New Mexicans are still discussing and coming to grips with the results of the 2016 election, but government marches on. Bernalillo County’s commission will be voting on Tuesday night on the much-discussed tax increment development district (TIDD) for Santolina. The Rio Grande Foundation has opposed TIDD’s for Santolina. Libertarians and limited-government advocates like Randal O’Toole of the Cato Institute have  long opposed TIDD’s (known elsewhere as TIF).

The graphic below illustrates the gist of how TIF/TIDD work and why they are bad for taxpayers. It is hard to understand why handing $500 million to taxpayers would be a good idea when the New Mexico economy is in such bad shape and population growth is at a standstill.

RGF strongly supports economic development and growing NM’s economy, but not through costly subsidies. If you are concerned about this, feel free to drop your Commissioner a line: commission@bernco.gov

Congratulations on your Election Day victories, new and reelected New Mexico legislators.

How are you going to pay the bills?

As the above chart indicates, the Land of Enchantment is one of 19 states in which Q12016 revenue hauls, adjusted for inflation, have yet to climb back to their pre-Great Recession peaks. The Pew Charitable Trusts found that with a 6.7 percent drop since its apex, New Mexico ranks behind only New Jersey, Michigan, Oklahoma, Florida, Louisiana, Wyoming, and Alaska. (It’s worth noting that the Cowboy State and the Last Frontier derive significantly higher shares of their revenue from natural-resource taxes that New Mexico.)

Will a rebound in oil prices get big dough flowing to Santa Fe again soon? Maybe. But The Wall Street Journal’s recent survey of investment banks concluded that “oil prices will stay below $60 a barrel in 2017.” Not much hope there.

Absent a significant cutback in spending — a right-sizing of the bureaucracy, rollback of Medicaid expansion, sweeping, choice-driven reforms of K-12 education, meaningful reductions in higher education’s out-of-control expenditures, and abandonment of costly, failed programs that claim to foster “economic development” — the only option will be tax hikes. And New Mexico’s left-wing activists are just full of ideas for “revenue enhancement.” The levies on alcohol, cigarettes, vaping, personal income, and corporate profits are in liberals’ crosshairs.

Watch your wallet, taxpayers!

As the Rio Grande Foundation’s Dowd Muska predicted on this page, Santa Fe Mayor Javier Gonzales’s efforts to “explore active ways of reducing sugar intake among … residents” was simply a prelude to a sugar tax. Yesterday those suspicions were confirmed when the Mayor propose adding a 2-cents-per-ounce tax on soda, “sweetened teas and other drinks with sugar.”

Details are not clear on exactly what will be taxed, but soda is definitely on the hit list. Even diet soda will be taxed which makes absolutely no sense at all. Will sugary drinks like those from Starbucks be taxed? Good question. Also, you may not know that orange juice has more calories (153) per ounce than a can of Coke (140). Orange juice will NOT be included in the sugary drinks tax, however.

Rather than taxing at the point of sale, the proposed tax would be levied on distributors. In a shocking display of economic ignorance, Gonzales claimed that “distributors typically won’t pass costs like a tax on to the consumer.” I have no idea where he gets this stuff, but it is completely without basis in fact.

Also, the proposal calls for the funds generated by the tax to be used for that evergreen left-wing policy goal of pre-k/early childhood education. Unfortunately, these programs have proven time and again to be ineffective.

During three hours of Election Night coverage on KSFR, I  was told that Gov. Martinez was “steering” the New Mexico economy over the last six years. My response is that she may have been “steering,” but Michael Sanchez’s foot was controlling the gas/brakes. In other words, the Republicans’ control over policy in Santa Fe was very limited.

For the next two years New Mexico will be among the 13 or so states (pending final results) with both houses under Democrat control. More importantly, the leadership in both houses may shift to Santa Fe where Sen. Peter Wirth is the likely successor to Michael Sanchez and liberal firebrand Brian Egolf may be House speaker.

With these two smart but very liberal Santa Feans at the helm, Gov. Martinez will have her hands full. She may need to add ink to her veto pen but will likely face a barrage of constitutional amendments which circumvent the governor.

Of course, Martinez only has two years in office. The race for governor has already begun and it appears that Sen. Tom Udall is looking to get out of being in the minority in Washington and would rather run for governor here in New Mexico. I can’t blame him and that just means that Republicans will have an even bigger hill to climb to win that race.

It will be interesting to see what the Democrats have up their sleeves to turn New Mexico’s failing economy around. There isn’t enough money (with or without tax hikes) to implement their big-spending “Economic Opportunity Plan” but you can bet that tapping the “permanent fund” will be part of their funding plans.

Given the Democrats’ takeover of New Mexico’s Legislature in Tuesday’s election, the Land of Enchantment looks to be a ways away from any action on “right to work.” Senate Majority Leader Michael Sanchez, an ardent opponent of “right to work” was defeated, but with the House back under Democratic control and the Senate firmly under Democrat control, it will be tough sledding for proponents of free market reforms in the Legislature.

