Ouch. Last week Keith Cowing, proprietor of NASA Watch, tweeted that “the only actual business operating” at Spaceport America “is the gift shop.”

Harsh, but true. Meanwhile, just over the border in Texas, Blue Origin has conducted the fourth test flight of its New Shepard vehicle. The company, owned by Amazon billionaire Jeff Bezos, has a launch facility in Van Horn.

Also in Texas, the Midland International Air & Space Port got some bad news when XCOR Aerospace recently announced some layoffs. But the facility’s future still looks bright, with the Midland Development Corporation talking to several “large players” with “big, strong balance sheets” about coming to the facility.

Finally, SpaceX’s Texas spaceport at Boca Chica Beach is under construction. In April, The Brownsville Herald reported that Elon Musk’s company expects “to be ready for its first launch from the site in 2018.”

Isn’t it time to for New Mexico’s “leaders” to admit defeat, and unload Spaceport America?

Vermont, a liberal state not necessarily know for policy innovation (at least not in a free market direction) has become the latest state to embrace the concept of dental therapy. The Governor, Peter Shumlin, signed a bill today that paves the way for dental therapists to practice in the State.

As Rio Grande Foundation research director Dowd Muska noted in an opinion piece earlier this year,

Over 63 percent of New Mexicans live in areas where there are shortages of dental-health personnel. Allowing these professionals to carry out some activities that have previously been only available under the direct care of dentists would improve accessibility in rural and underserved communities. It can also create new business opportunities for entrepreneurial dentists.

Healthier teeth, employment and entrepreneurship opportunities in rural communities at no cost to the taxpayer, who could argue with that? Folks in Vermont didn’t. It would be nice if New Mexico’s elected officials took a cue — just this once — from their counterparts in the Green Mountain State.

In six months, New Mexico’s hideously complicated tax code will get just a little bit simpler.

As the Santa Fe New Mexican reported earlier this week, the state’s solar tax credit, which “pays as much as 10 percent (up to $9,000) for solar photovoltaic or solar thermal systems,” expires at the end of 2016.

Not surprisingly, subsidy-seekers are signing up a rapid clip, in advance of the credit’s impending sunset. And “greens” are whining that the disappearance of the perk will spell doom for the solar “industry” in the Land of Enchantment.

Time will tell. But one thing we know for sure. In New Mexico, the fourth-sunniest state, solar has been a bit of a bust. Despite massive subsidization at the federal and state levels, and more sunshine than 45 other states, the Land of Enchantment is no solar star. The chart below, of “distributed solar PV installed capacity,” shows where we stand.

Source: U.S. Energy Information Administration

Cloudy, misty, foggy, rainy, and snowy, Maryland, New Jersey, Pennsylvania, Connecticut, New York, and Massachusetts make the top ten list. But not New Mexico.

For fans of Econ 101, this is good news. Crony capitalism considerations aside, as legislators James Strickler, James Townsend, and Larry Scott wrote in an Albuquerque Journal op-ed last year, “nightfall, the low efficiency of the panels when the sun is low on the horizon and occasional rainy days” make the (unsubsidized) “cost of a rooftop solar system installation … approximately seven times the cost per kilowatt of the most efficient power generating technology.”

The end of New Mexico’s tax perk for solar is a good thing. Now let’s get to work on the other giveaways that infest state’s tax code.

With New Mexico’s primary season behind us, attention turns to the general election this November. All legislative seats are up and Democrats believe they can regain the House while Republicans are hoping they can make inroads in or even take control of the Senate.

Forum particulars are as follows. The event will be held on Tuesday, June 21 from 7:00 P.M. to 8:30 PM at the UNM Continuing Education Building which is located at 1634 University Blvd — 1 block north of Indian School — in Albuquerque. The event is free and open to the public.

Participating confirmed candidates for State Senator Eric Burton (R) as well as Diego Espinoza (R) and John Sapien (D) who are facing off in Senate District 9. Other candidates have been invited, confirmation pending.

Hosted by the Albuquerque Tea Party, the forum will be formatted to give each candidate opportunity for an opening and closing statement and adequate time to answer a series of questions.  At present, the format includes some time reserved for a few questions from the audience.

After examining Commerce Department data, The Wall Street Journal found that economic growth “slowed in more than half of the states in the U.S. last year.” “[F]alling farm incomes, which were hit by tumbling crop prices” played a role, as did a “big slowdown for the oil and coal industries.”

