HB 291 passed the New Mexico House as an economically-harmful tax hike. Senate Majority Leader Peter Wirth has made some changes to the bill as detailed in the Albuquerque Journal.

In summary, with $300 million of new money and having just received an unprecedented $9 billion from the federal government, the idea that taxes need to be increased is misguided to say the least.

Worse, raising the top income tax rate from 5.9% to 6.5% and increasing corporate taxes to 7.6% is economically-senseless. Raising cigarette taxes so dramatically is both “regressive” AND will lead to cigarette smuggling as New Mexicans head to tribal lands to purchase cigarettes. New Mexico already has one of the highest rates of smuggling in the nation.

If Democrats who control both houses of the Legislature and Gov. Lujan Grisham want to increase tax credits for low income New Mexicans they should do that. The money is available in the form of $300 million (and rising) in “new” money.”

The Senate Finance Committee is planning to meet at 1 P.M. tomorrow to discuss a number of bills, including SB 130 and HJR 1. SB 130 would require 75% of the state’s vehicle fleet to be fully electric by 2030. The significant costs associated with this changeover would obviously be passed on to the taxpayer. HJR 1 would tap the land grant permanent fund to provide for expanded pre-K education. Unfortunately, the little data that exists does not support the notion that more pre-K leads to better education achievement down the road. Throwing more money at a broken system will not significantly move the needle on educational success in New Mexico.

You can watch the webcasts here, or contact the committee members with your comments using the information here.

The Rio Grande Foundation has submitted testimony in opposition to SB 130 and HJR 1.

A few weeks ago the House Transportation Committee had a meeting at which the Rail Runner and its finances were discussed. Of course, the train was shut down for nearly a year and it just reopened for service.

The following budget documents were presented during that meeting which was held over Zoom. Can you tell from looking at the budget documents that the train was out of service for approximately a year?

On this week’s interview, Paul sits down with Rio Grande Foundation intern and policy analyst Clint Pagurko. Clint has been with the Foundation for just a few months, but he has made a tremendous impact with the organization by researching and writing testimony for many of the bills of concern for the Rio Grande Foundation this legislative session. His testimony has been posted at: www.errorsofenchantment.com this session along with the Foundation’s usual information and analysis.

On March 11, 2020, New Mexico Gov. Lujan Grisham signed the first of what would eventually become more than a year of COVID 19 restrictions.

In Albuquerque Paul Gessing’s County league basketball team won the championship while also hearing that the NBA had suspended its season.

Pretty quickly after that life shut down. Schools shut down and we attempted to deal with a messy transition to “virtual learning.” Albuquerque playgrounds even shut down, but we let the kids play anyway learning a form of civil disobedience at an early age.

We hiked in warm weather and cold.

We hunted Easter Eggs at the (shut down) park.We played in the Rio Grande (AKA the “Rio Rancho Riviera) and visited Yellowstone National Park in the summer.

We went to preschool, but home schooled the two older children.

We went to an INDOOR Halloween Party at Calvary Church

We went trick or treating regardless of the government.WE went to Calvary Church for Christmas service and got socially-distant pictures taken with Santa. Finally, we traveled twice to the Great Wolf Lodge in Scottsdale, AZ TWICE and did their ropes course and played in their waterpark which was open while nothing like that was available in New Mexico throughout.

In big ways and small (and many more than listed here) we attempted to live both safely AND freely. This is just a fraction of the means we used to live free and enjoy life over the past year. None of the Gessing household including a 76 year old member of the household got COVID 19 over the past year.

Two economically destructive bills have made it to the House and will be heard in committee meetings tomorrow. Meeting at 9 A.M., the House State Government, Elections, and Indian Affairs Committee will consider SB 112. This bill would create a task force to direct the economy to move away from the oil and gas industry. As a government intervention in the market, this bureaucracy would obviously lead to inefficiency and hinder economic growth. Another House committee, the House Commerce and Economic Development Committee, will meet at noon to hear SB 66, a cap on interest rates for small loans, an issue we have written about before.

You can watch the meeting webcasts here, or join the Zoom meetings for public comment. The Zoom meeting for SB 112 can be accessed here, and the meeting for SB 66 can be found here.

The Rio Grande Foundation has submitted testimony in opposition to SB 112 and SB 66.

