Government is bureaucratic and slow. This goes without saying. But it also fails to keep up with reality. After all, millions of entrepreneurs are out there experimenting (and usually failing) to get rich by coming up with “the next big thing.” Government responds to political pressure and is filled by people who want to hang onto their jobs, not find the newest innovation.

Two recent examples come to mind from Albuquerque that involve government enacting or putting forth policies that run directly counter to societal trends and technology:

1. Albuquerque Rapid Transit: The new bus system along Central is now underway whether the locals like it or not. Interestingly, while Mayor Berry and the City embrace buses, a mode of travel that is nearly 100 years old, the City of Pittsburgh is now home to the first-ever self-driving Uber cars. As if to mock Albuquerque’s embrace of old tech, Singapore has announced that it has self-driving taxis. I’m sure the millennials will be VERY impressed by Albuquerque’s new bus system though.
2. Mandatory Paid Sick Leave: A local ballot measure could be on Albuquerque ballots as soon as November depending on what happens at Thursday’s Bernalillo County Commission meeting.Interestingly, the trend among employers (also benefiting employees) runs in the opposite direction according to the article, “Why so many employers are getting ride of paid sick days.”

As the article notes:The decision to group all the PTO together started as a way to ease the administrative duties of tracking individual sick and vacation schedules, Meridith Burrows, The Cheat Sheet’s vice president of human resources, said in an interview. However, it also matches the culture of the company, whose entire staff works remotely from destinations all across the United States and abroad.

“We’re a flexible company, and this is just one more way that we can flexible,” Burrows said. Bundling PTO together also has another advantage, in that most employees avoid last-minute days off unless they are truly sick. If they know they’re planning to be away or might need the personal day after an active weekend, it’s within their ability to ask off ahead of time, without worrying about using sick days versus vacation PTO.As a media company that balances the demand for new content with the needs of its employees, that extra heads-up is helpful, Burrows said.

“Why would we want to encourage last-minute reporting like that?” she asked. “We’d rather know that information up front.” Restricting personal time off to sick days just encourages people to be dishonest — or to feel like they’re not believed when they actually do need a sick day. “We don’t want people to have that feeling,” Burrows said. “It’s not treating people like the adults that they are.”

Treating people like adults, what a novel concept! Rather than telling them how to live or telling them which days to take off an how, perhaps it is time for Albuquerque’s policymakers to treat us like adults?

There have been several news accounts lately on government-run higher education in New Mexico. Let’s sort it all out.

The Albuquerque Journal reported that UNM awarded 5,674 degrees last academic year — a record. But consider these caveats: The four-year completion rate “was on track to exceed 20 percent for the first time in years,” and the school “trimmed the number of credit hours required to earn most bachelor degrees from 128 to 120.” And don’t forget that with the state’s economy stuck in neutral, many of the newly degreed will will be seeking employment beyond New Mexico’s borders. (The state has never shown any interest in tracking how many of its subsidized college grads remain in the Land of Enchantment.)

In an interview with the Santa Fe New Mexican, Rep. Jimmie Hall (R-Albuquerque), the vice chairman of the Legislative Finance Committee, had some sobering words for higher education’s administrators: “I will be very blunt. Everybody who has talked to me — constituents, lobbyists, legislators and staff — has said, ‘Take it out of higher ed.’” The lawmaker was referring to how best to deal with the state’s severe budget crisis.

Austerity, to some degree, is already in place. In the current fiscal year, $828.5 million in “recurring general fund revenues” were appropriated to the Higher Education Department — a 2.4 percent cut from the previous fiscal year. More is likely on the way. But the system’s supporters should consider the words of ENMU President Steven Gamble, who admitted last week that his school “got through a 21 percent budget cut several years ago.”

As the Foundation has recommended, campus sprawl offers a prime opportunity to reduce costs. While we’re not often in agreement with the New Mexican’s editorial page, today it noted that the state’s “colleges and universities have grown in too haphazard a manner, with little thought to preventing duplication, stopping vanity growth or focusing on needs rather than wants.” The paper offered some stinging examples of the sprawl problem: “Did The University of New Mexico need a westside campus, just a 40-minute drive from the main UNM campus in Albuquerque? Or how about New Mexico Highlands University? It has seven branches — Albuquerque, Rio Rancho, Santa Fe, Española, Farmingon, Raton and Roswell. There are branches upon branches, with the growth akin to the adobe houses built one room at a time, with a lack of central planning.”