You know where this is headed. Not only was New Mexico one of the 28 states with slumping GDP growth, it was the worst performer in our region. Utah’s growth accelerated, while oil-and-gas-dependent Texas held fast at 2014’s 3.8 percent. Colorado slightly declined, Arizona’s rate was cut in half, and Oklahoma fell by 61 percent. Our dip was a depressing 73 percent — from 2.6 percent to 0.7 percent:

Looking at the whole country, the Land of Enchantment ranked fifth from the bottom. North Dakota’s contraction made ours look tame. The drop in oil prices sent the Peace Garden State’s GDP growth plunging by 135 percent, meaning its economy actually shrank. (Only one other state, Alaska, did the same. But its economy shrank so badly in 2014 that 2015 looked good by comparison.) Vermont was next (87 percent growth decline), followed by Kansas (83 percent) and West Virginia (86 percent).

A group of “experts,” the Albuquerque Journal recently reported, will soon release recommendations to revamp economic development in New Mexico, “after which leaders will decide which ones to pursue, whether through the Legislature or other levels of government, or in the private sector.” Change can’t come soon enough.

As if to prove that the Albuquerque Journal will run anyone’s opinion article no matter how crazy, Nick Estes (a left-wing liberal who I’ve debated in the past) has a column in today’s paper touting the alleged benefits of “helicopter money.” Helicopter money is a term for government printing money and proceeding to spread it around the economy by dropping it out of helicopters.

Estes justifies the idea claiming that the great libertarian economist Milton Friedman recommended it “half-jokingly.” I am not sure where Estes gets that. Friedman routinely decried the dangers and pernicious impacts of inflation (government printing of money). As Estes notes in his column, the government would indeed have to print more money in order to drop it out of his helicopters. Here is just one of Friedman’s many lectures on inflation.

But one doesn’t need to rely on Friedman to debunk the idea that printing money will improve our economy. Is Estes familiar with Zimbabwe(see picture below)  How about Venezuela where inflation is running at 500%?

Friedman had another famous quote, “There’s no such thing as a free lunch.” In other words, you can’t build prosperity without increasing output, improving economic efficiency and doing more of the things that actually build wealth. Unfortunately, Estes is by no means alone in supporting government spending as a means of economic growth. It is an affliction of both the left and right nowadays.

If we want to build wealth — in the US, Venezuela, or right here in New Mexico — we need to reduce tax and regulatory burdens (including minimum wages and other government mandates) to get people back to work. We need fair and consistently-applied legal policies (free of corruption) and low, reasonable taxes, especially on productive economic behavior.

Last year, New Mexico became a national leader in controlling abuses of civil-asset forfeiture. Let’s keep our momentum against overcriminalization going — and adopt a default mens rea standard.

Under the common law, a crime takes place when a mens rea (guilty mind) commits an actus reus (guilty act). As described by one legal scholar, “Historically, our substantive criminal law is based upon a theory of punishing the vicious will. It postulates a free agent confronted with a choice between doing right and doing wrong and choosing freely to do wrong.”

University of New Mexico School of Law Professor Leo M. Romero put it more succinctly when he wrote that “moral blameworthiness is a deeply rooted precondition to the imposition of penal sanctions.”

But as government grew and the regulatory state expanded, the nature of crime changed. Actions understood to be inherently wrong, such as theft and murder, began to be outnumbered by offenses said to be committed against “public welfare.”

Reformers at the state level have come to embrace a default mens rea provision as a tool to protect citizens from inappropriate prosecution. In 2014, Ohio’s legislature passed, and Governor John Kasich signed, a bill that made a significant clarification: “When the section language defining an element of an offense that is related to knowledge or intent or to which mens rea could fairly be applied neither specifies culpability nor plainly indicates a purpose to impose strict liability, recklessness is sufficient culpability to commit the offense the element of the offense is established only if a person acts recklessly.”

More recently, Michigan’s legislators and governed enacted a similar reform, which enjoyed support from the National Federation of Independent Business, the U.S. Justice Action Network, the ACLU of Michigan, the Criminal Defense Association of Michigan, and the Mackinac Center, a free-market think tank.

The need here is real. New Mexico has one of the worst violent-crime rates in the nation. In the state’s largest metro region, the Albuquerque Journal has reported, a “cadre of hard-core violent criminals has become a common theme,” with “brazen armed robberies to carjackings to the cold-blooded shooting of police officers.” It’s clear, particularly in an era of constrained budgets, that New Mexico needs to make the best use of its law-enforcement resources. A default mens rea law, similar to the ones passed in Ohio and Michigan, is one tool to foster such prioritization.