Around the country Kentucky and Missouri now seem primed to become the 27th and 28th “right to work” states in the country.

The trend of states looking to improve their economies by adopting “right to work” continues.

Interesting, but ultimately irrelevant was the failure of the “right to work” constitutional amendment in Virginia. The state is already a “right to work” state. A similar measure passed in Alabama. A South Dakota measure that would have undermined “right to work” was defeated overwhelmingly.

Lastly, it must be noted that with Trump winning the election, he’ll have the opportunity to nominate a conservative justice to the Supreme Court. Justice Scalia’s death caused the Friedrichs case to deadlock at 4-4 which kept some public employees locked into paying union dues even if they didn’t want to be part of the union. Should this or a similar case return to the Court, this would be another important pro-“right to work” development resulting directly from this election.

Trump supporters got what they’d hoped for on Election Day as “The Donald” is now the President-elect. Republicans nationally also performed well holding on to the US Senate and the House.

And, New Mexico Republicans notched some big victories as well. The two most important races were Majority Leader Michael Sanchez who was defeated and Judith Nakamura who won her race thus maintaining her seat on the Supreme Court. If you’d told me going into the election that these two races went the Republicans’ way, I’d have said it was a good night for Republicans in New Mexico…but it wasn’t.

There are still recounts to be held, but the Republicans lost the House and likely lost a few seats in the Senate. In other words, for at least two years and possibly more, the Democratic Party which has controlled New Mexico for most of its history, leading it to 49th and 50th rankings in so many areas, has been given the reins of control again after a mere two years of Republican control in the New Mexico House.

Here are a few of the races that tell the story of Election Day in the New Mexico Legislature.

Rep. Paul Pacheco (R) v. Damon Ely: There will be a recount, but Republican Pacheco is likely out;
Christina Hall (R) v. Liz Thompson: This was a tough race to succeed Rep. Conrad James in a 50/50 district. Thompson won comfortably;
Rep. David Adkins (R) v. Ronnie Martinez: This Northwest Albuquerque race was not on my radar screen heading into election night. Adkins has been a consistent voice for fiscal restraint in Santa Fe. As of this writing Adkins is up by a mere 2 vote margin. A recount will follow.
A few races went well for Republicans. Rep. Sarah Maestas-Barnes won a tough race and Republican Rebecca Dow will succeed Republican Dianne Hamilton, but the Democrats will soon be discussing leadership positions and laying out legislative priorities in the coming 60-day session.

In the Senate, once you get past Greg Baca’s convincing defeat of Michael Sanchez, thinks turn very bleak for Republicans. None of their pickup races in 50/50 districts panned out. Diego Espinoza was thought by many to have an inside track against incumbent Democrat John Sapien. Espinoza lost by 150 or so votes, but there may be a recount. Republican challengers Ceil Levatino and Eric Burton went down to defeat and Ted Barela who had been appointed by Gov. Martinez to fill seat of disgraced former Sen. Phil Griego lost.

Incumbent Republican Lee Cotter had a tough race and got crushed while the biggest shocker was incumbent Republican Lisa Torraco losing.

In summary, with a few notable exceptions, Republicans took it on the chin in legislative races. Gov. Martinez will have
an even tougher time getting any of her agenda passed in Santa Fe. Right to Work and other economic reforms are highly-unlikely. And, while Michael Sanchez may have been singularly difficult to deal with, Democrats will be anything but chastened by these results. They are not likely to give Martinez an inch.

In other words, in a “anti-status quo” election, New Mexico reverted to “status quo” in a big way. More to come on what this means for New Mexico’s economy and the gubernatorial election which is right around the corner.

What if you had a new, popular technology that was creating hundreds of new jobs for New Mexicans in this economically-challenging time? What if, at the same time, this technology was replacing an old, more harmful product that had been detrimental to Americans’ health for decades?

Smart politicians would push to encourage and incentivize this life-saving technology. Unfortunately, the opposite is true. A burgeoning industry could be under attack from bureaucracies in Washington. There is a debate going on right now in Congress over how to fix new Food and Drug Administration (FDA) vapor product regulations that would gravely disrupt the new vaping industry unless those FDA rules are amended.

According to the Centers for Disease Control, 480,000 people die from smoking in the United States alone every year. The health effects of vaping are being studied and debated, but study after study has found the health effects of vaping to be safer than smoking. Vaping has also helped large numbers of people quit smoking.

Senator Heinrich can continue to help improve the lives of hundreds of thousands of people annually by supporting the Cole-Bishop amendment already passed by the House of Representatives in an agricultural spending bill this year. The amendment would prevent the FDA from applying an arbitrary application and approval date – also known as the predicate date – to existing vaping technology. If the Congress fails to fix the FDA rules, our federal government could be complicit in keeping smoking rates higher than they would otherwise be.

Senator Heinrich, along with New Mexico’s delegation as a whole, should work to correct the ill-conceived predicate date of the FDA’s rules.

