Research, a “division” of the Southwest Foundation for Osteopathic Education & Research. (The Burrell College of Osteopathic Medicine is located at New Mexico State University, but does not appear to receive taxpayers subsidies — at least, not yet.)

Vilchis, who believes that repeal “would have far-reaching and negative consequences for every facet of life in New Mexico,” hopes that readers find his paper “useful and accurate,” and welcomes “any comments and feedback.”

Okay. Here goes.

“Potential Impact of Repeal of the Patient Protection and Affordable Care Act on New Mexico” suffers from the usual fallacies and oversights embraced by supporters of Obamacare. These are the most maddening:

* The “coverage” fetish. Vilchis gushes that Obamacare “has expanded health-care coverage to more than 20 million people.” But “coverage” is a tricky thing. What’s the quality of coverage? How much does it cost? Who’s paying for the coverage? Does more coverage actually lead to better health outcomes? Would a more market-oriented approach boost the affordability and quality of coverage? These questions are rarely asked by left-wing defenders of massive government intervention in healthcare. To them, more coverage is better, no matter what the unintended — and often, quite unpleasant — consequences.

* Rosy speculation about the future, little attention paid to failures of the past. Vilchis claims that U.S. healthcare spending “from 2014 to 2019 is expected to be $2.6 trillion less than projected in 2010.” But given that the optimistic prognostications of Obamacare enthusiasts have been consistently off, there’s no reason to count on the estimate’s accuracy. And remember Barack Obama’s promise to “cut the cost of a typical family’s premium by up to $2,500 a year”? It’s AWOL in “Potential Impact of Repeal of the Patient Protection and Affordable Care Act on New Mexico.” (To his credit, Vilchis admits that “premium growth has slowed substantially but continues to grow.”)

* Reliance on “research” by fellow travelers. The Center for American Progress, the Economic Policy Institute, the “Brookings Institute,” the Henry J. Kaiser Family Foundation, the Center on Budget and Policy Priorities — Vilchis draws from an awfully narrow band of analysts. Perhaps worst of all, he approvingly cites the Congressional Budget Office, claiming that if the American Health Care Act were enacted, “by 2026, a total of 52 million Americans would be uninsured, 24 million more than if the current law were left unchanged.” But the CBO’s scoring is marred by flawed assumptions and problematic methodology, as Citizens Against Government Waste, the Galen Institute, and many others have noted.

* Ignoring an obvious conflict of interest. The Burrell College of Osteopathic Medicine benefits from Obamacare’s “increased federal support for the National Health Service Corps, which provides loan forgiveness to health professional students in return for their agreement to practice in underserved areas.” Yet nowhere in “Potential Impact of Repeal of the Patient Protection and Affordable Care Act on New Mexico” is this glaring bias disclosed.

Dr. Vilchis’s “primary research interests” are waterborne diseases, bioterrorism, emergency preparedness, and environmental health. The physician should stick with what he knows, and leave policy research to those who have a fuller understanding of the regulation/taxation/subsidization of healthcare.

The Albuquerque Journal had an interesting and slightly depressing article recently about the number of jobs that remain open lacking applicants even in New Mexico, the State which has had the highest unemployment rate in the nation for several months now. According to the article, employers surveyed gave “lack of applicants” as the reason for 66 percent of the jobs described as hard to fill. “Lack of experience” was cited for nearly 41 percent of jobs.

What does this mean? It’s tough to fully get a grasp on the system, but here are a few thoughts:

For starters, it is clear that our educational system from kindergarten to the university system are not getting the job done in terms of educating people for the jobs available. It would be great to see some truly “outside-the-box” thinking applied to all levels of schooling in New Mexico, but we’d settle for greater K-12 choice and increased resources for vocational education as opposed to traditional four-year degrees. We must especially question what our current higher ed dollars are getting for the tremendous tax dollar investment when apprenticeships might be a superior and much cheaper alternative;

Also, New Mexico has an abysmally-low workforce participation rate. As of April 2017 our rate was 54.1%, 2nd worst in the entire nation. With so many jobs going unfilled, perhaps it is time to ratchet back the generous government benefits and push more New Mexicans to join the work force? Enter President Trump whose budget was (universally and unsurprisingly) panned by Democrats in New Mexico’s Congressional delegation. Trump’s budget would cut programs like SNAP, Disability, and Medicaid all of which can make not working look more attractive than working.