In a 1:30 P.M. meeting tomorrow afternoon, the Senate Tax, Business, and Transportation Committee will hear HB 291, a tax hike bill. The bill would raise the top income tax bracket rate to 6.5% from 5.9%. It would also allow an annual increase of 10% of the property taxes on residences that are not occupied as a principal residence by the owner. Annual property tax increases are currently capped at 3%.

You can watch the committee meeting webcast here, or email the committee members for public comment.

The Rio Grande Foundation has submitted testimony in opposition to HB 291.

Anytime the New Mexico Legislature is in session, the threat of tax hikes is real. Of course, with $300 million in “new money” from oil and gas not to mention an expected $50 million from legalizing marijuana, and untold amounts of federal spending thanks to the passage of “Biden bucks” there is no need for higher taxes.

That hasn’t stopped Democrats in the Legislature from pushing for higher taxes. Here are the ones that we are aware of which have passed one house or another. There are plenty of bad bills still moving, but if you know of other tax hikes still moving please let us know.

HB 291: which just passed the House raises the top income tax rate to 6.5% AND would allow property tax assessments for housing units that are not owner-occupied (possibly houses AND apartments in addition to the primary target, 2nd homes) to rise by up to 10% every single year.

Also, according to the Legislature’s own fiscal impact report, “The bill creates a cliff effect by excluding any business sold for a net capital gain of greater than $1 million from the eligible capital gains tax deduction. A taxpayer who sells a New Mexico business resulting in net capital gains of $1,000,001 is ineligible to claim any capital gains tax deduction related to the sale, creating significant inequity for that taxpayer and a taxpayer who receives the deduction for a sale worth $1 less.

HB 248: adopts $8 million worth of annual tax hikes on the insurance industry. It has passed the House and is awaiting Senate action.

HB 122: imposes a health insurance premium surtax, which the bill proposes to raise from 1 percent to 3.75 percent. It would raise taxes on health insurance policies by $208.7 million annually. It has passed the House.

Legislative committees will be hearing several bad bills today, tomorrow, and Friday. Meeting after today’s Senate floor session, the Senate Judiciary Committee will hear HB 4, the Civil Rights Act. This bill would open municipalities up to increased liability, putting strain on their reinsurance and raising costs to taxpayers. Next, the Senate Tax, Business, and Transportation Committee will hear SB 198 in a meeting starting at 1:30 tomorrow afternoon. This bill is another of several paid sick leave mandates. Finally, the House Commerce and Economic Development Committee will meet at 1:30 Friday afternoon to discuss SB 66, a cap on small loan interest rates.

You can find all the committee webcasts here. To give public comment on SB 198, follow the instructions here. You can join the Zoom meeting for public comment on SB 66 here.

The Rio Grande Foundation submitted testimony in opposition to HB 4, SB 198, and SB 66.

On this week’s discussion show, Paul and Wally discuss the rapid-changing COVID rules being imposed by the Lujan Grisham Administration.

They begin by Commemorating one year of COVID; New Mexico has announced that it is prioritizing teachers for the COVID-19 vaccine. That’s a fine idea, but why wait until now when the Gov. could have made this move back in January when the vaccine came out? During this conversation, Paul and Wally receive news that schools will be reopening to all K-12 students full-time.

New Mexico’s bowling alleys are still closed but MLG is letting Meow Wolf reopen on the 19th.

NM food insecurity among children on the rise during COVID.

Even after recent reopening measures, NM remains among the most locked down states in the nation according to Wallethub.

States begin to reopen Governor Abbott Lifts Mask Mandate, Opens Texas 100 Percent. Mississippi reopens as well and even Connecticut which announced it is lifting ALL capacity limits on restaurants, retail, libraries, personal services, indoor recreation, gyms, museums, offices & houses of worship.

Notably, 12 of 15 states w/o mask mandates (including Texas) outperformed New Mexico on COVID deaths. 

The $2 trillion Federal “stimulus” passes Senate on party-line vote. It heads to the House and soon (likely) to Biden’s desk. Here’s what’s in it. 90% of the money is NOT directly for addressing COVID.   

When it comes to COVID 19 in New Mexico, news happens fast. On Monday morning the Lujan Grisham Administration announced that teachers would head to the front of the line for vaccines. Later that same day before media outlets even filed their stories, the Administration announced that all schools and all grades would be reopening to full-time in-person learning starting on April 5.