Higher education has long been a sacred cow at the legislature — shielded from accountability, and regularly infused with new wads of cash. The dropout and remedial-training issues have been ignored, and few have been willing to question policies that essentially subsidize the quality of other states’ workforces. But staring down a river of red ink, lawmakers might finally be willing to subject the state’s universities and colleges to an overdue right-sizing. Taxpayers would be grateful.

With New Mexico facing budget deficits in excess of $600 million, one might be led to believe by some left-wing advocates that state government simply doesn’t have money to do the basics these days.

James Jimenez of NM Voices for Children blames “tax cuts” (too little money) for everything from the ” backlog of rape kits” to the backlog of applications for medical marijuana ID cards.

The reality is that New Mexico’s government is hardly starved for cash. The State spends far more per-capita than do its neighbors (nearly double what Texas spends). Original data available here, see the chart below as well:

Allen Sanchez represents CHI St. Joseph’s Children and the Catholic Church as a lobbyist in Santa Fe. He had an article in today’s Albuquerque Journal that I consider nothing short of outrageous in which he attempts to connect the deaths and abuse of dozens of New Mexico children over the last decade or so to the latest government “solution” to the problem which is tapping the permanent fund to create a system of home visits. He claims offhandedly that “home visiting programs have been proven to prevent child abuse,” but offers zero evidence for that statement.

Indeed, the only evidence Sanchez brings forth is a statement by Dr. Victor Strasburger, professor of pediatrics at the University of New Mexico, “Poverty seems to be the common denominator.” In other words, New Mexico’s lousy economy may be the issue, not some new government program he’s pushing (a point we’ve made in the past).

It all strikes me as, to quote Rahm Emmanuel “You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.”

There is no doubt that New Mexico children face real problems (like the rest of the state). The liberal Voices for Children didn’t even include “home visits” as a factor in its report ranking 49th for children. That said, here is a partial list of all the myriad issues facing New Mexico kids that have NOTHING to do with yet another government program:

1) Poverty;
2) Breakdown of two parent family;
3) Welfare dependence;
4) Drug abuse;
5) Family culture of abuse;
6) Failing education system;
7) Failing economy/lack of jobs;
8) Social isolation;
9) Failing criminal justice system;
10) Lack of religious faith/participation

These are just a few of the very serious issues that impact New Mexico’s children. Some of them can be fixed rather easily by public policy reforms. Some of them are very difficult to address at all. What do you think? Any additions to the list? It is particularly troubling to me that Sanchez attempts to justify his preferred government program as a simple solution to what by all accounts is a very challenging and multi-faceted problem.

Supporters of Albuquerque Rapid Transit have reason to rejoice — despite significant opposition from a broad coalition of Duke City residents and business owners, construction on the project got underway yesterday.

It was a bitter pill for ART opponents to swallow. But however nasty and personal the dispute has gotten, the saddest thing about the mayor’s transit “vision” is the distraction it’s been from Albuquerque’s core problems. Economic development is a good place to start. In April 2008, there were 398,600 jobs in the city. As of June, there were 385,900. That’s right: No gain, in more than eight years.

Quality-of-life issues are another concern. There’s a lot to like about Albuquerque, but the city has more than its share of violence, property crimes, panhandling, and graffiti. A snazzy new transit system won’t do much, if anything, to improve public safety and livability.

Regardless of where the ART story goes from here, let’s hope that city officials can redirect their energy toward making Albuquerque the growing, dynamic, forward-thinking, and safe place we all want it to be.

For a full exploration of the project’s failings, here’s the Foundation’s ART study from last year. And this op-ed explains why the legal case against ART — far from settled yet — is strong.

Kudos to reporter Bruce Krasnow for covering the latest news about Obamacare’s carnage here in New Mexico.

In 2017, insurers will be asking for big increases for individual plans. Blue Cross’s hike, based on its 2015 rate, will a whopping 93.2 percent. The lowest increase, 15.7 percent is for Christus. (Small-group plans will see hikes of between 31.6 percent and 2.5 percent, with United actually cutting its rate by 3.9 percent.)

Krasnow noted that Presbyterian, like Blue Cross, is dropping out of the state’s exchange, and that’s growing more common: “Vox Media reports that there is just one insurer signed up to sell in 687 U.S. counties in 2017 on the HealthCare.gov marketplace. That’s nearly four times the number of counties that had just one offering in 2016.”

Luckily, no county in New Mexico has fallen to monopoly-provider status — for now. But there’s no question that Obamacare continues to be a disaster for individuals and businesses in the Land of Enchantment. Not all bad policy ideas originate in Santa Fe!