It is somewhat counter-intuitive that a State can have at once a severely elevated unemployment rate and so many jobs unfilled, but this is New Mexico’s reality in 2017.

Government schools in San Juan County “are increasing the number of sites offering free meals to feed local students this summer.” The “Summer Food Service Program” relies “on innovation and collaboration to reach children who need good nutrition when school is out of session.” A “federally-funded [sic], state-administered program,” eligibility isn’t exactly strict. “Open” sites subsidize meals for all children in “low-income areas.” (As the program director for Clovis’s Sacred Heart Summer Food Service noted two years ago, “A lot of the parents might think that it’s for the poor only, but it’s not — it’s for every child.”)

The Farmington MSA has one of the worst unemployment rates in the country. Many people there need help. But that’s no reason to perpetuate a program that has a dubious justification. Child hunger in the United States is essentially nonexistent. Citing date from the U.S. Department of Agriculture, the Heritage Foundation’s Robert Rector wrote that “96 percent of poor parents” reported that “their children were never hungry at any time during the year because they could not afford food.”

Meanwhile, New Mexico’s food-stamp spending for residents of all ages remains colossal. While the numbers were down somewhat from the previous year, in March, 502,701 people — a bit less than a quarter of the population — were beneficiaries of the Supplemental Nutrition Assistance Program.

Source: Monthly Statistical Reports, New Mexico Human Services Department

With Democrats on the hunt for higher taxes at both the State and local levels here in New Mexico, it is worth asking just how heavy the State’s tax burden is relative to other States. Conveniently, Key Policy Data which looks at state by state data on taxes and other economic indicators, just published a new series of charts which show New Mexico to have both a heavy and growing state and local tax burden.

As shown in Chart 1, when New Mexico’s state and local tax burden (tax collections divided by private sector personal income) is used as the measuring stick, New Mexico’s tax burden was the fifth highest in the nation for FY 2015 at 18.8 percent—or 31 percent above the national average of 14.4 percent.

Far from being “gutted,” as shown in Chart 2, New Mexico’s tax burden has increased over time by 65 percent to 18.8 percent in FY 2015 from 11.4 percent in FY 1950.

Gov. Susana Martinez will have yet another opportunity to veto tax hikes in the wake of the 2017 special session. Unfortunately, New Mexico’s future could see political leadership that gladly accepts rather than rejects tax increases.

When Santa Feans overwhelmingly voted down a costly soda tax, pundits questioned whether this might be the start of a trend in which New Mexicans take a more skeptical approach to taxes. It is hard to say for sure, but another data point has been added to the developing trend-line and the result (again) is “No New Taxes!”

Yesterday, voters in the National Lab-dominated enclave voted down a new recreation bond levy by a vote of 3,446 for to 3,932 against. At a price tag of $23 million, the proposed property  tax hike was just too much for a majority of property owners even though (as usual) the political establishment desperately wanted to raise taxes.

The Rio Grande Foundation was not involved in this particular tax battle, but it is another indicator that New Mexicans’, facing the nation’s highest unemployment rate do not see tax hikes as a good option at this time. The Rio Grande Foundation IS involved in efforts to educate Albuquerque voters about a proposed gas tax increase which will be voted on June 5. That tax hike would go to the voters if it is approved by City Council and the Mayor.

So much for tax reform.

There will be no consideration of a major tax-modification package during the special session that starts today. Calling it “not fair to the public,”” House Speaker Brian Egolf (D-Santa Fe) has decided that the timing isn’t right for a significant revamp of the tax code.

But that’s no reason to nix the final installment of our look at tax reform in New Mexico, because the taxation of Internet sales — the topic planned for today — is very much alive in Santa Fe. While the ideas enumerated in HB 412, the 333-page bill favored by the governor, are DOA in the special session, the provisions contained in SB 202 are not. That bill made a number of important tax changes, including hikes in the gasoline and diesel taxes, a big boost to the weight distance tax permit fee, and an increase of the motor vehicle excise tax from 3 percent to 4 percent.

Yet the portion of SB 202 that stands the best chance of approval in the special session is the imposition of the gross receipts tax on purchases New Mexicans make from out-of-state vendors.

Fans of bipartisanship, congrats. The “Amazon tax” enjoys strong support from Democrats and Republicans in New Mexico. And as the Pew Research Center noted earlier this week, the story is the same beyond our borders: “In 2017, six states have enacted laws or set tax rules that address the lack of tax on remote sales — Alabama, Indiana, North Dakota, Virginia, Tennessee and Wyoming. All but Virginia have Republican governors and majority GOP legislatures.”