It is not difficult. Regulators must take their cues from Congress and, while further study and even some reasonable regulations are worth consideration, there is growing consensus that vaping is a safer alternative. For that reason alone, it is impossible to justify the FDA’s currently-proposed regulatory scheme which would effectively prohibit almost all of the vapor products in the marketplace today until they have been subjected to FDA’s complex approval process.

And then there are the jobs. New Mexico faces the 2nd-highest unemployment rate in the nation at 6.7 percent. More than 4,200 New Mexicans lost their jobs in September alone.
While they may disagree on how to do it, New Mexico’s entire Congressional delegation acknowledges the need for more jobs back home. And, when it comes to private sector jobs, two of New Mexico’s real growth areas are in micro-breweries and the vaping sector.

No matter what you think about the viability or morality of these industries, the fact is that people today are demanding unique, locally-brewed beer and unique, safer ways of consuming nicotine. These industries are paying millions of dollars in taxes and employing thousands of people throughout our state. If Senator Heinrich is serious about doing what he can to preserve and expand job opportunities in our economically-troubled state, it would behoove him to help amend the FDA rules so that they do not inadvertently wreck an industry that is providing worthwhile benefits to consumers.

Average New Mexicans, especially vape users, traditional smokers, and those trying to quit, can help by contacting Senator Heinrich and their respective Representative and tell them to “Fix the FDA’s new vaping rules!”

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

New Mexico’s two major dailies have been devoting a lot of attention to the advertisements funded by political action committees. The entire legislature is up for grabs on Election Day, and big bucks are being spent to determine which party will control which chamber.

But this sentence, in an article written by the Santa Fe New Mexican’s Andrew Oxford, caught the Foundation’s attention: “The state’s election watchdog does not have any authority over the content of campaign ads.”

In 2015, a legislator tried to do something about that. Senator Howie Morales sponsored SB 675, the “Truth in Political Advertising Act.” It appropriated $5 million to the attorney general to appoint “review agencies” — “public or private [entities] chosen by the office of the attorney general” — that would score every TV commercial, radio spot, and mailing for “truth or falsity” and the extent to which the communication was “misleading.” Scores would range from 1 (“untruth or false”) to 5 (“completely truthful”). Candidates and organizations not agreeing to scrutiny would be assessed a fine “of two times the cost of producing and distributing the advertisement,” and made to disclose that their ads have “not been submitted for a rating.” Refusal to include the disclaimer would induce “a fine of twenty times the cost of producing and distributing the advertisement.”

Rather curiously, SB 675 exempted judicial offices and legislative races. So if it had passed, this year, the review agencies would be scoring just the secretary of state, bail-reform, and GO-bond campaigns.

Fortunately for the cause of free speech, Morales’s bill didn’t get far. An analysis by legislative researchers raised the thorny issue of the attorney general’s office warning that “SB 675 may violate the First Amendment.” (No kidding.)

Few voters like negative campaigning, and the flood of often-nasty election ads appearing on screens and in mailboxes can get annoying. But the best way to sort out the charges and counter-charges is to let reporters, editorial pages, columnists, bloggers, and watchdog groups of varying perspectives and ideologies offer their analysis. A truth squad overseen by the attorney general is no way to help voters make up their minds.

In 2003, at a Capitol Hill briefing, the Cato Institute’s Jerry Taylor warned that the NIMBY fights so common over oil-and-gas drilling are “there, waiting to happen, in the renewable-energy sector.”

The scholar’s prediction was borne out, most famously, with the Robert Kennedy, Jr.-led opposition to the Cape Wind Project, to be sited in Nantucket Sound. (Can’t mar that fantastic view from Hyannis Port.) But plenty of less-high-profile attempts to build the infrastructure of a “green” future have been torpedoed by eco-agitators. One could be taking place right here in the Land of Enchantment.

In 2005, Congress established “the development of environmentally responsible renewable energy as a United States Department of the Interior priority,” and obligated the U.S. Forest Service to “facilitate the development and production of geothermal energy.” In response, federal land-management bureaucrats identified the Santa Fe National Forest — specifically, the Coyote, Cuba, Espanola, and Jemez Ranger Districts — as having significant potential for geothermal leasing. Earlier this year, several public meetings were held to “provide a brief overview of the draft environmental impact statement on the potential effects of geothermal energy development on land within forest boundaries.”

Unsurprisingly, New Mexico’s environmental left is squealing. The New Mexico Wilderness Alliance warns of geothermal’s effect on water, endangered species, and seismic activity. In addition, the organization claims that the “levels of management which would be required” to protect the forest’s resources “are unreasonable, and not practical even for the industry.”

For good measure, the All Pueblo Council passed a resolution asserting that leasing would “exasperate impacts to the Pueblo Nations,” since the “land known as the Santa Fe National Forest has been occupied and used by the Pueblos from time immemorial and continues to be of profound spiritual and religious importance because of the sacred areas within, and the necessary uses of the forest, including the subsurface use of aquifers and natural springs, to maintain Pueblo culture and tradition.”