In 2013, the state’s high court took a small step toward mens rea reform, when it ruled that violators of restraining orders must act “knowingly” in order to be charged. (Thus, an unintentional encounter in a public place could not be prosecuted.) But many opportunities remain for “crimes” to occur absent criminal intent in New Mexico.

For example, it is illegal to hunt and fish in the state, except “as permitted by regulations adopted by the state game commission or as otherwise allowed by law.” The New Mexico Department of Game and Fish’s rule book for fishing is 52 pages long. The rule book for hunting upland and big game is 144 pages long.

In addition, under state law, the Board of Regents of New Mexico State University establishes regulations for fuelwood. In 2014, the board decreed that it must be “advertised, offered for sale, and sold only by the cord or fractional part of a cord, except it may be sold by weight if the seller declares the price per unit of weight and the equivalent price per cord.” Thus, sales of fuelwood in “unspecified quantities, such as ‘load’ or a ‘truck load,” which commonly occur throughout New Mexico, are prohibited.

New Mexico needs a default mens rea standard, in order to codify what one scholar called “the classic liberal idea that moral culpability is, and criminal liability should be, based on a conscious choice to do wrong.” In addition to protecting its citizenry from unwarranted prosecution of ignorance and/or mistakes, the reform would offer clarity — and promote efficiency — in New Mexico law enforcement.

D. Dowd Muska is research director of New Mexico’s Rio Grande Foundation, an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom, and individual responsibility

Heard of the “Family-Friendly Workplace Task Force”? If not, don’t blame yourself. The entity, created by a House Memorial in 2015, is a bit of a phantom. The Foundation had forgotten all about it until we spotted a very odd, no-byline article in the Clovis News Journal a few days ago. Apparently, the task force held a meeting at the North Annex of the Clovis-Carver Public Library — the first in “a 10-city tour around the state to gauge the interest and ability for a statewide paid leave policy.”

The memorial that created the Family-Friendly Workplace Task Force charged it with crafting recommendations for “the establishment of a parental paid-leave program to provide paid leave to parents for childbirth and to care for newborn or newly adopted children or for newly acquired foster children” and naming “a state agency to manage the parental paid-leave program and the parenting workers’ leave fund.”

The executive director of the far-left Southwest Women’s Law Center was “requested to serve as chair of the parental paid-leave working group,” and the establishment-left Bureau of Business and Economic Research, housed at UNM, was to “convene” the group.

But dig around on the web for anything regarding the Family-Friendly Workplace Task Force, and you’ll find zilch. The BBER doesn’t offer any information on its website. (We’ve contacted them to inquire further.) Neither does the Southwest Women’s Law Center’s online presence. News coverage, except for the Clovis News Journal article, has been nonexistent.

So what’s going on? Don’t citizens, taxpayers, and businesses deserve to know what the Family-Friendly Workplace Task Force has been up to? And where is the list of the nine cities remaining in the group’s statewide tour?

The deadline for the task force’s “findings and recommendations” is October 1st — just three and a half months from now. The Foundation will stay on the case, and report what we find.

The state’s Department of Cultural Affairs (DCA) is planning to “cut its operating budget by eliminating the jobs of six of the seven managers who oversee historic sites across New Mexico.” In addition, admission fees are slated to rise, and “the number of days some of its sites are open” will be reduced.

The department’s budget for the impending fiscal year has been clipped by $2 million, and not surprisingly, the downsizing has elicited plenty of apocalyptic reactions. (The Fort Stanton site manager called it “a terrible, inequitable solution.”) But DCA’s smart bureaucrats will see less funding as a way to get their house in order, and address longstanding problems.

According to the Legislative Finance Committee, the department faces “key, ongoing challenges for its Museums and Historic Sites Program, which makes up 59 percent of the agency’s budget. The first is maintaining facilities, many of which have significant deferred maintenance issues, creating safety hazards and exposing art and historical structures of significant cultural value to risk of damage or destruction.” In addition, many exhibits “are left in place for years without updates, reducing interest in repeat visits. For example, the Museum of Indian Arts and Culture … has two key exhibits that have received essentially no updates in the nearly 20 years since their installation. Similarly, Fort Sumner was built with plans to have an exhibition wing, but it took years to build a permanent exhibit space, and that space remains empty.”

Worst of all, perhaps, is legislative auditors finding that DCA “owns 191 buildings across the state … and has no facility master plan or structured method to prioritize funding.”

So the department’s got issues, bigtime. A thorough right-sizing — one that includes unloading low-priority properties — would appear to be in order. One promising approach is a greatly expanded role for the Museum of New Mexico Foundation, which “provided $3.2 million in financial assistance in FY14 and $3 million in FY15.”