New Mexico’s economic development community is desperate. We get it. With the state mired in high unemployment, facing massive deficits, and few “easy” opportunities for economic growth, the idea of having a marquee company like Facebook place a data center in Los Lunas is very attractive. It certainly makes for some much-needed good press.

Unfortunately, according to a New York Times piece which analyzed these data centers, massive data center projects to rural areas, receiving millions of dollars in tax cuts and rebates but only bringing a few dozen new jobs — and most are not even local hires.

Also on the subject of Facebook’s data center, the Salt Lake Tribune quoted Iowa State University economic development expert Robert Swenson as saying, “You’re not just overbidding, you’re just outrageously overbidding. I don’t know how to say it any other way other than: What’s wrong with you folks?.”

Swenson also is said it’s not uncommon for a company like Facebook to get two cities to fight over each other to get a sweeter deal.

The incentives being offered to Facebook to come to Los Lunas are nothing short of astonishing and (again) call into question the necessity and economic impact of economic development subsidy programs. A Local Economic Development Act (LEDA) grant of up to $10 million is being offered. That’s in addition to a sales-and-use tax rebate worth up to $1.6 million annually along with billions of dollars in industrial revenue bonds which essentially eliminate property tax payments although Facebook has offered to make some direct payments in lieu of taxes of $50,000 to $100,000.

And this doesn’t even include the water being used or the unsteady “renewable” electricity being put on the power grid in exchange for Facebook having steady electricity service from traditional sources.

The fact is that as nice as it would be to have Facebook located in our community, New Mexico policymakers are desperate for good news. That is a dangerous position to be in whenever you’re negotiating.

Last week’s release of the “consensus revenue estimate” by the state’s financial officials included several documents with some very revealing information about where New Mexico finds itself eight months into 2016. Here are some stats worth noting:

* As the above chart indicates, fiscal 2016 revenue for the general fund was down 8.4 percent, and fiscal 2017 is predicted to experience only 0.6 percent growth.

* Weak employment bears much of the blame for poor revenue-creation. Total jobs grew by just 1.2 percent in 2016, with increases in employment in Albuquerque, Santa Fe and Las Cruces offset by “losses in the rest of the state.”

* Since 2006, there has been essentially no job growth in the finance/insurance sector, nor in the retail industry. Construction work is down 20 percent, and manufacturing has dropped by 25 percent. The mining-and-logging sector, which includes oil and gas, “peaked in November and December of 2014 with 29,000 jobs,” but current employment is 18,800, representing the loss “of more than 10,000 mostly high‐wage jobs.”

* Personal income fell by 1.7 percent in fiscal 2016. The average hourly wage rose by just 11 cents.

* According to Moody’s, gross state product declined by 1.1 percent. BBER claims the loss was 0.6 percent.

* Risks to New Mexico’s economy include a national recession and further declines in oil-and-gas prices. A big budget threat is the type of entity that may be hired to run Sandia National Laboratories. If Lockheed loses its contract to a nonprofit organization, “up to a $100 million annual loss in state revenues” could occur.

It’s all pretty frightening stuff. The good news is that there’s no time like the present for elected officials to realize that New Mexico faces an economic and fiscal apocalypse — and finally take concrete steps to build a vibrant, sustainable private sector in the Land of Enchantment.

With massive deficits facing New Mexico, the debate over what spending should be “on the table” or “off” has begun. Democrats say all education spending should be sacrosanct. Several Democratic Senators went so far as to urge higher teacher pay.

As US Census data clearly show, the state spends far more heavily on administration than even the next-highest state:

New Mexico also spends rather heavily on education relative to its neighbors. As seen in the chart below (derived from the same Census data), New Mexico considerably outspends its neighbors on a per-pupil basis.

Performance has not been forthcoming. Perhaps it would be worthwhile for New Mexico legislators and education bureaucrats to consider studying what our neighbors are doing to obtain better results for less money.

It’s the 100th anniversary of the National Park Service, and the media are providing quite a lot of coverage of the celebration.

The NPS has a huge presence in the Land of Enchantment — not surprising, given the number of scenic and cultural wonders here. But while the attractions draw visitors to the state, it’s important to remember that government management has its drawbacks. Exhibit A: The recent disaster over the elevators at Carlsbad Caverns National Park. It’s tough to envision a private-sector entity screwing up to that degree.