The Geothermal Energy Association thinks New Mexico has the potential to create 1,840 full-time jobs in the industry. But the state’s not likely to see such an employment boost, so long as the bait-and-switch over renewable energy — i.e., claim it’s preferable to “fossil fuels,” then oppose the siting of wind, solar, and geothermal projects — continues.

With the health care law known as “ObamaCare” clearly failing on its own terms (in terms of keeping your health plan and “bending the cost curve”) , there has been a lot of talk among the Law’s defenders about “fixing” it. Former US Senator (D-NM) Jeff Bingaman was recently quoted along these lines and former President Bill Clinton has both called aspects of the Law “the craziest thing ever” and argued for undisclosed “fixes” to it.

It is hard to understand why Democrats didn’t “fix” the law the first time around when they passed it through Congress with overwhelming majorities and zero Republican votes. It is pretty clear that any “fix” simply means further expansion of government’s role in health care.

What Bill Clinton and ObamaCare’s defenders fail to understand is that American health care was NOT a free market system BEFORE ObamaCare. In fact, the health law actually locks in the worst problem with American health care: third-party payment and does NOTHING to increase the presence of market forces.

ObamaCare cannot be “fixed.” It can be repealed and “replaced” but not with another third-party payment scheme (whether that is through the tax code or government programs) with something resembling a free market or the system will slowly morph into a “single-payer” system with all the issues that entails. I know that is the game plan for many, but it would be worth at least trying the free market before embracing socialism.

The Center for Opportunity Urbanism‘s Wendell Cox has devised a system that, as his colleague Joel Kotkin describes, determines “metropolitan areas where salaries are relatively high relative to costs, and you get more for your paycheck.” The Center’s “Standard of Living Index” analyzes “the 2015 mean pay per job in the 106 metropolitan statistical areas with more than 500,000 population and adjusts it by cost of living. Metro areas that have a large proportion of high-wage jobs tend to do best, such as San Jose … and Houston. The biggest differences in terms of cost of living generally have to do with housing; costs for goods varied by 23 percent and for services by 35 percent in 2014 across the metropolitan data, but for rents the differential between the most and least expensive metro areas is 194 percent and, for housing purchased in 2014, a remarkable 775 percent.”

For New Mexico’s sole metro region on the list, the finding isn’t good. Albuquerque ranks #82. Taking a look at the cities in its neighboring states, the picture is equally ugly. Of its 15 competitors, the Duke City just about tied Tucson, and bested only Provo, El Paso, Ogden, and McAllen. Ten metro regions prevailed over Albuquerque. Houston’s victory was crushing — annual pay per job there was 30.2 percent higher.

Kotkin recommends that metro areas seeking to “improve in these rankings need to focus not just on developing their economies, but also policies that keep costs competitive with other regions.” At the city, county, and state levels, lower taxes, smarter spending, and lighter regulations are needed to boost Albuquerque’s subpar standard of living.

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 October, of 10,490 projected jobs, 8,602 — 82 percent — were slated for right-to-work (RTW) states:

As for the sub-metrics the Foundation scrutinizes:

* Ten 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. Thirteen projects are headed to RTW states, with three to occur in a non-RTW state.

* Both domestic relocations made the jump from non-RTW to RTW states.

* One foreign-owned firm relocated its headquarters, moving (surprisingly) from a RTW to a non-RTW state.

Marquee RTW investments included Vector Space Systems’s pick of Arizona for its new factory (400 jobs), KLX Aerospace Solutions’s decision to build “a new corporate headquarters with a state of the art distribution center” in Florida (400 jobs), the opening of ABB’s “advanced technology manufacturing facility” in Mississippi (300 jobs), and OKI Data Corporation’s selection of Texas for a new operations hub (100 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 Legislative Finance Committee recently issued a report that, to the casual observer, might make indicated that the state bureaucracy in the Land of Enchantment has been “cut to the bone” due to recent budget issues.

It may be true as the LFC says that the ranks of state employees have shrunk to the lowest level in almost a decade. What is definitely true is that more cuts are ahead due to the dire budget situation and the weak rebound in oil and gas prices. According to the LFC report, the number of state employees has declined 3.4 percent since this time last year and 12 percent over the last eight years.

In the comments section of an article written by Andrew Oxford in the Santa Fe New Mexican which noted that we at the Rio Grande Foundation believe New Mexico government needs to shrink further, Rep. Christine Trujillo (former teachers’ union head) stated that my organization “wants to follow Grover Norquist’s desire to shrink all government down to a size where I can drag it into the bathroom and drown it in a bathtub.”

Metaphorical drownings aside, it is indeed our view that New Mexico’s government can and should shrink significantly. Fortunately, when New Mexico’s bureaucracy is compared to those of other states, particularly our neighbors, it is clear our State has plenty of room to cut.