“U.S. crude,” The Wall Street Journal reports, “closed above $50 a barrel for a second day in a row on Wednesday and is up around 95% from its decade-lows reached earlier this year.”

Daniel Yergin, vice chairman of consulting firm IHS, recently told the Journal that the “big news in demand is growth in India, which now rivals China. India really is seen as the growth market for oil.”

BP’s annual energy outlook is predicting a global petroleum-demand increase of 20 million barrels per day by 2035, driven by “use in Asia for both transport and industry.”

It’s all good news for New Mexico, which ranks sixth among the states in oil production. Drilling in the Land of Enchantment hit bottom in 2007, but the fracking revolution has helped to more than double output since then.

Low prices during the last year and a half have induced layoffs, as well as a slight production decline that started in May 2015. But for the moment, the future looks bright. Prices have recovered. (Maybe they’ll even rise further.) The ban on oil exports has been lifted. And the oil industry has yet to tap the massive Mancos play in the northwestern part of the state.

With petroleum providing so much direct and indirect employment in New Mexico, as well as contributing about a third of the tax revenue generated here, it’s more important than ever to fight the eco-left’s anti-fracking hysteria and “keep it in the ground” nonsense. Sorry, “greens,” but oil is a huge part of our economy, and the latest indications are that it will be for a long, long time to come.

How is New Mexico’s economy doing? We at the Rio Grande Foundation use and report on this information often because these reports provide a good deal of information on how New Mexico is faring relative to other states. Since the Legislature makes the laws, it is their responsibility to enact policies that create the conditions

You may have seen media reports of a recent report by WalletHub (which was picked up by several media outlets) stating that New Mexico has the 5th-worst economy in the nation. This is in-line with many other reports which place New Mexico’s economic performance towards the bottom among US states (as seen on the map below), so it does have credibility.

But in looking through the report, I realized that it used some questionable variables to come to its conclusions. For example, median household income sounds like a great statistic, but high income areas are often very high cost areas. In fact, people in “poorer” states often have more disposable income after taxes and basic expenses than those in “rich” states.

The study also focuses on high tech jobs with several of its variables. There’s no doubt that tech is “cool” with a lot of well-paid workers, but it is hard to understand why three separate variables (% jobs in tech, patents, and venture capital, much of which is tech-related, albeit by no means all) should, be factored into a report measuring the overall economic health of a state. After all, there are other important industries with lots of good-paying jobs. Does it matter if those jobs are in the high-tech field or not?

While the overall rankings are questionable, California’s 3rd-place ranking alone is reason enough to question the report. This is the same State, after all, that is seeing high levels of domestic out-migration as seen below and the highest rate of real poverty among US states. Placing California 3rd-best in overall economic health just doesn’t make sense.

Contrary to Winthrop Quigley’s obvious frustration over New Mexico’s poor performance on these economic rankings, they can be extremely useful for policymakers and the public in understanding where changes and improvements must be made. Unfortunately, this Wallethub report leaves much to be desired in that regard.

The business owners suffering from the Albuquerque Bernalillo County Water Utility Authority’s movement of water pipes along Central Avenue, in preparation for “Albuquerque Rapid Transit,” probably don’t read The Boston Globe.

Lucky them.

A few weeks ago, Larry Summers, president emeritus of Harvard University, penned an op-ed with MBA-MPP student Rachel Lipson. They described the sorry saga of the Anderson Memorial Bridge, which links Boston to Harvard Square: “Rehabilitation of the 232-foot bridge began in 2012, at an estimated cost of about $20 million; four years later, there is no end date in sight and the cost of the project is mushrooming, to $26.5 million at last count.”

“Infrastructure!” is the rallying cry for left-leaning scholars and activists who claim to understand the best ingredients for economic development. Reliably ignored, in their advocacy for bridges, tunnels, parks, bike paths, “mass transit,” and “affordable housing,” is the ugly reality that government at all levels increasingly demonstrates a woeful inability to complete projects on time and on budget.

Summers and Lipson lament “bureaucratic ineptitude and the promiscuous distribution of the power to hold things up” and “the failure of leadership to insist on reasonable accountability to meet reasonable deadlines.” More and more voices are joining the chorus of critics. Harry W. Jones, of NASA’s Ames Research Center, has decried project-planning that reflects “optimism and hope for success in a supposedly unique new effort rather than rational expectations based on historical data.” For an eye-opening exploration of this problem, listen to economist Russ Roberts’s interview with Oxford University’s Bent Flyvbjerg.

