Source: Energy Information Administration, U.S. Department of Energy

If the 2017 legislative session had a Wishful Thinking Award, it would surely go to SB 312. Backed by Sen. Mimi Stewart (D-Albuquerque) and Rep. Nathan Small (D-Las Cruces), the bill puts the state’s “renewable portfolio standard” on steroids.

The legislation requires “rural electric cooperatives and municipalities” to obtain 70 percent of their juice from politically correct sources by 2040. For “public utilities,” the mandate is 80 percent.

We’re through the looking glass with this one, folks. The chart above reveals an inconvenient truth — that just about every electron used by New Mexican homes and businesses is generated from “fossil” fuels. Skyrocketing the RPS would make the state dependent on expensive and volatile sources for power. As Dax Contreras of The New Mexico Politico noted, “those pushing for renewable sources of energy are blissfully … ignorant of the added costs of imposing such mandates.” For example, the “free” fuel supplied by sunshine and wind is intermittent and unreliable. Back-up generation systems, usually natural gas-based, are a must. And pushers of “green” power never fail to overlook the expenditures (red tape, lawsuits, land acquisition, construction of transmission lines) incurred to move the juice from where it’s generated to where it’s consumed.

The Land of Enchantment’s current RPS, set at 15 percent and scheduled to rise to 20 percent in 2020, is already helping to drive the price of electricity higher. In September, PNM was allowed to raise its rates, and the company is now seeking a new increase. To the south, El Paso Electric “plans to seek a rate hike for New Mexico customers late this spring.”

If SB 312 becomes law, look for rate-hike requests to be more frequent and more severe. Economic-development efforts will be crippled, but New Mexico’s “progressives” can sleep comfortably, knowing that their state gets its electricity from the “right” fuels.

There is a drumbeat emanating from the Capital in Santa Fe, mostly from Democrats, but also from a few Republicans. The message is Our budget is cut to the bone.”

The refrain that New Mexico government is somehow starved for revenue may sound logical, but once you actually look at the data, it falls apart. Check out the charts below which were compiled with data from the website US Government Spending.

As the chart below shows, when it comes to state spending, New Mexico spends more as a percentage of GDP than any of its neighbors. The number is 4th-highest in the nation behind only Alaska, Hawaii, and Vermont.

Factoring local spending in to the number to get state and local spending as a percent of GDP only further illustrates New Mexico’s overspending. The Land of Enchantment is the 3rd-highest spending state (only outpaced by Alaska and Vermont) when state and local spending are calculated as a percent of GDP (see chart below).

In other words, policymakers should spare us the bloviating about NM’s budget being “cut to the bone” and just admit that they are unwilling to make needed cuts or stand up to powerful special interests and would instead prefer to stick taxpayers with the tab for their overspending.

Source: “Iowa’s Privileged Class: State-Government Employees,” Public Interest Institute

For some insight into why politicians are afraid to tackle personnel costs, watch what’s going on in Iowa.

The Hawkeye State’s legislators are exploring ways to get spending on “public servants” under control. Rep. Greg Forristall (R-Macedonia) told The Des Moines Register: “The big thing we’re looking for is to give taxpayers a place at the table. That means they have some say in how the money is spent, and that there are safeguards to see that taxes aren’t increased willy-nilly every time there’s a demand from collective bargaining.” Wages and salaries, healthcare benefits, arbitration, the grievance process — reformers believe, based on ample evidence, that the scales have been tipped in “labor’s” favor for too long.

Iowa’s Public Interest Institute has noted a revealing statistic: In 2015, state workers “received an average wage that was 149.76 percent of what the average private-sector worker in Iowa was paid. Iowa’s Pay Gap was larger than that of any other state.” (New Mexico’s gap was a stunning fifth in the nation.) A straight-up, no-disaggregation comparison is of limited value, of course, but even The New York Times has admitted that studies “have regularly found that state and local governments offer more valuable retirement and health benefits than the private sector.”

Predictably, government unions are militantly opposing even the slightest change to Iowa’s collective-bargaining rules. We’ve seen it all before: chanting, sign-waving, predictions of an impending apocalypse. And it’s getting downright nasty. As KCRG-TV9 reported, a “leaked email advises union members in Iowa on how to prank call … lawmakers to push against a proposal to limit collective bargaining rights.” Using language not fit for Errors of Enchantment‘s family readership, the message, sent by a thug from the Laborers’ International Union of North America, advised union members to have “some fun” and provided “bullet points,” such as “Hey! I didn’t hear you campaign on this S***! You lied to me, not a good idea bro!”

Time will tell if Iowa legislators hold firm, and implement the type of reforms that have paid so many dividends in Wisconsin. Meanwhile, in the Land of Enchantment, taxpayers … wait. There’s zero desire in Santa Fe to rein in out-of-control pay and benefits for government employees, even though a 2014 study by the American Enterprise Institute found a 24 percent advantage for state workers when total compensation (including the value of job security) was scrutinized.