Management issues plague the entire NPS. As the Property and Environment Research Center’s Terry Anderson notes in today’s edition of The Wall Street Journal, “a backlog of maintenance projects, including deteriorating roads, buildings and sewage systems … will cost $12 billion to fix. Each year the NPS goes to Congress asking for funding for its operating budgets but almost always gets less than it requests. Between 2005 and 2015, the federal budget grew by 39%, yet the NPS operating budget increased by only 1.7%. Meanwhile, park attendance in 2015 reached a record 305 million visits.”

Anderson recommends that Washington “take parks out of politics and politics out of parks by giving the gift of operating-budget autonomy.” Federal appropriations could then be directed toward the maintenance backlog.

From the Chaco ruins to Fort Union to Glorieta Pass Battlefield to the Gila Cliff Dwellings to White Sands, the NPS controls many of New Mexico’s priceless treasures. But the bureaucracy’s far from perfect, and some simple, but substantial, reforms would improve the system, both here and around the nation.

Several states have embraced reforms including “right to work” in recent years. “Rust belt” stalwarts like Michigan, Indiana, and Wisconsin have adopted such laws to great effect. But, comparisons to New Mexico are difficult. They are industrial powerhouses despite recent problems.

And then there is West Virginia which adopted “right to work” and repealed its prevailing wage law earlier this year. These reforms are also top priorities for conservatives in New Mexico.

And West Virginia is a lot like New Mexico. Just ask the Albuquerque Journal’s Winthrop Quigley. Both states are physically beautiful, culturally and geographically isolated, historically-Democrat-dominated, poorly-educated, and poor.

At the Rio Grande Foundation we believe that incentives matter. We believe that good policies CAN overcome cultural and geographical challenges. It takes time and progress may not be steady, but over time, incentivizing work and removing obstacles to it will result in more work and greater prosperity. The results so far relating to unemployment seem promising.

Since February of this year, West Virginia’s unemployment rate has dropped dramatically from 6.5 to 5.7 percent while New Mexico’s remains stuck at 6.4 percent;

The number of unemployed in West Virginia has dropped 10% while in New Mexico the number has gone up slightly;

The chart below illustrates the unemployment trends in the two states. While  more time needs to elapse, it certainly seems that West Virginia policymakers have begun to move their State’s economy in the right direction.

In Santa Fe, reports the New Mexican, a “City Hall reorganization will create a stand-alone Economic Development Division, removing it from the Housing and Community Development Department.” In addition, the “city is launching a search for a full-fledged economic development director, a job that will pay between $70,387 and $120,640 annually.”

Santa Fe certainly needs an economic-development boost. As the chart above indicates, it has fewer private-sector jobs now that it did eight years ago.

But with Mayor Javier Gonzales touting Santa Fe’s “living wage” and “absolutely booming” film industry, is there any hope of reality-based policies? Let’s hope so. One suggestion, Mr. Mayor: Do something about your city’s whopping 8.3125 percent gross receipts tax.

Here’s something you won’t be hearing from the New Mexico Film Office: Research has, once again, confirmed that giveaways to Hollywood are a sucker’s bet for taxpayers.

Michael Thom, an assistant professor at USC, has published new findings on the “incentives” that states provide to film and television productions. He “looked at job growth, wage growth, states’ share of the motion picture industry and the industry’s output in each state,” and found that on average, “the only benefits were short-term wage gains, mostly to people who already work in the industry. Job growth was almost nonexistent. Market share and industry output didn’t budge.”

Thom’s first study, published in the American Review of Public Administration, concluded that between “1999 to 2013, the average annual percentage change in film production employment remained at or slightly above zero — even in California and New York, the headquarters of the entertainment industry.”

The professor’s second analysis, published in the journal American Politics Research, looked at “why states kept or terminated their incentives.” Dead-enders, he found, refuse to acknowledge reality: “After a state has invested tens of millions of dollars, no politician wants to acknowledge that the program is a waste of taxpayer money.”

Amazingly, despite its small size, New Mexico was one of the biggest-spending subsidizers of Hollywood. At $490.3 million, the Land of Enchantment bestowed more largesse on the industry than Texas, Florida, North Carolina, and Illinois!

Thom’s research is a welcome addition to the mountain of evidence demonstrating the failure of taxpayer “incentivizing” of the entertainment business. Let’s hope it gets some serious attention — from elected officials from both parties — in Santa Fe.

The Foundation has repeatedly exposed the specious reasoning behind the left’s campaign to make tax cuts the culprit for New Mexico’s budget woes. Neither cutting the income tax nor reducing the corporate tax caused the big deficits we face today. This is a spending-driven fiscal crisis, and if the state’s projections on Medicaid expansion are to be believed, there will be red ink for many years to come.