Moving water pipes is just one task on the construction to-do list for ART. (As KRQE noted last month, the revenue “the Water Authority is spending on relocating water lines for the bus lanes and stations and now rebuilding medians [is] separate from the $119 million the ART project will cost.”) As the city presses ahead with the project — despite massive public opposition and two lawsuits — look for expenditures to increase and deadlines to lapse.

The Sooner State is wrestling with the same downturn in the oil patch that plagues New Mexico. But despite a strong attempt to close its massive deficit for fiscal year 2017 with big tax hikes, legislators have reached a deal that cuts spending and does not hike the state’s major revenue-raising mechanisms.

As summarized by the Tax Foundation, the fiscal compromise eliminates the refunability of the earned income tax credit, ends a “double deduction” to the state income tax, caps the total credit available for low-producing oil wells, and puts a cap on the “Investment and New Jobs Tax Credit.”

Jonathan Small, the president of the Oklahoma Council of Public Affairs, is pleased that the deal “cuts one area that, while important, is also rife with waste and abuse — higher education. Many legislators deserve credit for forcing administrators (some are former politicians) at state colleges and universities to tighten their belts and refocus on the critical core mission of educating students. Hopefully, future legislators and governors will take the same attentive eye to the rest of Oklahoma government.”

The start of fiscal 2017 is less than a month away, and it’s quite clear that there won’t be enough revenue to cover the spending plan New Mexico legislators adopted earlier this year. A special session charged with closing the deficit is all but certain. Let’s hope that Santa Fe makes the right call, and focuses on expenditure control, not tax hikes. New Mexico’s economy has not yet clawed its way back from the Great Recession, and some are warning that another national downturn is likely. The Land of Enchantment’s workers, families, and taxpayers are in no position to bear the burden of “revenue enhancement.”

On this Saturday’s episode of Tipping Point New Mexico, Dowd Muska and Paul Gessing interviewed Greg LeRoy of Good Jobs First on a variety of issues relating to developing New Mexico’s struggling economy. This interview represents the very best of left/right agreement in opposing government policies that pick and choose some special interests and industries over others.

While there are disagreements between left and right over what ideal economic policies look like and what exactly a “subsidy” is as opposed to a targeted tax break, but overall Good Jobs First is a trove of useful information. For example, you can see here which companies have received the most subsidies.  The report lists Intel as the top recipient — a conclusion we might disagree with based on differences on tax exemptions as opposed to direct subsidies (like payouts to the film industry).

Nonetheless, three of New Mexico’s top subsidy recipients are in the film industry (Lions Gate, Sony, and Comcast). Interestingly, Eclipse Aviation and Schott Solar are on the list and have both gone out of business. Lastly, Forest City Enterprises is number two on the list because it developed Mesa del Sol and received massive TIDD subsidies. This is an ongoing issue as Santolina has asked for massive TIDD subsidies from the Bernalillo County Commission as well.

Anyway, the interview is fun and informational. It’s just the sort of principled, non-partisan work we are proud of at RGF.

You can check out the hour-long interview below:

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 May, of 11,357 projected jobs, 9,719 — 85.6 percent — were slated for right-to-work (RTW) states:

As is usually the case, no projects are to be located in New Mexico.

Nineteen domestic companies based in non-RTW states announced investments in RTW states. Just one announcement went the other way.

RTW prevailed in foreign direct investment, too. Six projects are headed to RTW states, with one to occur in non-RTW states.

New Mexico’s RTW neighbors to the east and west landed marquee investments. Caterpillar picked Arizona for its “new surface mining and technology operations,” which will create “more than 600 projected … jobs over five years, with employees in executive management, engineering, product development and support positions.” Italy-based SATA, “a high-tech components manufacturer,” selected Texas for a $114 million, 300-job “machining operation.” The Lone Star State also saw Hong Kong-based Lollicup commence operations at a 200-employee plant for “foodservice packaging products and … beverage ingredients.”

Outside of the Southwest, UTC Aerospace Systems — which is ending its Albuquerque presence — added 260 workers to its facility in Foley, Alabama. And Sparta Industries is slated to created 1,000 jobs in Georgia, to manufacture “foam insulation for use in the commercial building industry.”

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.

* Intrastate relocations were not counted, interstate relocations were.

It’s no secret that New Mexico’s Sen. Tom Udall is among the most favored elected officials of professional environmental groups.  It was, however,  somewhat surprising (and gratifying) to see him in a recent presentation in Albuquerque not support a national ban on “fracking” saying it “should remain on the state level.” In the same presentation he stated that New York’s “fracking” ban “is not based on reality.”