New Mexico’s budget has many opportunities for savings in personnel. Too bad lawmakers, both Democratic and Republican, are focusing almost exclusively on finding “revenue to replenish the state’s coffers.”

For almost two decades, the dairy lobby has asked Washington to act on an issue of vital concern to the Republic: what is and is not “milk.”

The Food and Drug Administration has resisted the industry’s pressure, and declined to wade into the smackdown between cows and their competitors, which include “milk” made from soy, almonds, hemp, sunflowers, rice, and macadamia nuts.

In December, 32 fedpols wrote to the FDA, demanding, as Rep. Peter Welch (D-VT) put it, that the bureaucracy “basically … enforce its own regulation,” since “regulation defines milk as something that comes from a mammary gland.” If the letter doesn’t work, there’s always the Dairy PRIDE Act — that would be the “Defending Against Imitations and Replacements of Yogurt, Milk, and Cheese to Promote Regular Intake of Dairy Everyday Act.”

No word yet on where the Trump administration stands on “real” milk, but the fight has come to New Mexico, with the drafting of SB 161. Sponsored by Cliff Pirtle (R-Roswell) and Pat Woods (R-Broadview), the legislation makes it illegal to “misbrand” a product as “milk” if “its ingredients do not consist of the whole, clean, lacteal secretion, practically free from colostrum, obtained by the complete milking of one or more healthy mammals.”

Truth in advertising is quite valuable, but one needn’t be a supporter of deceptive marketing to doubt the need for SB 161. As the Good Food Institute‘s Joanna Grossman wrote earlier this month, the bill “not only raises serious concerns in terms of needlessly restricting commercial free speech, but it also runs the risk of being challenged on preemption grounds since state law cannot conflict with federal law (which, in this case, sets labelling standards for a wide range of food products).”

Nannying is another reason to be skeptical of SB 161. Bruce Friedrich, a colleague of Grossman’s at the institute, told The Washington Post that “Americans are savvier and they are better able to digest nutritional information. No consumer buys a carton of almond milk and thinks that there’s cow’s milk in the package.” One online commenter put it more succinctly: “This seems like a solution in search of a problem.”

One of New Mexico’s most unique and successful schools of choice is the Estancia Valley Classical Academy (EVCA). As we’ve written about in detail in this space, their charter renewal was recently denied by the Public Education Commission.

If you want to write a letter supporting the re-charter, you may send it to this email: recharter@theevca.com

If you prefer to snail it, send it to:
The Estancia Valley Classical Academy
PO Box 2340,
Moriarty, NM 87035

Feel free to use arguments/details in the link above. Please address your letter as: To Whom It May Concern.

It amazes me that ANYONE can defend New Mexico’s status quo in education. Gov. Martinez (who to be fair has attempted SOME reforms) touted the supposed “success” of her education reforms in the State of the State address earlier this year.

Recently, (and more problematically) as part of his efforts to preserve the status quo in education, Sen. Heinrich refused to support the reform-minded DeVos and tweeted the following:

I cannot support a nominee who wants to weaken the kinds of public schools that New Mexicans rely on. #NoOnDeVos

— Martin Heinrich (@MartinHeinrich) February 7, 2017

Unfortunately, as almost any data on the issue show, New Mexico’s education system is in dire need of being shaken up and reformed. The latest NAEP reading scores (from 2015), for example, ranked New Mexico an astonishing 52nd (behind the District of Columbia and DoD schools). 4th grade reading is extremely important. Unfortunately, both the Democrat majorities in the Legislature and New Mexico’s senators in Washington are status quo when it comes to education (which reigns supreme even in the local school board elections that just took place).

Alas, while New Mexicans love to talk about getting out of 50th (or 51st or even 52nd), they vote like they are happy to be at the bottom. See the sad map showing NM clocking in at 52nd in 4th grade reading:

Tut-tutters who abhor “polarization” and adore “bipartisanship,” rejoice. New Mexico’s Democrats and Republicans have united. So have New Mexico Voices for Children, the Greater Albuquerque Chamber of Commerce, and AARP.

They’re all backing the taxation of online shopping.

HB 202 has passed the Business and Industry Committee, and is now before the Taxation and Revenue Committee. Just one legislator — the heroic Rep. Yvette Herrell (R-Alamogordo) — voted “no.” The bill requires vendors “engaging in business” beyond New Mexico’s borders that have more than $100,000 in annual gross receipts within the state collect the GRT.

As things currently stand, businesses in the Land of Enchantment must pay a “compensating tax” when they buy from out-of-state sellers. But individual e-shoppers, and the vendors they purchase from, escape taxation. HB 202, and its counterpart in the Senate, would change that in a big way.