For starters, we at the Rio Grande Foundation are pleased that the schools will be reopening. Of course, it could have been done earlier and many schools (public and private) across the country have been open since August. And, if teachers were going to receive vaccine priority, that could have been done back in January when the vaccine was first being distributed.

Albuquerque Public Schools was already lagging in getting back to in-person learning. It will be interesting to see if they can/will get this done. More important than getting kids into their classrooms this spring is the clear sign that students across the State will be back in class this fall unless the Virus situation worsens dramatically.

While we applaud the reopening, the Gov.’s reopening has been chaotic and ever-changing. There is no doubt this has been a challenging time for districts AND parents/families.

One of the few good bills introduced this session, HB 177, is currently scheduled for a hearing in the House Health and Human Services Committee at 8:30 tomorrow morning. This bill would reform the cottage food laws in New Mexico, simplifying the permitting and removing the requirement for very expensive kitchen upgrades. The bill would also legalize the sale of non-perishable homemade food outside of farmers markets and roadside stands. After this bill stalled early in the legislative session, the Rio Grande Foundation helped work to bring it back. This is the second House committee the bill will need to move through to reach the House floor.

You can watch the committee meeting webcast here, or join the Zoom meeting for public comment.

The Rio Grande Foundation has submitted testimony in favor of HB 177.

UPDATE GOOD NEWS: On March 9, the NM Senate Amended the tax hike out of HB 255 and passed it in a bipartisan vote. 

The Rio Grande Foundation has long supported reform of New Mexico’s arcane and expensive liquor licensing system. Legislation (HB 255) has been introduced and is moving through the current session.

There is a lot to like about the bill, BUT, as of right now, the bill has a retail excise tax of 2 percent on alcohol sales that would increase taxes by $30 million annually. See FIR below. 

The bill is moving. The GOOD news is that the tax hike MAY be removed. We hope so. If it IS removed HB 255 may be one of the better bills passed for long-term economic growth this session.

With Congress on the verge of passing yet another massive (and this one completely unnecessary) “stimulus,” Americans are being lulled into the belief that America is simply a few more printed dollars away from economic prosperity. Obviously, sooner or later the bill will come due for all of this debt.

Ironically, recently the Americans (unbeknown to most of them) actually “celebrated” 40 years of successful deregulation of America’s freight railroad system via the Staggers Rail Act. The Act, passed in 1980 and signed by President Jimmy Carter, removed the federal government from setting freight rates.

Deregulation worked and latest are now 43 percent lower today than 1981. The Rio Grande Foundation recently signed a letter in support of the Staggers Act and acknowledging its success.

Some day Americans and their elected officials will again realize that printing money is not the path to prosperity. Rather, it is the combination of innovation, hard work, and sound public policy that we achieve greater prosperity.

Two Senate committees will consider bad legislation this afternoon. The Senate Finance Committee will hear SB 11, the Clean Fuel Standard Act, in a meeting starting at 1 P.M. or half an hour after the end of the Senate floor session. The Senate Health and Public Affairs Committee will hear HB 20, a paid sick leave mandate, in a meeting also starting half an hour after the floor session.

You can find the meeting webcasts here.

The Rio Grande Foundation submitted testimony in opposition to SB 11 and HB 20.

On this week’s conversation, Paul sits down with New Mexico Chamber of Commerce President & CEO Rob Black and economic consultant Ted Abernathy who runs the firm Economic Leadership.

Ted recently worked with the Chamber to develop various economic policy recommendations for New Mexico based on numerous conversations with business leaders. The information has been shared with elected officials and economic development experts throughout the State. You can find out details on those recommendations here.

The Rio Grande Foundation is not and never has been “anti-mask,” but we support states that have chosen to move towards reopening. While President Biden called states like Texas which have recently reopened and dropped its mask requirement, “neanderthals” and Gov. Lujan Grisham stated that New Mexico would not be dropping its mask mandate anytime soon, the reality is that like so many aspects of COVID 19, it is hard to connect government containment policies with success.

Here is a map of states that do NOT require masks. According to WorldoMeters’ COVID tracking site, most of them have performed BETTER than New Mexico (15th-worst in the nation) on the virus (deaths per population).

Of the non-mandate states only Arizona, South Dakota, and North Dakota have higher death rates than New Mexico.

Every other state (a total of 12 of them) that lacks a mask mandate has a lower COVID death rate than does New Mexico.