This is good news and it flies in the face of opposition to “fracking” by Bernie Sanders and Clinton’s nuanced position on the issue. There is also a long list of national and New Mexico environmental organizations that would like to ban fracking. Of course, New Mexico is a major oil and gas producing state and banning fracking would destroy our economy and Udall has to know that, but it is good to see him embrace reality on the issue by recognizing that it should be a state, not federal, issue.

Udall also noted the obvious fact that “New Mexico doesn’t have a strong enough private sector.” This is news to no one, but Udall’s sad “solution” isn’t “right to work” which he opposes, it is more “tech transfer” from the Labs and more infrastructure spending. He also supports increasing the job-killing minimum wage. As I stated in response to Rep. Lujan-Grisham’s similar point, tech transfer from the Labs has been tried before. Obama’s “stimulus” was also supposed to improve infrastructure with little success.

In 1999, New Mexico enacted a law that allowed receipts “from selling uranium hexafluoride and from providing the service of enriching uranium” to be deducted from the gross-receipts tax.

Was the perk a wise “public investment” in “economic development”? The truth is, we don’t know. Counterfactuals are tough. Perhaps URENCO, the European uranium-enrichment company that benefited from the break, would have come to New Mexico without it — site-selection decisions are complicated. But in 2016, whatever its past “benefits,” the deduction is looking iffier and iffier.

Case in point: Exelon. On Thursday, the utility announced plans to close two of its nuclear plants. According to the Chicago Tribune, the “company, the parent of … utilities provider ComEd, said the Clinton Power Station would close June 1, 2017, and the Quad Cities Generating Station in Cordova would close June 1, 2018. The plants have lost a combined $800 million in the past seven years.”

Love them or hate them, nuclear plants are closing in the U.S. And the much-touted renaissance of domestic atomic power, predicted by many a decade ago, is fizzling. In URENCO’s 2015 annual report, the company disclosed that in North America, “historically low prices of fuel used for electricity generation, for example natural gas, combined with a decline or minimal growth in electricity demand continue to challenge the economics of both existing and proposed nuclear power projects.”

Enrichment customers can be found all over the world, of course, but for how much longer? Europe is denuclearizing. Sweden is speeding up the closing of its two reactors, from 2020 to 2018. Germany is planning to be fission-free by 2022. The developing world offers an opportunity, but China is ramping up its own enrichment capabilities, and globally, URENCO faces fierce competition from Russia.

In 1999, were the elected officials who approved URENCO’s GRT deduction “visionary”? It’s getting tougher and tougher to believe so. The freebie is another example of legislators and governors lacking the ability to predict which businesses and industries pose the greatest opportunities to build a vibrant private sector here.

New Mexico doesn’t need economic-development trickery. (And the kinda-sorta corruption that comes with it.) It needs to focus on the basics — low and simple taxes, reasonable regulations, appropriate infrastructure, meaningful school reforms — to turn around a state in dire need of job and wage growth.

The left-leaning Brookings Institution’s new paper “One Third of a Nation: Strategies for Helping Working Families” will be tough reading for many in the welfare-industrial complex.

Authors Isabel V. Sawhill, Edward Rodrigue , and Nathan Joo examined “the poorest one-third of all families in the U.S. with an able-bodied head between the ages of 25 and 54.” The households “are disproportionately minority, poorly educated, and headed by single parents.”

What explains the condition of the people in the bottom third? The Brookings scholars call it the “work gap” — the reality that “many are not employed at all, or work limited hours.”

The “biggest impact on the economic well-being of these households is achieved by simply assuming that they work full time.” Low-income families would enjoy “large earnings gains …. if more jobs were available and … household heads were willing and able to work full time at their existing or predicted wage.”

In New Mexico, the employment-to-population ratio, “which measures the share of people in their prime working years who have jobs,” plummeted between 2007 and 2015. It fell from 79.1 percent to 71.9 — far and away the largest drop in the nation. (Only Kentucky and West Virginia posted a lower overall share.)

What New Mexico needs, more than anything, is more and better jobs. Anyone interested in implementing policies sure to generate sustainable, vibrant economic development?

The cutting’s about to begin.

The Albuquerque Journal reports that the Department of Health and Department of Cultural Affairs “will be among the agencies hit hardest by budget cuts that take effect next month.”

“If we had our choice, we would not be doing this,” harrumphed a Department of Health spokesman, whining about cutting 6 percent in contract costs, due to “the loss of about $12.5 million in state funding in the coming year, from $304.4 million to $292.9 million.”