Rep. Monica Youngblood (R-Albuquerque), drinking the “fairness” Kool-Aid, believes that the bill amounts to “really just closing a loophole.” Not exactly. As as the Tax Foundation’s Joseph Henchman noted: “Despite how the issue has been portrayed, the inability of states to require out-of-state businesses to collect sales taxes is not a ‘loophole.’ U.S. Supreme Court precedent in both the Quill and Bellas Hess rulings stipulate that a seller have nexus with a state before that state can require the seller to collect taxes for sales to its residents. The U.S. Constitution was adopted in large part to prevent states from arbitrarily imposing complicated rules on out-of-state individuals and businesses who may have no say in how those taxes are administered.”

The New Mexico Tax Research Institute‘s Richard Anklam, always eager to please Santa Fe’s revenue-grubbers, has advised legislators that since the GRT isn’t a “true” sales tax, it might not be subject to the High Court’s rulings in Quill and Bellas Hess. But that assumption could be nothing more than wishful thinking. (If anything, the GRT’s targeting of sellers over buyers makes the justification for taxing out-of-state vendors weaker.) And predicting justices’ future decisions on the taxation of Internet-enabled commerce is a dicey endeavor.

At their core, the House and Senate online-taxing bills respect the time-honored New Mexico tradition of making others responsible for the state’s fiscal health. They’re a desperate and legally dubious attempt to deny the need to get the Land of Enchantment’s fiscal house in order through economic-expansion-driven revenue growth and a sweeping right-sizing of state government.

Recently, U.S. Rep. Michelle Lujan-Grisham joined supporters of Obamacare in protesting the possibility that President Donald Trump will repeal or dramatically alter the law. She is not alone. Liberals are hoping to defend Obamacare, despite public-opinion polls, which continue to reflect majority opposition.

There are many (and often, conflicting) aspects to Obamacare, but if Lujan-Grisham truly represented the best interests of New Mexico, she’d be working as hard as possible to at very least reform the Medicaid portion of the law – which will bankrupt our state if it is not reformed quickly.

It is well-known that New Mexico is facing budget shortfalls. These problems are due to a combination of falling oil and gas prices and anemic economic growth.

However, it was Gov. Martinez’s misguided decision to expand Medicaid that could push New Mexico toward insolvency. While touted as an “economic stimulus,” in the upcoming fiscal year, nearly half – 928,000 – of New Mexico’s 2 million people will soon receive Medicaid, a government welfare program.

Despite (or more likely because of) expansion, New Mexico’s budget remains in a deficit and our unemployment rate remains second-highest in the nation at 6.7 percent.

This year, Medicaid expansion is expected to cost New Mexico “just” $45 million. After a few years of the federal government picking up 100% of the tab, New Mexico is now on the hook for 5% of expansion for half of one year.

Next year, with the feds still picking up 95% of the tab, New Mexico’s share of Medicaid expansion jumps dramatically to about $120 million. Over the five-year period from now until 2021 just the expansion cost of Medicaid (10% of which will soon be paid by New Mexico) will cost State taxpayers $778 million. That is money that we simply don’t have – and are not likely to have, barring a miraculous economic turnaround.

Tellingly, in Gov. Martinez’ latest budget proposal, Medicaid was among a tiny handful of spending areas that a significant increase. Schools, roads, courts, prisons, economic development, and just about every other priority our state might have will soon face the money-devouring maw known as Medicaid. Without decisive the welfare program will quickly devour the budget.

Lujan-Grisham apparently doesn’t care if Medicaid destroys New Mexico so long as ever-larger numbers of its citizens receive this government program. But President Trump is not as enthusiastic about Obamacare, or its expansion of Medicaid. He and Congress will likely address problems with the entire law, possibly in the form of Medicaid “block grants.”

A block grant means that a pool of money would be made available to the states. The revenue would be limited and, depending on details, states would be given some degree of freedom to make those dollars stretch to cover the neediest people in the state.

While specifics are being worked out, a block-grant solution would completely change the state’s incentives under Medicaid. As a recent “Progress Report” from the Legislative Finance Committee recommended, New Mexico should “efficiently and effectively use state funds to maximize the ability to draw down the federal Medicaid match, especially in light of uncertain state revenues.”

In other words, Medicaid encourages impoverished New Mexico to fleece taxpayers in the other 49 states. But grab-the-cash could be coming to an end.

With her eye on the governor’s mansion in 2018, Lujan-Grisham would be wise to bone up on ways to make limited Medicaid dollars work for New Mexico’s truly poor.

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

Not every family has the time and/or resources to homeschool their children. But the education-choice option has seen explosive growth in recent years. Homeschooling not only works, big time, it saves taxpayers a bundle.

So kudos to Rep. James Strickler (R-Farmington) and Rep. Stephanie Garcia Richard (D-Los Alamos), who have introduced HB 270. The bill permits any homeschooler to “organize a team consisting of home school students to participate in academic activities” regulated by the New Mexico Activities Association (NMAA). By making them “entitled to regular or affiliate membership in the association,” the legislation will empower homeschooling teams to compete in events such as debates and science fairs. Currently, the only way for homeschooled students to participate in NMAA-sanctioned activities is to join teams under the control of government schools. That’s hardly justifiable, given that parents who educate their own kids pay taxes, too.