In February, Medicaid-expansion apologist Lee Reynis, a UNM professor, cited data from the Human Services Department in a presentation on the fiscal impacts of Medicaid expansion. In fiscal 2017, which began July 1st, the federal government stopped covering 100 percent of expansion expenditures. Thus, the cost to New Mexico taxpayers will be $44.5 million. And as the chart below indicates, the gaps only increase.

Add it all up, and in the current and next four fiscal years, New Mexico-derived revenue will have to rise by $777.9 million to pay for Medicaid expansion. Again, that’s just the gap for the broadening of the program. It doesn’t include the shortfalls that are likely to result from growing “demand” by those who meet the pre-expansion eligibility criteria. Neither does it address the “woodwork effect,” whereby “people who could have been covered by Medicaid before, but for some reason had not signed up for it, and may not have even been aware they could do so,” join the rolls.

Barring a massive injection of tax revenue — unlikely in the short term, given the state’s moribund economy and misguided growth policies — New Mexico’s books will need to be balanced with smart cuts. The Foundation explored many promising expenditure reductions in a recent paper. Another idea worth examining is rolling back Medicaid expansion. It’s been a fiscal nightmare and has not served as a “stimulus.” Governor Martinez’s worst policy decision is overdue for some serious scrutiny — and probably, a complete reversal.

It is no surprise, given the gaping hole in New Mexico’s budget, that Democrat politicians are blaming Gov. Martinez and especially “tax cuts.” See Alan Webber’s piece in today’s Albuquerque Journal as well as Sen. Cisco McSorley’s piece from New Mexico Political Report.

The current talking point among many on the left is that “the Gov.’s tax cuts” were a failure and they caused the deficit. The bill in question was HB 641 sponsored by Democrat Rep. Moe Maestas which passed in the waning seconds of the 2013 session. It was overwhelmingly supported by House Democrats and opposed by all but one Republican although the Senate vote was bi-partisan.

It was a complicated bill with several components, but it DID reduce the corporate income tax by an estimated $70 million as of FY2017. That said, we were not big fans of the “compromise” at the time and had serious concerns about the politics of “owning” the bill down the road.

Fast forward to this year and I’d say those concerns have been borne out. The myriad shifts and slight tax cuts haven’t done much to improve New Mexico’s economy, but they have become a useful tool for liberal politicians to attack Martinez. Sen. McSorley, for example, voted “yes” on the bill.

Notably, the corporate income tax was estimated to “cost” about $70 million in revenue annually. While that sounds like a lot, it is about 10% of today’s budget deficit. That hardly makes it a driving factor. Should those cuts be re-imposed? Not unless the entire bill, including the local tax hikes, is reconsidered.

If Democrats want to blame Gov. Martinez for decisions that are exacerbating the State’s budget woes, perhaps they should consider the fateful decision to expand Medicaid? Unfortunately, as bad as the budget picture is now, Medicaid expansion will only worsen the budget picture in the years ahead as New Mexico is placed on the hook for more of that program’s cost.

According to the libertarian Cato Institute’s new “Freedom In the 50 States” report which ranks the states by “policies that shape personal and economic freedom,” New Mexico is at the “top of the heap” when it comes to personal freedom. This is a small bit of welcome news for beleaguered New Mexicans who are used to seeing their state at the bottom of most lists.

The report defines personal freedom to include, “gun policy, alcohol policy, marijuana-related policy, travel policy, gaming policy, mala prohibita and miscellaneous civil liberties, education policy, civil asset forfeiture, law enforcement statistics, marriage policy, campaign finance policy, and tobacco policy. That is good news and the Rio Grande Foundation has worked actively and successfully in the area of civil asset forfeiture policy.”

Unfortunately, while New Mexico does a good job on personal freedom, its fiscal and regulatory policies rank 42nd and 38th respectively. That poor showing on “bread and butter” economic issues goes a long way towards explaining the State’s economic and budget woes. Interestingly, it would appear that Americans value economic freedom (fiscal and regulatory) more than personal freedom as neighboring Texas scores a poor 49th in “personal freedom,” but scores well in economic freedom. Notably, Texas is seeing massive population and economic gains while New Mexico is losing population and hemorrhaging red ink.

Click here to go to the index itself and check out the map below:

The various economic policy categories are outlined and defined below:

The fiscal policy dimension consists of categories for state and local tax revenues, government employment, government spending, government debt, and fiscal decentralization. Each of these categories consists of a single variable. The variables are measured for each fiscal year: FY 2010, the latest year for which data are available, encompasses the period between July 1, 2009 and June 30, 2010. Taxation and debt are measured for each fiscal year.