The Department of Cultural Affairs is planning to lay off 11 employees, and will “leave vacant staff positions open, freeze noncritical contracts and trim the schedules of at least some museums and historic sites.”

But bureaucrats’ grumbling aside, it’s worth noting that New Mexico is, unquestionably, the biggest-spending state in the Southwest. Here’s a graph of per capita spending, in 2013, for the region’s six states:

The expenditure data are from the U.S. Census Bureau’s Annual Survey of State Government Finances. They include every penny the states spent — on schools, highways, prisons, Medicaid, food stamps, subsidized housing, corporate welfare, debt service, quasi-government entities, etc. (Beware New Mexico’s “general fund” figure, which excludes many categories of spending, as well as the revenues received from the federal treasury.)

With the Land of Enchantment’s economy stuck in neutral, and the future of oil-and-gas production anyone’s guess, it’s all but certain that more austerity lies ahead. The Foundation looks forward to weighing in on what additional cuts need to be made to the fiscal 2017 budget.

The Pew Center does a great deal of solid work to educate the public on various state economic issues. The two images below detail New Mexico’s unfunded retirement costs as of 2013. As the first chart shows, New Mexico’s unfunded burden is the 6th-heaviest in the nation among US states. No neighboring state comes close to having New Mexico’s burden levels which further makes us uncompetitive with our neighbors.

As the following chart shows, New Mexico’s unfunded pension costs rose quite quickly as a share of personal income in the wake of the financial downturn of 2008. It went down slightly between 2012 and 2013, but more needs to be done to make our pension system sustainable (the best and most sustainable option is to move to a defined contribution 401-K style system as opposed to the current defined-benefit system which puts workers’ retirement in the hands of government officials and puts taxpayers on the hook for future benefits.  The full Pew report and charts can be found here.

The news is bad, and it just keeps getting worse.

According to the University of Virginia’s Demographics Research Group, New Mexico is slated to lose 6.3 percent of its working-age population between 2010 and 2040.

That’s pretty awful, but the picture looks horrific when one examines our neighbors. In Texas, the working-age population is predicted to grow by 50.7 percent. Colorado (47.0 percent), Utah (41.6 percent), Arizona (33.0 percent), and Oklahoma (16.3 percent) are estimated to grow, too. Pew Center has an article on the issue here.

Fabulous weather, friendly people, low costs, and rich history/culture/cuisine. Yet our present is shaky, and our future is downright terrifying. Something is very, very wrong with the Land of Enchantment. Unless policy changes are made, rapidly, its fate will mirror the deeply distressed states of the Northeast — not our dynamic, vibrant, and pro-growth neighbors.

Kudos to Albuquerque Business First for listing “10 of the most unusual exemptions” to the state’s gross receipts tax (GRT). Fuel for small planes, website hosting, commission for travel agents — it’s curious, what economic activities legislators choose to award with special treatment.

But the Foundation has its own list of bizarre GRT perks. We’d add a few to ABF’s list. Deductions are applied to receipts from:

* professional boxing, wrestling, and martial arts contests

* leases on manufactured homes (but only for durations of longer than one month)

* research, development, testing, and evaluation services for the U.S. Air Force’s troubled Operationally Responsive Space Program

* sales by “a qualified contractor” of “directed energy and satellite-related inputs”

* the sale and installation of solar-energy systems (of course)

* the sale of uranium hexafluoride from enriching uranium

The GRT is a messy monstrosity, and it needs serious simplification — and reduction. But as long as legislators and governors seek votes for their support for “creating jobs,” the GRT code will remain riddled with exemptions and deductions of dubious justification.

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// ]]>The following article by RGF president Paul Gessing was written in response to an article that appeared a few days ago (linked below) which attacked former New Mexico Gov. Gary Johnson’s fiscal record in New Mexico. As the free market think tank working in New Mexico, we at the Rio Grande Foundation felt it was worth clearing the air and explaining the pluses (and minuses) of Gary’s time as New Mexico’s top executive.

//

James Spiller recently wrote a scathing article in which he argues that the record of former New Mexico governor and current Libertarian candidate for president Gary Johnson is “not conservative and not even all that libertarian.”

As the head of New Mexico’s free-market think tank (although I was in Washington, not New Mexico, during the Johnson administration,) I’d like to offer my own thoughts on Johnson’s tenure. I’d also like to refute some of what Mr. Spiller has to say in his critique.