Partial homeschooling in the Albuquerque area got a boost this week, with the dedication of a new magnet school where students will “choose 50 percent or 80 percent classroom time, and spend the rest of the day attending home-based instruction.” It is the second such institution, following the “popular … Desert Willow Family School, which has had a waiting list of around 250 for the past five years.”

Interested in homeschooling? This link provides contact info for support groups statewide.

The Federation of Tax Administrators has made 2015 state tax burden data available. Although not a surprise to the Rio Grande Foundation, the data show that as a percent of personal income, New Mexico’s tax burden is on par with that of high-tax California.

As if that is not bad enough, New Mexico’s tax burden is 10th in the nation while its next-highest-taxing neighbor (Utah) comes in at just 31st. Despite New Mexico’s heavy tax burdens, policymakers are meeting in Santa Fe right now considering myriad tax hike bills.

Like the movie “Groundhog Day,” New Mexico’s Democrats keep recycling the same “jobs plan” and calling it something new. As Sen. Clemente Sanchez outlined in today’s Albuquerque Journal, the latest and greatest plan boils down to the following (with a critique of each):

• Broadband expansion: there are ways to reduce regulation that will result in greater broadband deployment, but the Democrats’ plans involve spending more of your tax dollars to deploy broadband, not peeling back regulations;

• Increase Capital outlay spending: Literally this is taking money out of one pocket and putting it in the other and calling it economic growth. Government infrastructure spending must first be taxed away from another productive source;

• Minimum wage increase: Most of New Mexico’s major cities and the counties they are in (Albuquerque, Santa Fe, and Las Cruces) all have minimum wages well-above the federal minimum. One would be hard-pressed to find any positive impact on the economies of these cities. To claim raising the minimum wage will create jobs is just asinine; 

• Industrial hemp research: It is unclear how “hemp research” will be an economic boon, but it is possible that hemp production could create some jobs and productive economic activity. This is the one solid proposal in the Democrats’ plan, but as this article points out, hemp is a water-intensive crop and the economic benefits are rather limited;

Source: Carolyn L. Yocom, “Medicaid: CMS Has Taken Steps, but Further Efforts Are Needed to Control Improper Payments, Testimony Before the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, House of Representatives, January 31, 2017

There are at least a dozen solid reasons why New Mexico should not have expanded Medicaid under Obamacare, but earlier this week, an analyst from the Government Accountability Office raised a seldom-discussed issue with the state-federal healthcare program for “the poor.”

Carolyn L. Yocom, the GAO’s director of health care, testified before Congress that in “fiscal year 2016, improper payments totaled an estimated 10.5 percent … of federal Medicaid expenditures.”

D.C. considers payments improper when federal “funds go to the wrong recipient,” a recipient “receives the incorrect amount of funds,” there is no documentation “to support a payment,” or a recipient uses “funds in an improper manner.” Despite the oversight entities depicted in the graphic above, Medicaid’s improper payments are rising, from $29 billion in 2015 to $36 billion in 2016. (If Yocom has added states’ share of Medicaid spending, the total figure would have reached $60 billion.)

The GAO has “identified four key program integrity issues for the Medicaid program”:

* Eligibility determination is dysfunctional, with “gaps” in government’s ability ensure that only appropriate individuals are enrolled. In addition, beneficiaries have “payments made on their behalf concurrently by two or more states” and payments are made “for claims that were dated after a beneficiary’s death.”

* Oversight of managed care, which handles over “half of all Medicaid beneficiaries,” is weak. The improper-payment rate for providers is “currently less than one percent,” but the estimate “is based on a review of the payments made to managed care organizations and does not review any underlying medical documentation.”

* Ineligible providers are allowed to participate in the program. Bureaucrats access information that is “fragmented across 22 databases managed by 15 different federal agencies to screen providers,” but the databases “did not always have unique identifiers.” As a result, “providers with suspended or revoked licenses, improper mailing addresses, or deceased providers” are paid.

* Individuals are enrolled in Medicaid as well as Obamacare’s subsidized exchanges. Despite “procedures designed to prevent duplicate coverage, it [is] occurring.” The Centers for Medicare & Medicaid Services “has not developed a plan for assessing whether … procedures are sufficient to prevent and detect duplicate coverage.”

With Medicaid “serving” an estimated 44 percent of New Mexico’s population by the end of the current fiscal year, one can only wonder how many taxpayer dollars the program squanders in the Land of Enchantment.

It looks like Bernalillo County, at long last, will be getting its own office building, PNM’s former Alvarado Square office building. We honestly are okay with this as long as that means vacating other office buildings and putting the space back on the market (and possibly back on the tax rolls).

From all appearances, the County seems to be getting a smoking deal and that’s welcome news for County taxpayers. The latest asking price of $2.7 million is a whopping 75% reduction relative to the original $11 million list price for the building.