The regulatory policy dimension includes categories for the liability system, real property rights (eminent domain and land-use regulation), health insurance freedom, labor market freedom, occupational freedom, cable and telecom, and miscellaneous regulations that do not fit under another category. Regulations that seem to have a mainly paternalistic justification, such as homeschool and private school regulations, are placed under the personal freedom dimension.

No politician relishes the job facing New Mexico’s leadership in the months ahead. Facing massive budget deficits and the prospect of an election-year special session in an unpredictable and unsettled political season is no elected official’s anyone’s idea of fun.

Like most problems, New Mexico’s budget woes did not sneak up on us overnight. Decades of over-spending combined with tax and regulatory environments that make our State relatively unattractive as a place for doing business caused undue reliance on federal spending and extractive industries like oil and gas.

Economic realities have recently impacted both areas, exposing this.

The current situation could have been avoided with the enactment of pro-growth economic policies, but that didn’t happen. The task now is to balance the budget while minimizing the harm to our future economic prospects. Once the budget is balanced, perhaps the Legislature, especially the Senate, will embrace pro-growth policies.

The good news is that Gov. Martinez has made it clear that she won’t raise taxes. The last thing our businesses and hard-working New Mexicans need is higher taxes. According to the Kaiser Family Foundation in FY 2014 New Mexico spent $7,767 per-person. Among our neighbors, Colorado was the next-highest at $5,853. Texas spent $4,086 or just over half the amount spent by New Mexico. Clearly there is room in the budget to cut.

The other good news is that Rio Grande Foundation has pored over the budget and found enough cuts for policymakers to avoid tax hikes without harming its economic future.

The bad news is that some are already digging in to protect their preferred programs. Senate Democrats have already put education spending – 57 percent of the general fund budget – “off the table.” For their part, several leaders of the business community have urged the preservation of “economic development” spending.

The truth is that closing the budget gap will require compromise. Here are a few of the potential cuts laid out in the new RGF report:

• LEDA: $55 million; LEDA is classic “corporate welfare.” Worse, it is ineffective. Earlier this year, the Legislative Finance Committee (LFC) reported that “the state does not receive sufficient reporting from businesses using … LEDA … funds to properly evaluate” the program. Thus, “it is impossible to determine relative effectiveness and cost-efficiency” of it. Other dubious “corporate welfare” programs could add to the savings.

• Film subsidies: $50 million; There has never been a justification for spending $50 million annually to subsidize Hollywood studios. Massive deficits should mean massive cuts or elimination. Recently, Alaska and Michigan killed their programs while Louisiana downsized dramatically.

• Higher education: $30 million; Student populations are down by more than 8 percent, but the number of branch campuses continues rising. Reducing their number is an easy starting point. Cutting back on taxpayer subsidies for athletic programs (more than $4 million at UNM alone) must be considered as well.

• Personnel: $165 million; a 2014 study by the American Enterprise Institute found a 24 percent advantage for New Mexico government employees when total compensation, including the value of job security, was scrutinized. A 10 percent reduction in the total cost of state-employee compensation is a reasonable goal. This could be achieved by reducing the size of the workforce, by reducing compensation packages, or both.

• K-12: $252 million; at $9,012, New Mexico spends more on K-12 per-student than Utah ($6,555), Arizona, ($7,208), Oklahoma ($7,672), Texas ($8,299), and Colorado ($8,647).

The most promising tactic for immediate savings to is to renegotiate the collective-bargaining agreements that excessively compensate teachers and administrators, especially through an unfair and broken pension system that incentivizes longevity over quality. Expanding school choice is another way to save money and cut costs.

Absent a “miracle” rebound in oil and natural gas prices, New Mexico’s budget faces long-term “structural” deficits. Gimmicks and tax hikes will not solve the problem. We’d all like to see a thriving private sector and voters will decide this November between two very different visions of New Mexico. In the meantime, we need to do some substantial pruning of the budget in order to avoid raising taxes that further make New Mexico uncompetitive with her neighbors.

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

The Pew Research Center’s Stateline is lamenting the fact that 13 states “and many localities continue to tax the sale of groceries, even though the taxes disproportionately hurt the poor and may affect the quality, variety and even the amount of food they can afford to put on the table.”

But New Mexico offers an instructive lesson in the “progressivity” of exempting groceries — i.e., cut or eliminate a levy somewhere, and the foregone revenue will be obtained someplace else.