Revenue-grubbing pols, red and blue alike, think that the issue is settled. But it’s not. Proponents of taxing Internet sales consider their policy the closing of a “loophole” that harms brick-and-mortar sellers. But as the National Taxpayer Union explains, the “‘loophole’ is actually the physical presence standard, a firmly grounded constitutional doctrine the Supreme Court has upheld for decades to protect businesses and their customers from predatory tax administrators. The physical presence safeguard helps to protect taxpayers from many types of aggressive policies that could affect income, property and other taxes.”

The Tax Foundation agrees, arguing that the “U.S. Supreme Court precedent in both the Quill and Bellas Hess rulings stipulate that a seller have nexus with a state before that state can require the seller to collect taxes for sales to its residents. The U.S. Constitution was adopted in large part to prevent states from arbitrarily imposing complicated rules on out-of-state individuals and businesses who may have no say in how those taxes are administered.”

With so many states targeting Internet commerce, the issue will surely be addressed, once again, by the High Court. And the outcome, give the present lineup of justices, is anyone’s guess. Relying on the “new money” Santa Fe would get from applying the GRT to online sales could prove to be a sucker’s bet.

HB 412 doesn’t suffer from lack of ambition.

We explored several facets of the 333-page bill yesterday. Today, as legislators make their way to Santa Fe for the special session, Errors of Enchantment examines the way the tax-reform package favored by the governor substantially eliminates deductions, exemptions, and credits that are applied to the gross receipts tax.

Statutorily, the GRT is imposed on “the total amount of money or the value of other consideration received from selling property in New Mexico, from leasing or licensing property employed in New Mexico, from granting a right to use a franchise employed in New Mexico, from selling services performed outside New Mexico, the product of which is initially used in New Mexico, or from performing services in New Mexico.” But over time, an increasing number of sales have been able to escape the levy’s bite — carve-outs have been written into tax law for what politicians deem to be “public” purposes.

Reform of the GRT’s metastasizing deductions, exemptions, and credits has been a goal of all sides in the state’s tax community for some time. There’s general agreement that a broader base and a lower rate promote both stability in revenue-collection and simplicity in compliance. (Corruption, too, is lessened when elected officials don’t pick winners and losers in the marketplace.) So HB 412, which would convert the GRT into a “sales tax,” slashes away at perks that politically powerful customers/vendors have enjoyed for decades. Here’s a sampling of currently untaxed (or partially taxed) transactions that would be subject to the levy if the legislation were signed into law:

* “selling fuel, oxidizer or a substance that combines fuel and oxidizer to propel space vehicles or to operate space vehicle launchers”

* “the sale of fuel specially prepared and sold for use in turboprop or jet-type engines”

* “hosting world wide web sites”

* “selling wind generation equipment or solar generation equipment to a government for the purpose of installing a wind or solar electric generation facility”

* “selling newspapers, except from selling advertising space”

* “producing or staging a professional boxing, wrestling or martial arts contest”

* “the sale of textbooks and other materials that are required for courses at a public post-secondary educational institution if the sale is by a bookstore located on the campus of the institution and operated pursuant to a contractual agreement with that institution and the sale is to a student enrolled at the institution who displays a valid student identification card”

Check out the Legislative Finance Committee’s analysis of HB 412 for the full list. But if anything, the legislation’s pruning doesn’t go far enough. The exemption for sales of groceries, not a sound policy change when adopted in 2005, would remain. (The value of the exemption is nearly $240 million.) And many deductions/exemptions to special industries and activities would stick around, such as:

* “race purses at … horse racetracks subject to the jurisdiction of the state racing commission”

* “the sale or lease of real property and from the lease of a manufactured home”

* “the sale by a qualified contractor of qualified research and development services and qualified directed energy and satellite-related inputs … when sold pursuant to a contract with the [Pentagon]”

Despite its oversights, HB 412’s targeting of deductions, exemptions, and credits represents a large step toward uniformity and distortion-reduction in the Land of Enchantment’s tax architecture. That’s good news, and perhaps a model for greater simplification to come.

Tomorrow we’ll look at the way HB 412 seeks to apply the GRT/sales tax to transactions conducted over the Internet — and why the proposed provision is unwise and probably unconstitutional.