But, as with any silver lining around here, there is a massive grey cloud looming. That massive price cut is a pretty strong indicator that Albuquerque’s downtown office market is extremely soft and that big companies are not exactly clamoring to obtain office space in downtown Albuquerque which is of course, New Mexico’s largest City.

Meanwhile, in economically-booming Denver, the City’s tallest new skyscraper in 30 years is on pace to open in 2018. Any bets on when Albuquerque’s next skyscraper will be constructed?

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 January, of 16,358 projected jobs, 12,321 — 75.3 percent — were slated for right-to-work (RTW) states:

As for the sub-metrics the Foundation scrutinizes:

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

* RTW prevailed in foreign direct investment, too. Fifteen projects are headed to RTW states, with three to occur in a non-RTW state.

Marquee RTW investments included:

* Forrester Research announced a new office for “inside sales and support” in Tennessee (120 jobs)

* Mueller Industries picked Utah to site a production plant for “copper tube products” (125 jobs)

* Sterilite Corporation, “the largest plastic housewares company in North America,” invested $73 million in a “manufacturing and distribution facility” in Iowa (500 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 AFT has been very active on social media in opposing President Trump’s Education Secretary Betsy DeVos.

They hate DeVos for one simple reason: she supports broad-based government policies aimed at increasing school choice. Every other objection is mere window-dressing.

The AFT touts itself as a “union of professionals,” but is the AFT really an organization that we should trust to make policies for educating our children? I happened to drop by the “Center for Progress and Justice” in Santa Fe a Democrat/liberal epicenter on Cerillos Road just south of St. Francis.

As seen below (a view from the road), the AFT has a presence there. I believe they have offices in the facility and they use it as it was the site of an event with their national boss Randi Weingarten when she visited New Mexico to stump for Hillary Clinton.

As other pictures show (taken of the south-facing wall), the Center for Progress and Justice is no ordinary “center-left” outfit. If anything, from reading the writing on the wall, I’d call their “workers of the world awaken” rhetoric closer to Marxist:

All of this may not change the views we hold of AFT which, like most unions tends to support leftist/Democrat causes “uber alles,” but the fact that they are willing to post their signs in front of a facility that touts such hard-left rhetoric should give us all pause when considering AFT as an arbiter of education policy both nationally and here in New Mexico.

With all the talk about “ethics” and “good government” lately in Santa Fe, Errors of Enchantment has noticed that one reform has yet to pop on lawmakers’ radar screen: taxpayer-funded lobbying.

It’s a problem from coast to coast, but anyone who keeps an eye on politics and policy in the Land of Enchantment knows how pervasive subsidized advocacy here can be. Case in point: an email sent last week from the New Mexico Tourism Department.

The screen capture above indicates how the bureaucracy’s Heather Briganti used her state-provided email account to urge “partners” to show their “support for the department’s budget request” at a rescheduled hearing of the House Appropriations and Finance Committee.

There’s no law against what Briganti did. And she could have gone much further. As the National Conference of State Legislatures notes, New Mexico is one of many states that does not “prohibit state agencies from using public funds to retain a lobbyist.”

But just because something is legal doesn’t make it right. Jefferson wrote that to “compel a man to furnish contributions of money for the propagation of opinions which he disbelieves, is sinful and tyrannical.” Where do New Mexico’s legislators stand on the issue?

Run across a “public” entity using taxpayer dollars to lobby the legislature? Let us know!

The Rio Grande Foundation fully expects to play a lot of “defense” against the deluge of big-government bills moving through the 2017 legislative session. That said, we have worked on a few bills that, if enacted, could improve New Mexico’s economy and promote freedom. All readers are hereby encouraged to contact their legislators in support of these various bills:

HB 213 “Repeal Public Works Minimum Wage Act” would repeal New Mexico’s prevailing wage on construction projects that arbitrarily drives up the cost of roads and schools;

HB 228 “Right to Try” would allow terminally ill patients to try certain drugs not approved by the FDA;

HB 264 “Access to Dental Care Act” would allow for mid-level dental providers called “dental therapists” to practice in rural areas of New Mexico;

HB 226 “Minor Party Candidate Nominating Signatures” would make the signature requirement for 3rd party candidates similar to those for major party candidates thus making New Mexico’s elections more accessible and competitive;

SB 202 “Forfeiture Changes” would make some needed changes and improvements to New Mexico’s landmark 2015 civil asset forfeiture legislation.

HB 275 “Public Private Partnerships Act” Would create a framework under which government could contract with businesses in order to increase/improve the availability of public assets including but not limited to roads and infrastructure.

Find your legislators and their contact information here. You can find out how the RGF is rating bills in real time here.

Watch this space for additional developments and information. Other “pans” are in the fire.

RGF is always looking for ways to reduce state spending and make government more efficient and transparent. The organization’s president Paul Gessing appeared on KOB TV Channel 4 to discuss how procurement reforms and enhanced competition could save money during tough budget times.

A version of this op-ed ran in the Albuquerque Journal on January 30, 2017.