On January 1, 2005, sales of food at grocery stores were made exempt from the state’s GRT. But to compensate, the tax’s rate was raised on other purchases. And a few years ago, local governments were allowed to impose GRT hikes, to produce revenue that the state would no longer provide.

Such “hold harmless” hikes have been implanted all over New Mexico. Last week, the Silver City Town Council passed a “notice of intent ordinance” to hike its GRT. Mayor Ken Ladner explained that the action was “necessary so that the town can position itself so that it can move quickly to enact the hold harmless gross receipts tax if a special session of the legislature results in the elimination of the planned revenues upon which the town created its budget. If that unfortunate action does occur, the town needs to be able to adopt this ordinance instituting the tax before September 30 of this year in order for it to be effective on January 1, 2017.”

In 2013, Dick Minzner, a former secretary of the New Mexico Taxation and Revenue Department, and Brian McDonald, a former director of UNM’s Bureau of Business and Economic Research, concluded that the effect of the food-tax exemption “has been the opposite of that intended.” Why? By providing “only limited benefit to the poorest … of our households, combined with a tax increase on all other purchases, [it] probably made our tax system more regressive by most measures.”

Give Stateline’s Elaine S. Povich credit for balance. She interviewed the Tax Foundation’s Scott Drenkard, who noted that states “might be looking at getting rid of sales tax on groceries, but groceries are between a sixth and a seventh of all consumption. If you want to raise the same amount of money you might have to increase the [general] sales tax by a full percentage point.”

There are no free lunches in tax policy.

San Juan College High School commenced operations on Monday, with its first class of 80 students.

A partnership between the Aztec, Bloomfield, Central Consolidated and Farmington school districts, SJCHS grads will earn a high school degree and “up to sixty transferable college credits.” Students will have access to campus resources, including the library, computer lab, and tutoring center, and “will have the option to participate in appropriate San Juan College student clubs, activities and organizations.”

Unfortunately, while 80 students “seeking a non-traditional high school experience” are about to start a new adventure, 43 won’t. The Farmington Daily Times reported that demand exceeded available slots, so a lottery had to be held to determine who was picked for enrollment.

Will SJCHS live it up to its promise of equipping graduates “for success in higher education and grow them into contributing members of society”?

Who knows? But that’s the point. School choice, in all its forms, is a recognition that one-size-fits all education doesn’t work. By cracking open an ossified system, and permitting experimentation, options can proliferate — including the opportunity for some high school students to benefit from learning on a college campus.

Best of luck to SJCHS. New Mexico needs more — many more — experiments like it.

Happy National Employee Freedom Week!

A “national effort to inform union employees about the freedoms they have to opt out of union membership and let them make the decision that’s best for them,” National Employee Freedom Week is sponsored by “a coalition of national, state and local organizations dedicated to employee freedom.” The week’s founding organizations are the Nevada Policy Research Institute and Association of American Educators. Many state-level think tanks, including the Rio Grande Foundation, participate.

Employees in “organized” workplaces are often told that they must join the union and pay full dues in order to keep their jobs. It’s not true — several U.S. Supreme Court decisions have recognized the right to decline union membership. In addition, workers covered by collective-bargaining agreements cannot be required to pay more than the portion of their dues that fund legitimate union activities, such as contract administration and grievance adjudication. (In right-to-work states, such “agency fees” are not permitted.)

Here’s a helpful link for New Mexico’s private-sector workers who want the specifics on employee freedom. The National Right to Work Legal Defense Foundation has a guide for state- and local-government workers here.

Additionally, polling on two questions relating to unionism is being released today: For National Employee Freedom Week, 2016, union members were asked two questions about employee freedom. In addition to asking if union members would like to opt out of their union, NEFW also looked at the support for “Workers Choice” reforms, which would allow employees who opt out to negotiate directly with their employer.

Question 1: If it were possible to opt out of membership in a labor union without losing your job or any other penalty, would you do it?

Nationally, respondents said:

Yes: 28.7

No: 71.3

Question 2: If employees opt out of union membership and stop paying dues or fees to the union, should they instead represent themselves in negotiations with their employer?

In New Mexico, respondents said:

Yes: 54.7

No: 45.3

Wendell Cox has released his latest look at which states Americans are moving to — and from. Using IRS data, which offer “probably the best approximation of domestic migration available,” the demographer found that from 2013 to 2014, Texas and Florida were still superstars. Low/no taxes and reasonable regulations continued to attract both residents and investments to the states. Where Big Government rules — e.g., New York, Illinois, New Jersey — populations and economies stagnated, or even withered.