According to data from Governing Magazine, New Mexico has the 8^th-highest ratio of state government workers relative to its population nationwide. The real size of New Mexico’s bureaucracy becomes clear when you compare our levels of state employment with the levels found in neighboring states.

According to the same report, New Mexico has 128 state employees per 10 thousand people. Texas, on the other hand has 65 and Arizona and Colorado each have 63 state workers per 10 thousand people. Utah has the highest ratio of state employees among New Mexico’s neighbors with 95 per 10 thousand people.

In other words, New Mexico’s bureaucracy may be a bit smaller than it has been, but our state employment per capita is much higher than it is in neighboring states. Policymakers should continue to shrink State government.

But this “right-sizing” can’t be achieved by just leaving existing positions unfilled. Rather, it must be done by thoroughly reevaluating all areas of New Mexico government and eliminating unnecessary institutions, agencies, commissions, and programs.

This is not meant as a criticism of those government workers. In fact, when positions are left unfilled, work loads do get heavier for those remaining. But it is high time to rethink the way New Mexico government operates.

As a starting point, past LFC reports have found that New Mexico has too many institutes of higher education and too many branch campuses. Those sites and schools could be consolidated in ways that improve student outcomes and cut costs at the same time.

Another report (this one from the Census Bureau) finds that New Mexico’s K-12 administrative spending as a percentage of per-pupil spending is severely out-of-whack with levels found in other states. New Mexico was at 15 percent while the 2^nd-highest state was North Dakota at “just” 9.4 percent.

The ongoing budget crisis should be seen as an opportunity to improve efficiency in some areas and eliminate or reduce government’s role in others.

I’m not sure at what size New Mexico government would be small enough to drown in Grover Norquist’s proverbial bathtub, but I know we’re not even close. State government in New Mexico remains bigger than it is in most other states.

Worse, absent a miracle turnaround in oil and gas prices or dramatic economic policy reforms resulting in strong private sector growth, we can’t afford the government we have. If serious changes aren’t made, red ink, not a bathtub, will be the cause of New Mexico’s demise.

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

A chart showing how New Mexico’s state bureaucracy compares to its neighbors can be seen below:

Source: Marijuana Policy Group, “The Economic Impact of Marijuana Legalization in Colorado”

Proponents of marijuana legalization often cite its potential to boost states’ tax revenue. It’s an argument that the Foundation finds compelling, as Errors of Enchantment has noted before.

But a new report on the economics of the pot industry in our neighbor to the north supplies another justification: economic development.

The Marijuana Policy Group, a “collaborative effort between researchers from the University of Colorado Boulder Business Research Division and BBC Research & Consulting in Denver,” has crafted “the world’s first marijuana economic impact model,” with the goal of helping Colorado “voters, policymakers, and regulators understand how … legalization impacts the state economy.”

Some of the MPG’s findings:

* With the market — at least for now — totally under the control of the state, nearly “all spending on marijuana flows to workers and businesses within the state.”

* As the above chart indicates, in 2015, legal marijuana supported 18,005 direct, indirect, and induced full-time equivalent jobs in Colorado.

* While workers in retailing “have relatively low average wages and few fringe benefits,” more than 75 percent of industry employment is in other fields, including management, manufacturing, and agriculture specialties.

* Ancillary job-creation is on the rise as the industry matures and boosts demand for “law firms, consultancies, and … professional service providers.”

* In 2015, sales “grew by 42.4 percent, to $996 million.”

Here’s the full analysis. Definitely worth a careful perusal by all working to revive New Mexico’s moribund economy.

If marijuana legalization is inevitable, why not be an “early adopter” — and reap both the fiscal and economic benefits?

As votes continue to be cast for ALL legislative races in New Mexico, the issue of “right to work” hangs in the balance. The Rio Grande Foundation tracks national job creation data on “right to work,” but time marches on and “right to work” states continue to flourish relative to their “forced unionism” brethren.

Vincent Vernuccio of the Michigan-based Mackinac Center had the following data in a recent piece published in the St. Louis Post-Dispatch. Some highlights from that article follow:

*From 2000 to 2015, personal income in right-to-work states increased 91 percent compared to 72 percent in non-right-to-work states, according to the U.S. Bureau of Economic Analysis.

*Data from the U.S. Bureau of Labor Statistics shows that since right-to-work was passed in Michigan, weekly earnings increased by almost 5 percent or $38.86 per week on average. In Indiana, which also recently enacted right-to-work, earnings are up. Since 2012, they have increased by $83.87 per week.

*When we look at what people can actually buy with their money, workers in right-to-work states have 4.1 percent higher incomes than workers in non-right-to-work states.

*Census data show that people are voting with their feet. Population increased 22.3 percent in right-to-work states but only 9.5 percent in non-right-to-work states from 2000 to 2015.

*Over 480,000 people moved to right-to-work states from July 2014 to July of last year.

*All seven of the top states for private-sector job growth from 1995 to 2015 were right-to-work states.