Herbert Hoover.

The name is synonymous with indifferent right-wingery in the face of desperate need for “progressive” change.

Earlier this month, Alan Weber, who in 2014 failed to secure the Democratic nomination to run against New Mexico’s incumbent governor, wailed about “the Herbert Hoover policies of the Martinez administration.” Weber and his ilk are crafting a narrative they think will help them achieve legislative victories: New Mexico’s many woes are due to the cruel, anti-government policies pursued by Susana Martinez. The answer to the state’s dismal condition is to go back to a progressive future — and a repeal of her misguided cut in the corporate tax is a good place to start.

But how much change has the governor brought to public policy in New Mexico? Looking at the record, it’s quite clear that it has been mostly business as usual in Santa Fe since Martinez took office. The major reforms that conservatives, libertarians, and free-market voices advocate at the state level have fared very poorly in the last six years:

Tax Cuts: Martinez did sign a modest, multi-year reduction in the corporate tax. But the levy is a miniscule revenue-producer for the state — even before the phase-down, its share of state-raised taxes was in the mid-single digits. (And as the New Mexico Tax Research Institute noted, the revenue raised by the tax is “somewhat volatile and often fickle.”) Most workers in the Land of Enchantment’s private sector are employed by firms that do not pay the corporate tax, but pass their profits through to owners/investors, who are taxed on their income.

Tax/Expenditure Limits: Alone in our region, New Mexico has no limit on the taxes it can impose, and no cap on how much state government can spend. And it’s probably not a coincidence that expenditures are excessive. In 2014, the most recent year for which U.S. Census Bureau data are available, per capita spending was $8,495 — dwarfing our neighbors Oklahoma ($6,028), Utah ($5,790), Colorado ($5,722), Arizona ($4,937), and Texas ($4,843).

Right to Work: It’s indisputable that ending compulsory unionism can be a major factor in boosting economic development. A right-to-work law means job growth and incomes, once adjusted for purchasing power, that surpass those in states without labor freedom. But right to work is dead in Santa Fe — at least until a new crop of legislators is elected.

School Choice: The value of a skilled workforce is another driver of investment and job-creation. Recognizing the failures of a monopolized, unionized education “system,” many states have moved toward K-12 competition. New Mexico has not joined in. Its charter-school law is weak, vouchers are nonexistent, and no tax credits are available for donations to scholarship-granting charities. Even the left-leaning Brookings Institution gives the state’s largest school district a “D” on its “Education Choice and Competition Index.”

Regulations: New Mexico has some of the most burdensome occupational-licensing rules in the nation. But despite an emerging left-right consensus on the need for reform, there has been no progress on cutting the red tape that hinders many people’s ability to earn a livelihood. The prevailing-wage mandate, which limits the contractors that can bid on public construction and thus drives up costs to taxpayers, remains stubbornly resistant to reform, much less repeal. And competition in the electricity market, adopted by a wide margin of Nevada’s voters in November, has no champion in Santa Fe.

Healthcare: In perhaps the state’s worst public-policy blunder in decades, Martinez fell for the claim that a radical broadening of Medicaid eligibility would be both affordable and serve as a “economic stimulus.” Her decision surely pleased liberals, but we now know what a disaster expansion has been. Enrollment soared past expectations, the bills are enormous, and the boost to the economy never arrived.

Has the red-state model really been implemented under Susana Martinez? It certainly doesn’t appear so. Maybe the answer to New Mexico’s twin crises of fiscal strife and economic carnage is to finally implement a policy programme geared toward limiting government and spreading opportunity.

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.

The Albuquerque Journal had another useful and depressing article about the sorry state of the New Mexico economy in Sunday’s paper.  There were several interesting aspects to the story. For starters, I know Michael Coleman is the Journal’s DC reporter, but talking to the Congressional delegation about the State of New Mexico’s economy is like talking to the average New Mexico legislator about relations with Russia or Egypt. It’s simply not in their wheel house (and it showed).

Gov. Martinez’s spokesman at least provided a reasonable analysis: basically, the Gov.’s spokesman noted that NM has always relied on DC and oil/gas prices and that those have not been as reliable as in the past. The argument that sequestration is to blame for NM’s woes is somewhat laughable, but other than that it is close to the truth. I truly wonder where was this line of argument was during the 2016 election when Martinez lost her majority in the NM House and saw Republicans lose several seats in the Senate.

But, when compared to Sen. Udall and Rep. Ben Ray Lujan, Gov. Martinez’ response looks positively brilliant.

Udall who trotted out the usual liberal hobby-horses: early childhood education, improved health care (he must have forgotten that nearly 50% of NM’s population is on Medicaid thanks to Medicaid expansion), and economic diversification (whatever that means). All I can say is that he should definitely stay in Washington and not run for Governor where he could do real damage.

Rep. Ben Ray Lujan claims high-speed internet access, job training, and education are the keys to success. No data supports his or Udall’s statements, but that’s the point. These guys are clueless.