With fiscal conditions in the dumpster, it might not be the best time for New Mexico to slog through an overhaul of its tax code.

And as State Rep. Candie Sweetser, a Democrat from Deming, points out, a special session — one that taxpayers should hope will be short — does not offer much time “to analyze different proposals and amendments, hold public hearings and legislative debates, and provide New Mexicans with adequate opportunity to monitor the issue and express their opinions to their legislators.”

Throw in the facts that the legislature is controlled by a party comfortable with — if not eager to adopt — tax hikes, while the executive branch is run by a governor who has pledged not to raise taxes, and it’s not unreasonable to question the timing of a sweeping tax redo.

But Susana Martinez has repeatedly stressed her desire for the special session to achieve “comprehensive tax reform,” specifically citing HB 412, a hugely complex bill that passed the House of Representative but died in the Senate during the regular session.

It’s far from perfect, there’s a lot to like about HB 412. Here are a few highlights:

* A ban on soda taxes: Current law bans local governments from imposing excise taxes on tobacco, liquor, motor fuels, and motor vehicles. HB 412 adds “food or beverages” to the list. That’s a great idea — the Nanny State’s case against sugar-sweetened beverages is pathetically weak, and the money committed on future soda-tax battles in the Land of Enchantment would be better spent elsewhere.

* More revenue for roads: The excise tax assessed on sales of motor vehicles is set at 3 percent. The funding stream the levy creates does not flow toward transportation expenditures, but into the general fund. Starting in fiscal 2019, HB 412 distributes 50 percent of the excise tax’s revenue to the state road fund and 50 percent to the local governments road fund. The New Mexico Department of Transportation estimates that in the first year of the change, $159 million in “new money” will become available.

* Local GRT simplification: Villages, towns, cities, and counties can now impose levy hikes for prisons, “environmental services,” hospitals, “fire protection,” and “quality of life” expenses. HB 412 scraps all the earmarked increments, replacing them with a single rate. The New Mexico Municipal League noted that the shift would empower local governments to “raise and expend funds in response to federal and state requirements and local demands and conditions.”

* Renaming the GRT the “sales tax”: The change is terminology may not be momentous, but it is welcome, because the levy, as currently constituted, is a sales tax. The state admits it: “Although the gross receipts tax is imposed on businesses, it is common for a business to pass the gross receipts tax on to the purchaser either by separately stating it on the invoice or by combining the tax with the selling price.”

Tomorrow we’ll look at how HB 412 eliminates many of the dedications, credits, and exemptions that infect today’s GRT.

New Mexico’s junior member of the U.S. Senate doesn’t know much about anything, but when it comes to energy and economic development, his ignorance runs especially deep.

In a grueling interview with Albuquerque’s Weekly Alibi (sample question: “Do the [healthcare] reforms, as expressed by the Republicans in their legislation, constitute a danger to America’s middle class?”), Martin Heinrich boasted that he “worked really hard to work on renewable energy development and infrastructure management, so that we can become net exporters of clean energy to the rest of the country.” The Land of Enchantment’s awful governor hasn’t been much help, apparently, but “in Washington, we passed a set of incentives for wind and solar that are driving growing industries in Albuquerque and Santa Fe, Las Cruces, too.” The solon touted “investment” in wind power in rural New Mexico, which “creates permanent jobs for technicians who will be living in those rural communities.”

We’ve long known that as a job-creation mechanism, “clean energy” disappoints. And a new survey from the left-leaning Brookings Institution finds that one important type of funding for politically correct power is drying up: “Between 2011 and 2016, [venture capital] cleantech investment declined by nearly 30 percent, from $7.5 billion to $5.24 billion.” Even worse, VC in the sector is “heavily clustered in just four metro areas — San Francisco, San Jose, Boston, and Los Angeles.”

Meanwhile:

* Oklahoma is abandoning its “zero emissions tax credit,” through approval of a bill that one legislator promises “will save the state a significant amount of money moving forward, freeing up revenue that can be used on high priorities like education, public safety and health care”

* a new analysis published by the Institute for Energy Research concludes that despite spending €1.1 trillion on “green power,” European Union countries’ “investment has provided little in terms of generating capacity and output”

* rampant NIMBYism, from coast to coast, plagues proposals for wind and solar facilities

New Mexico’s northwest corner, where the bulk of the state’s coal and natural-gas production takes place, continues to suffer from one of the worst unemployment rates in the nation. Does Martin Heinrich care?