Whether you wear a mask in public or not, it should be a personal decision, not a governmental one.

RGF president Paul Gessing recently sat down to discuss the Biden Administration’s moratorium on oil and gas with Shelton Dodson of CBS 4 in El Paso.

Unfortunately the link cannot be embedded here, but here is a screen shot with a link to the story and video.

In 2019 the New Mexico Legislature passed a big tax hike despite the existence of a large budget surplus. Since the 2019 session and despite the COVID 19 pandemic, New Mexico government spending has continued grow.

And, as we push beyond the pandemic and the 2021 legislative session, New Mexico’s budget is again growing as are revenues. The House-passed budget would, if adopted, increase annual spending by nearly 5% while giving pay raises to government employees.

Now, HB 291 has passed the House largely along partisan lines although a few Democrats joined Republicans in opposition. The bill is ANOTHER income tax increase which would take the top rate from 5.9% (where it was after HB 6 increased it from 4.9%) to 6.5%.

Perhaps most troubling is the bill would allow the assessments used in property tax calculations to climb up to a mind-blowing 10% a year – rather than the usual 3% limit – for homes that aren’t the owner’s principal residence, beginning in 2024. It is questionable whether this kind of tax discrimination is even legal (especially since 2nd homes use FEWER services than homes that are occupied full-time), but this Democrat-dominated Legislature doesn’t seem to care much for details.

The bill now moves to the Senate where we will keep a close eye on it.

After starting off on the right foot by passing HB 177, legislative committees have more work to do this afternoon. The Senate Finance Committee has plenty on its plate, with the excellent SB 234 and the bad SB 130 on the schedule. Rolled over from a previous meeting, SB 234 would allow home schooled students access to the legislature’s lottery scholarship. SB 130 requires the state government’s vehicle fleet to be 75% electric by 2030. Although it has not yet been scheduled for a hearing, keep an eye on this committee for the terrible SB 11, the Clean Fuel Standards Act. The Senate Finance Committee will meet beginning at 1 this afternoon or half an hour after the floor session.

The House Consumer and Public Affairs Committee will hear the misguided HB 352, a moratorium on contractor-operated prisons. This bill would devastate several local economies and ignore the good that these systems have done for New Mexico communities. This meeting is scheduled to begin at 1:30 today.

The Rio Grande Foundation has submitted testimony in favor of SB 234 and in opposition to SB 130, SB 11, and HB 352.

In a meeting scheduled for 8:30 this morning, the House Agriculture and Water Resources Committee will hear HB 177, the Homemade Food Act. This bill would bring New Mexico in line with 49 other states in allowing homemade food to be sold outside of farmers markets and roadside stands. It would also make the permitting procedure far less burdensome and expensive. There are no food safety concerns with this bill, and it would allow a long-prohibited economic lifeline that has become especially important in the current economic downturn.

You can watch the committee webcast here, or join the Zoom meeting for public comment here.

The Rio Grande Foundation submitted testimony in favor of HB 177.

In a meeting scheduled for 1:30 or after the Senate floor session this afternoon, the Senate Finance Committee will hear a great bill from Senator Pirtle. SB 234 would allow home school students to access the legislative scholarship lottery on par with students in public and private schools.

You can watch the meeting webcast here.

The Rio Grande Foundation submitted testimony in favor of SB 234.

In a meeting beginning tomorrow morning at 8 A.M., the House State Government, Elections, and Indian Affairs Committee will hear one good idea and another bad bill. HJR 6, the Termination of Emergency Declarations resolution, would limit the amount of time the governor could keep the state under an emergency declaration without legislative approval. This great piece of bipartisan legislation has already passed its first committee. The same committee will also consider HB 154, the Prescription Drug Affordability Act. Unfortunately, the bill proposes to create a new bureaucracy to review and cap drug prices, which is

You can find the webcast here, or join the Zoom meeting for public comment here.

The Rio Grande Foundation has submitted testimony in favor of HJR 6, and in opposition to HB 154.

The latest Wallethub report (out today) ranks states based on Coronavirus restrictions. New Mexico remains relatively shuttered (44th most open). Worse than that, as can be seen below, New Mexico is in the unenviable position of having MANY COVID restrictions AND a high death rate. 

Furthermore (according to the bottom chart), New Mexico also has a high unemployment rate which, not surprisingly accompanies those economic restrictions.