One thing that would help is for New Mexico to embrace a “right to work” law as 27 states have now done, but they oppose this reform for reasons of ideology and self-interest.

Alas, given the current political situation in the Legislature, New Mexico will continue to hemorrhage people and will continue to send economic illiterates to Washington. If we keep losing population, perhaps we’ll someday send one less economic illiterate to Washington.

A former mayor of Albuquerque wrote an article defending the district for its poor academic performance. His basic thesis being: poverty makes it impossible for the District to perform as well as other, more economically-prosperous districts.

All I can say is “wow” and that this is the type of defeatist attitude that has led New Mexico to its current sorry state. We can’t develop our economy because we are too isolated and don’t have enough water (to name a few issues). We can’t educate our kids because we our too poor. I guess we should just give up.

The fact is that school choice has repeatedly been shown in empirical analyses to improve student outcomes, but APS has opposed choice and worked in the Legislature to oppose it.

The Democrat-controlled Legislature is in session RIGHT NOW. They COULD adopt school choice to help fix the situation right now. They won’t, not because it doesn’t work, but because of politics and the fact that too many New Mexicans have accepted the lie that we are somehow too poor to succeed.

Still don’t believe that poverty can be overcome? Look at the international PISA test results and see how many countries far poorer than the USA are beating us educationally:

The hand-wringing has begun. America’s new chief executive has signed off on a hiring freeze for the federal government, and predictably, New Mexico’s establishment is panicking.

In the Santa Fe New Mexican, U.S. Sen. Tom Udall whined that hiring freezes “hurt the American people and cost the taxpayers more money,” while Big Labor bigwig Jon Hendry wailed that the president “can’t expect to do everything he is expecting us to accomplish on a national basis and not give us resources to do it. There is no logic to that.”

A right-sizing of the federal bureaucracy — civilian staffers and contractors — is long overdue. But wherever one stands ideologically and politically, there’s no question that New Mexico is particularly susceptible to changes in federal personnel policy. The most recent analysis by the Fiscal Federalism Initiative of the Pew Charitable Trusts found that cash from D.C. accounts for a jaw-dropping 32.1 percent of the state’s gross domestic product. That’s more than double the figures for economic-development dynamos Texas (14.2 percent) and Utah (15.5 percent), and well above the comparable shares for Colorado (17.0 percent), Oklahoma (21.8 percent), and Arizona (24.4 percent).

New Mexico’s governor and state lawmakers should see the hiring freeze as an opportunity — a chance to finally adopt proven policies that will establish, once and for all, a vibrant private sector in the Land of Enchantment. Will they? Well, there’s always the 2019 session….

In one of his first official acts since ringing in the New Year on the Plaza, Santa Fe Mayor Javier Gonzales revealed his New Year’s resolution: to impose a new tax on Santa Fe residents (the bill is expected to be introduced at tonight’s Council meeting). Despite recently praising himself in interviews for not raising taxes, Mayor Gonzales is expected to call a special election for a one cent per ounce tax on a wide range of beverages such as soda, energy drinks, lemonade, iced tea and even almond milk.

A Rio Grande Foundation analysis of records and communications released under the Inspection of Public Information Act, along with media reports and other publicly available documents concluded that the mayor has been less than forthcoming about his desire to impose new taxes on Santa Feans.

“From the outset, Mayor Gonzales has desired more taxes to fuel more government spending,” Paul Gessing, president of the Rio Grande Foundation, said. “Our analysis exposes the absurdity of him using tax hikes to masquerade as a public health crusader instead of a typical tax-and-spend politician.”

The analysis can be found on the following pages. Among the key findings:

• Mayor Gonzales misled the public about his intention to impose a beverage tax from the start.
• Mayor Gonzales’ community experts rejected his tax, calling it “the worst thing we could do.”
• Mayor Gonzales’ assertion that his soda tax will bring in $10 million annually is a fantasy.

Additionally, this beverage tax will significantly increase the cost of doing business for retailers, and almost all consumers will see higher grocery bills. Low income residents will bear the brunt of Mayor Gonzales’ regressive new tax.

“Just as his community experts did, Santa Fe city councilors should reject this proposal and say ‘No Taxation on Carbonation,’” Gessing said.