Big states tend to be either big losers or big gainers in migration. So Cox’s most useful metric is the “state attraction ratio,” which divides “out-migration by in-migration (stated in out-migrants per 100 in-migrants).”

Sadly, New Mexico ranked eighth on the list of states people fled. The Land of Enchantment wasn’t as bad as New York or Illinois, but it ranked among consistent laggards such as Rhode Island, Pennsylvania, and Massachusetts. In its region, New Mexico was at rock-bottom. Four of its five neighbors attracted more residents than the drove out. (Surprisingly, Utah’s ratio fell just below 100.)

Great weather. Nice people. Fine food. Fascinating culture/history. A low cost of living. On the surface, at least, New Mexico should be a growth powerhouse. Yet it remains trapped in a seemingly never-ending economic mire. Isn’t it time for some significant policy course-corrections?

Proponents of the mandatory sick leave ordinance are touting the benefits of yet another new local government mandate. The City’s elevated minimum wage is apparently not luring Millennials to town. Now, mandatory sick leave is being put on the ballot for consideration this fall.

The economic issues faced by this City/State are the result of too few jobs. Low wages are the result of plentiful low-skilled labor. Both data and anecdotes bear this out.

New Mexico’s unemployment is 6.2 percent, second-highest in the nation (as of June). Earlier this year, 10,000 people applied for 290 jobs at the Cheesecake Factory (a chain restaurant).  Piling more rules and regulations upon businesses and job creators will result in fewer jobs for young people.

A new study using data from Connecticut backs up that claim. Connecticut adopted mandatory sick leave in 2012. The report by Dr. Thomas Ahn of the University of Kentucky is the first to examine multiple years of Census Bureau data (2012-2014) on the impact of Connecticut’s first-in-the-nation state paid sick leave law.

To isolate the effects of the paid sick leave law, Dr. Ahn compares Connecticut to the five surrounding New England states, and controls for other relevant economic factors that might be responsible for changes in employment.

Dr. Ahn finds that the fraction of employees working at companies with paid sick leave benefits rises from virtually zero at ages 18 to 20 to about 70 percent for workers in their mid-30s and above. He thus expects a new benefit mandate to have the greatest potential for negative impact on younger employees, who are less likely to have the benefit currently.

Among his findings:

Younger employees in Connecticut aged 20-34 saw a 24-hour reduction in annual hours worked. For a part-time employee in the service industry, that’s the equivalent of roughly one lost week of work per year. These employees lost $850 per year in annual income, the equivalent of 3.5 fewer pre-tax paychecks for someone working part-time at the state’s minimum wage.

There are also other consequences to consider: In forthcoming research, Dr. Ahn and his colleague Dr. Aaron Yelowitz find that recent paid sick leave policies in the United States have increased employee absenteeism by 1.2 days per year. Notably, these absences do not tend to occur in times of the most severe influenza outbreaks—suggesting that employees may be using the benefit even when they’re not sick.

There is no doubt that sick leave is a nice benefit to have. However, a one-size-fits-all mandate imposed from the date of hire is the wrong approach. After all, businesses are clearly willing to offer sick leave as a benefit especially as workers gain skills and time in the workforce.

This mandate is not flexible. It will make jobs and job experience further out of reach for young people, especially those in part-time jobs working their way through college. Tracking will be a nightmare as will be the potential legal issues it thrusts upon employers. Ultimately, another mandate is exactly what this community needs if the goal is to push more young people and businesses into Texas and out of New Mexico.

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

There can be no doubt that New Mexico’s construction industry faces some serious public policy challenges. The Associated Builders and Contractors, for example, ranked New Mexico 51st (behind even Washington, DC) on policies affecting the industry. The scorecard included such “bread and butter” RGF ideas like “right to work” and Davis-Bacon “prevailing wage” repeal.

Interestingly enough (albeit unsurprisingly to us), New Mexico suffers from high levels of unemployment in construction per this chart from June 2016. Both charts and additional commentary can be found here.

To be fair, Alabama has a higher rate in June, but this is a snapshot, the real kicker comes in the subsequent chart in which we find that New Mexico’s second-highest unemployment rate of June 2016 represents a VAST improvement over the same time last year:

In addition to “right to work” and “prevailing wage” there are permitting, land-use, and a whole host of other factors that make construction more difficult in New Mexico than it has to be. It would be nice if policymakers focused on ways to address the issue.