Spiller starts by attacking Johnson’s fiscal record, claiming that he is a “big spender” compared with successors Richardson (a Democrat) and Martinez (a Republican). One problem is that Spiller “credits” Johnson with spending money he had little control over. His spending numbers include federal dollars that flow into the state for everything from Medicaid to education. Including just the General Fund that the legislature and governor must agree to each year, Johnson’s first budget was $2.7 billion and his final budget, eight years later, was $3.9 billion (an increase of about 41 percent).

 

Thus, under Johnson, New Mexico’s General Fund spending grew by 4.67 percent annually, not the outrageous 7.29 percent rate cited by Spiller. Once you factor in inflation and New Mexico being a relatively fast-growing Western state (population growth in the Land of Enchantment has stagnated since the late 2000’s economic crisis), Johnson’s spending record looks much better.

As a self-identifying libertarian, I still find that growth too fast, but there is no doubt that Governor Johnson has more fully embraced his Libertarian viewpoint since leaving office in 2003.

Of course, annual budget growth is only part of any governor’s fiscal record. Spiller accurately notes that Bill Richardson, a Democrat who immediately followed Johnson, grew government at a slower rate during his eight years in office. Make no mistake about it, Richardson was no fiscal conservative. During Richardson’s first six years in office, General Fund spending grew by more than 6.5 percent annually.

But, Richardson’s big-spending dreams were dashed by the 2008 economic crisis which saw state spending decline by an average of 8.51 percent over two years. The money simply wasn’t there. Worse, Richardson foisted two massive boondoggles upon New Mexico taxpayers: a $225 million spaceport built for Virgin Galactic that sits largely unused in the desert and a commuter train that sucks $50 million annually out of taxpayers’ wallets.

To his credit, Johnson didn’t foist any costly boondoggles upon his successor or future taxpayers. In fact, New Mexico’s budget was sufficiently strong that Richardson was able to enact major pro-growth tax cuts immediately upon taking office. Johnson too pushed tax cuts while in office, but Richardson was able to follow through, taking the state’s top income-tax rate from 8.2 to 4.9 percent.

Richardson succeeded where Johnson failed in cutting taxes in large part because during Johnson’s tenure the New Mexico legislature was controlled entirely by Democrats. These were no razor-thin margins either: Democrats held approximately 60 percent of all legislative seats.

With so many Democrats in the legislature, Johnson’s main impact was in vetoing an astonishing 739 bills over his eight years in office.

Nonetheless, Johnson’s agenda was stymied in other ways by the partisan makeup of his state’s legislature. Every year Johnson proposed school-choice vouchers and every year the Democrats in the legislature killed them.

Though he struggled to achieve major free-market reforms during his tenure, Johnson did get the legislature to approve the use of private companies to build and run new prisons. These prisons ran at a much lower cost than the government-run prisons even when amortizing the initial construction costs. This helped to end prison overcrowding in New Mexico.

One point that Spiller is correct on is New Mexico’s film-subsidy program. The Rio Grande Foundation has consistently opposed this subsidy which Richardson expanded from 15 to 25 percent. For every $1,000 a Hollywood film spends in New Mexico they get a $250 check from New Mexico taxpayers. In 2012 Representative Justin Amash of Michigan rightly challenged Johnson on this supposed “success” on social media calling film subsidies “central planning and cronyism.”

Is Gary Johnson’s spending record perfect? No, but perfect is not on the ballot this year. He’s running as a fiscal conservative against two candidates who eagerly support bigger government across the board. In most any presidential election you could do much worse than New Mexico’s former Governor. That is especially so this year.

— 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.

Kudos to New Mexico Attorney General Hector Balderas for suing the Environmental Protection Agency in the wake of the Gold King mining spill.  This disaster was clearly caused by the EPA and its incompetence.

Unfortunately, on another issue, the “Clean Power Plan,” Balderas has turned against New Mexicans’ best interests. The following map from America’s Energy Alliance (you can go there and find an interactive version of the map) shows which states are going along with Obama’s unconstitutional power-grab to regulate utilities (which should be regulated by the individual states). As is usually the case, New Mexico has aligned itself more closely with California and other leftist-dominated coastal cities than its more economically-free and fast-growing neighbors.

According to calculations from America’s Energy Alliance, New Mexicans will see wholesale rates rise by 10% and retail rates go up by 14% if the Clean Power Plan is implemented. The plan is so “over the top” that the US Supreme Court halted its implementation. The Rio Grande Foundation has joined those suing to stop the Plan.

Lest you think Obama’s “Plan” will have a major impact on the environment, EPA administrator Gina McCarthy testified that the rule would have a ‘minimal’ impact on climate.