Examining records and communications released under the Inspection of Public Information Act (and currently available at Santa Fe City Hall), along with media reports and other public records, the Rio Grande Foundation arrived at the following conclusions regarding Santa Fe Mayor Javier Gonzales’ proposal to impose a one cent per ounce tax on sweetened beverages:

• A beverage tax was the intended outcome of the mayor’s resolution to “explore active ways of reducing sugar intake” among Santa Fe residents
  • Before the resolution was made public, Santa Fe Legislative Liaison Jesse Guillén called a tax on sugary drinks “a good place to start.” The mayor seemingly agreed and replied with an article about taxing beverages.
    https://postimg.org/image/a9vi3xfb/
  • Days later, model legislation of a beverage tax similar to the mayor’s proposal was circulated among the mayor and his top-level staff
    https://postimg.org/image/stt5q4svl/

• Mayor Gonzales misled the public about his intention to impose a beverage tax from the start
  • In response to questions from the Albuquerque Journal spurred by the Rio Grande Foundation, the mayor directly denied his resolution lays the “groundwork” for a beverage tax, even though internal emails show plans for one were already in the works.
    https://postimg.org/image/j57x0mgm7/
  • Afterward, the Rio Grande Foundation warned, “don’t buy the mayor’s claim that his resolution “‘doesn’t lay the groundwork for anything but a healthier community.’ Taxing soda has become an idée fixe for the left’s unsleeping army of lifestyle police.”
  • While the resolution was in the draft phase, Guillén suggested removing a reference to taxes because it would “fan conspiracy flames.” We now know Rio Grande Foundation wasn’t chasing a conspiracy after all.
    https://postimg.org/image/48w2zmt0j/

• After his masquerade was rejected, Mayor Gonzales did an about-face: From public health to revenue
  • Gonzales initially said, “This is a public health issue and all we’re doing with this resolution is asking our community experts, the Santa Fe Food Policy Council, to study the issue and come back to us with some options… Once they do that, we’ll take a look at what they recommend, have our discussion and then decide what we do or do not support.”
  • Gonzales’ community experts determined that “education is key” to reducing sugar intake and “imposing additional taxes [soda tax] would be the worst thing they can do.”  https://postimg.org/image/scykdu3m9/ (full minutes)
  • Gonzales ignored their advice and announced his tax scheme two weeks later.
  • In an apparently retreat from his concern about sugar consumption, he claimed to support the beverage tax “[a]fter determining that small increases in property or gross receipts taxes wouldn’t raise enough” revenue.

• The mayor’s plan is built around a faulty economic premise
  • Mayor Gonzales said because his proposed tax is not a sales tax, prices for consumers won’t increase. The mayor doesn’t understand a basic economic principle: Businesses don’t pay taxes, people do.
  • In Philadelphia, where a similar tax took effect on January 1, “consumers appear to be bearing the full brunt” and some “are stupefied at the increased cost.”
• Mayor Gonzales’ assertion that his soda tax will bring in $10 million annually is a fantasy
  • A $.02 per ounce soda tax hike in is projected to bring in only $3.8 million each year in Boulder, Colorado, even though it is twice the rate of the Santa Fe proposal and Boulder is a more populous city.
  • Soft drink consumption in the United States has been on the decline for years, making beverage taxes an “unreliable and unsustainable revenue source,” according to the American Beverage Association.
  • This means revenues will likely need to be shored up year after year with additional taxes, such as the property tax or Gross Receipts Tax increases the mayor also considered.

Look at the bills scored so far on the Foundation’s 2017 Freedom Index, and it’s easy to get depressed.

Tax hikes, new regulations, higher minimum wages, abandonment of the Electoral College, more revenue devoted to “early childhood education” — it’s a grisly scene. (Elections have consequences.)

But one of the few bills that lands on the positive side is SB 5. Sponsored by Roswell’s Cliff Pirtle, the legislation promotes fiscal and individual responsibility, and earlier this month, the justification for the bill received a boost from an unlikely source.

Currently, beneficiaries of food stamps — more precisely, the Supplemental Nutrition Assistance Program (SNAP) — can use the vouchers to buy a wide range of groceries. Pirtle’s bill applies the restrictions placed on purchases under the Women, Infants, and Children program to food stamps. Baby formula, milk, peanut butter, fish, cheese, fruit /vegetable juices, and bread would be permitted, and SB 5 includes meat as well.

A cruel reform? Not according to a report commissioned by the U.S. Department of Agriculture. Researchers, examining transactions at a “leading grocery retailer,”  found that SNAP households spent 5.44 percent of their expenditures on soft drinks. That was more than milk (3.85 percent), fresh chicken (1.85 percent) water (1.17 percent), and potatoes (0.74 percent). Food-stamp “families” spent substantially more on soda than non-SNAP households, which held their liquid-candy bill down to 4.01 percent.

Source: “Foods Typically Purchased by Supplemental Nutrition Assistance Program (SNAP) Households,” Nutrition Assistance Program Report, Food and Nutrition Service, Office of Policy Support, U.S. Department of Agriculture, November 2016

Marion Nestle, a well-known (and liberal) professor of nutrition and food studies at New York University, told The New York Times that the finding is “pretty shocking,” and amounts to “a multibillion-dollar taxpayer subsidy of the soda industry.”

Agreed. That’s why reasonable (and public-health-promoting) restrictions on welfare are so important. Keep an eye on SB 5. It will indicate whether lawmakers in Santa Fe are serious about fiscal responsibility and fighting the obesity epidemic.

Update: “Five Democratic state senators banded together Tuesday to block a Republican bill aimed at prohibiting people on food stamps from buying soda, candy and other junk foods.”