This election will determine control of the New Mexico Legislature. We don’t get to vote on Senate control for another four years. Absent market-based reforms like “right to work,” New Mexico’s poor economic performance (and difficult spending cuts) is likely to continue.

Fair’s fair. A few weeks ago, Errors of Enchantment looked at the communities that impose the highest gross receipts taxes in New Mexico. Now let’s examine where the levy hurts the least.

The unincorporated regions of the counties below impose the lightest GRT rates — 6.1250 percent or less. Unfortunately, but not surprisingly, the counties are all quite rural, so the benefits aren’t widespread.

Beyond the unincorporated-county level, the picture doesn’t get much brighter. Bonito Lake, owned by the City of Alamogordo, imposes a rate of 5.5000 percent. But the facility, damaged by the Little Bear Fire in 2012, won’t be reopened until 2018. Other jurisdictions of limited value to Joe and Jane Taxpayer include the Lovington Industrial Park (5.5000 percent), Socorro Industrial Park (6.0000 percent), and Clovis Municipal Airport (6.1250 percent).

At 7.3125 percent, the GRT rates in Albuquerque and Los Alamos are the lowest for New Mexico’s major municipalities. But tribal lands shouldn’t be overlooked — Kewa Pueblo (Sandoval County), the Jicarilla Apache Nation, Laguna Pueblo, Pueblo de Cochiti, Pueblo de San Ildefonso, Sandia Pueblo, and Santa Ana Pueblo all impose a rather forgiving rate of 6.2500 percent.

In its October newsletter, the Legislative Finance Committee claims that the “number of state employees is down 3.4 percent compared with this time last year and is down 12 percent from FY09.” (See graph, taken from the publication, above.)

The LFC appears to be counting state workers outside the higher-education system, but that’s a very dubious approach. Toss in the number of employees (full-time equivalent) for New Mexico’s colleges and universities, and the total number of people on the state’s payroll more than doubles.

But the proper way to count nonfederal “public servants” is to tally both state and local employees. By that measure, labor productivity has been disappointing during the last decade and a half. The chart below shows how little has been accomplished. The peak number of jobs came in 2007. Since then, the number of positions has fallen by just 5.9 percent — not impressive, given the state’s drooping population and the increasing availability of technology that enhances per-worker output.

This summer, Governing magazine did some computations that should make every New Mexico taxpayer blanch. It found that when all states are ranked, New Mexico has the 10^th highest ratio of noneducation public employees to population. The comparable metric for the state’s K-12 schools wasn’t too bad, landing at about the median. But for the colleges-and-universities ratio, the finding was mighty scary. New Mexico fell behind only North Dakota as the state with the most higher-education employees.

The bottom line? Month-to-month — and even year-to-year — analyses of government payrolls aren’t very useful. It’s best to look at the long-term trend, counting at both the state and local levels. Examining how the Land of Enchantment compares with other states is essential as well. When those data are scrutinized, it’s clear that taxpayers in New Mexico can justifiably demand more from the men and women on public payrolls.

“Health groups” held a rally in Santa Fe yesterday to push for hiking the state’s taxes on tobacco. It’s a familiar refrain — smoking kills, it drives up the costs of “public” health insurance, government must aggressively target bad habits, yadda, yadda, yadda.

But those who consider tobacco-tax hikes a silver bullet for revenue-creation and improved health outcomes don’t study the issue closely enough. Smokers respond to higher coffin-nail taxes in several ways. One is border-crossing. As a Clovis clerk lamented in 2010, when New Mexico’s tax became higher than the levy imposed by our neighbor to the east, “All the Texas-jumpers are going to stay home. Why pay more and use your gas to come up this way?”

Smuggling is another byproduct of higher cigarette taxes. Recent work by the Mackinac Center for Public Policy and Tax Foundation found that smuggled smokes’ share of  total cigarette consumption in New Mexico is quite high — fourth in the nation. “Excessively high taxes” on cigarettes, researchers wrote, foster “many other unintended byproducts,” including “violence against police, people and property.”

After New Mexico’s last cigarette-tax hike, revenue did rise. But the “progress” was brief: For the past five fiscal years, the funds generated have been flat. (See graph below.)

However popular, higher taxes on politically incorrect products aren’t the answer to New Mexico’s fiscal woes. The state’s spending gap must be closed with smart cuts and an effective economic-development strategy that yields adequate revenue for government’s legitimate duties.

There has been a lot of talk about “rigged” elections this year and, while we don’t buy into the conspiracy theories, giving one side unlimited resources and giving another zero resources certainly comes close to determining the outcome of an election, right?

Take the $140 million in higher education bonds on the ballot this fall in New Mexico. If you log on to UNM’s website, you’ll find a large message (screen shot below) urging you to go vote for the higher education bond.

A website solely dedicated to passage of Bond C is available to tout the benefits of passing the bond along with the requisite claims about “no tax hikes” and job creation. What is never mentioned is how taxes would go down or how many jobs might be created if people kept their own money instead of having it taxed away.

And, not that I’m complaining (because we wouldn’t take it anyway), while the “pro” side obviously has access to deep pockets from those who would benefit from the flow of your tax dollars, those who want to see taxpayers keep their money must rely on their own resources or those of donors “to the cause.” Perhaps the Legislature should put a stop to some of the most egregious abuses such as express advocacy on a taxpayer-funded website like UNM’s?

Think the special session, and the governor’s signing of its budget-cutting bills, have resolved New Mexico’s deficit woes? Think again. Yesterday brought two pieces of bad news on the fiscal front.

First, Moody’s Investors Service “downgraded the State of New Mexico’s general obligation bonds to Aa1 from Aaa, affecting $327 million of outstanding debt.” In addition, the firm “downgraded to Aa2 from Aa1 the state’s Lease Appropriation Bonds (Fort Bayard Project) Series 2008, issued through Grant County, affecting $53 million of outstanding debt; and downgraded to Aa2 from Aa1 the ratings of the New Mexico School District Enhancement Program (post March 30, 2007) and the New Mexico School District Enhancement Program (pre March 30, 2007), affecting approximately $2.1 billion in enhanced school district debt.”

Moody’s action on the GO bonds was “driven by the depletion of general fund reserves following a very large and unanticipated shortfall in tax revenues for fiscal 2016 and 2017. Reserves are expected to equal only 1% of recurring revenues at the end of fiscal 2017, even after significant budget balancing actions taken by the legislature in a recent special session.”

Second, the Legislative Finance Committee released a revenue report for accruals through July. Total recurring revenue for the first month of the new fiscal year “was $384.3 million, down 10.7 percent from the same month a year ago.” GRT for July “represented the lowest July number recorded since July 2010.” Revenue from the personal-income tax was down, too. See the graph above for a breakdown by source.

One month isn’t a trend, of course — perhaps things will improve. But New Mexico’s unemployment rate is now the highest in the contiguous states. The LFC report noted that only three industries in the private sector gained jobs year-over-year. Mining employment, battered by the decline in oil-and-gas production, fell by 27 percent. Manufacturing dipped by 6 percent, and retail trade shrank by 1.7 percent.

There’s every reason to believe that we haven’t seen the last of the Land of Enchantment’s river of red ink. Get ready for an exciting 2017 legislative session.

Immigration has been a hot-button issue in the 2016 election between Donald Trump and Hillary Clinton. No matter what your position is on immigration policy, it is widely recognized that a leading motivating factor behind immigration is the search for better work opportunities.

The conservative Heritage Foundation (which favors strict limits on immigration) has put out a very interesting chart (below) detailing the growth of immigrant populations by state between 2010 and 2014. Interestingly, New Mexico saw a zero or even negative “growth” in its immigrant population. It was one of a handful of states to do so. Not surprisingly, all of New Mexico’s faster-growing neighbors had faster-growing immigrant populations.

Whether you are a fan of immigration or not, this comports with New Mexico’s slow overall population growth (especially as compared with other Western states). It is yet another indicator of New Mexico’s challenged economy. Check out the detailed post from Heritage Foundation.

Yesterday, the Santa Fe New Mexican’s Bruce Krasnow examined “From Volatile Severance Taxes to Sustained Revenue,” a Pew Charitable Trusts analysis of how states use the revenue they derive from levies placed on natural resources. The reporter dutifully traced the history of the Land of Enchantment’s Severance Tax Permanent Fund (STPF), writing that it “was created by the Legislature in 1973 and given constitutional protection by voters three years later. Money from it is used to pay off capital construction projects around the state known as severance tax bond projects. Money is also transferred every year to the state general fund, which pays for the day-to-day operations of state government, from courts to public education.”

As Pew’s researchers noted, the STPF’s purpose is “implied and broad” rather than “explicit and narrow.” And unlike similar accounts in Alaska, Wyoming, and West Virginia, legislators are permitted to withdraw from the fund’s principal.

The report should be required reading for lawmakers and candidates for the legislature. A look at how other states handle severance-tax revenues is valuable, and a discussion on how the STPF serves New Mexico taxpayers is overdue. But beyond technicalities, the fund’s very existence should be debated.

All taxes on “natural resources” are predicated on the notion that revenue from non-renewable commodities should be “invested” for “future generations.” The justification has a superficial appeal, but it suffers from a fundamental misunderstanding — one well-articulated by the Institute for Energy Research’s Robert L. Bradley Jr.: “What are resources today may not be tomorrow, and vice versa.”

Economist Erich Zimmermann wrote that resources “are highly dynamic functional concepts; they are not, they become, they evolve out of the triune interaction of nature, man, and culture, in which nature sets outer limits, but man and culture are largely responsible for the portion of physical totality that is made available for human use.” (Petroleum offers an excellent example. Technological advancements enable drillers to return to “played out” wells for another crack at extracting black gold.)

New Mexico faces an almost existential crisis. It is losing population, its economy is arguably the worst in the nation, and it may not be able to meet meet its long-term unfunded liabilities. Perhaps the best way the STPF — along with its sister account, the far bigger Land Grant Permanent Fund — can serve the state’s future is to go away. Spending down the funds over a decade would enable the state to eliminate its taxes on personal and corporate income. Real economic-development policies would go a long way toward ensuring that New Mexico actually has a future.

New Mexicans are desperate for some good economic news (see the grasping for straws over the Facebook “success”).

Unfortunately, the path forward involves making hard and politically-difficult moves that involve standing up to special interest groups whether they be the unions, the film industry, or business advocates for more “corporate welfare” like LEDA and JTIP (to name just a few). Unfortunately, the free market path to reform isn’t going to be the first choice of a Council stocked with dozens of politicians and interest group representatives.

So, according to today’s Albuquerque Journal, here is what they came up with followed by a brief statement added by the author:

Expanding broadband access: This CAN be done by removing regulatory barriers (and we support that) but most broadband discussions are involve more tax dollars (that we don’t have);

Marketing New Mexico to retirees: An obvious idea because retirees don’t NEED jobs and New Mexico has nice weather. Fine idea as far as it goes, but it really isn’t a jobs creation strategy unless you work in food-service or retirement homes;

Expanding the state’s film incentive program: This costs money which we don’t have and study after study says film subsidies are money-losers.

Enacting or broadening tax breaks, including one for out-of-state investors: New Mexico has enacted numerous such incentives over the years with dubious results. Perhaps it is time for real tax reform?

Ironically, the many coordinating the Jobs Council was quoted as saying that New Mexico was at risk of a “death spiral” if it continued “business as usual.” Unfortunately, “right to work,” real school choice, and tax/regulatory reform were never going to come from this “Jobs Council.”

The Clinton vs. Trump morass seems to have sucked all of the oxygen out of the 2016 election. New Mexico is not identified as a “swing state” worthy of too much time and attention from either major candidate, so in a sense we are lucky enough to have a (relative) reprieve from the pounding drumbeat of presidential campaign ads that are running in other stats.

While we are not a “swing” state, the reality is that New Mexicans are voting on some very important candidates and issues this fall. In fact, I’d argue that in New Mexico there are no more important votes to be cast than the ones for your state representative and senator.

It is no secret that New Mexico’s economy is in bad shape. The combination of over-dependence on oil and gas and an under-developed private sector has left New Mexico with the 2^nd-highest unemployment rate in the nation, high poverty rates, and few growth prospects.

Weeks ago, Gov. Martinez was forced to call the Legislature in for an acrimonious special session to discuss ways to cut hundreds-of-millions of dollars from the budget. While crime-related bills were added to the agenda, New Mexico’s myriad social and educational problems are worsened by both poverty and the lack of economic opportunities available in many corners of our State.

So, to summarize, the most important elections this year are for the Legislature (followed closely by New Mexico’s Supreme Court) and the most important issues are economic. Turning our moribund economy around is the critical starting point to solving any of New Mexico’s problems.

Notably, New Mexico is surrounded by states that are more economically-free, pro-business, and have stronger economies. Those are the policies that can help New Mexico prosper, but it starts with the Legislature embracing them.

Specifically, New Mexico voters should consider candidate stances on issues like:

• Right to work: Legislation along these lines passed the New Mexico House in 2015 only to be killed in the Senate. The Rio Grande Foundation has been tracking real job creation nationwide in “right to work” and “non-right to work” states for nearly two years as reported by Area Development Magazine.

With the states about evenly split in terms of being “right to work” or not, from January 2015 through September 2016 (21 months), the jobs *total* was 305,566. “Right to work” states got 239,124 or 78.3 percent of those jobs.

• School choice: We know monopolies like the Post Office don’t work very well. Shouldn’t we give our children the opportunity to learn in the ways that make the most sense for them? While not making the headlines of Gov. Martinez’s other education agenda items, in 2015 a school choice bill passed out of the House only to be killed by the union lobby in the Senate;

• Prevailing wages: A lot has been made over reforming New Mexico’s arcane capitol outlay process and we support reforms. But New Mexicans are being forced to over-pay for roads, schools, and bridges by 10-20 percent due to the influence of powerful special-interests.

Under New Mexico law, “public works” projects pay inflated wages set by political, not economic considerations. Reforms have been introduced in the Legislature only to be killed by those who care about campaign contributions more than having well-maintained schools, bridges, and roads.

These are just a few of the literally dozens of proven economic reforms that need to be addressed by the Legislature in order to unlock New Mexico’s economic potential. Before you vote, find out what candidates in your area have to say about them.

As early voting continues and we head towards Election Day, we can’t get caught up in the drama and anger over the presidential race. We have a rare opportunity to chart a new course for New Mexico by electing legislative candidates that support economic reforms. Focus your time and attention on those all-important races.

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