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.

Southwest Cheese Company, “one of the largest and most successful cheese and whey protein manufacturers in the world,” set up shop in Clovis a decade ago. It’s expanded operations twice, and is planning to do so again.

Great news, right? Well, yes and no.

Last week the Clovis News Journal reported that city commissioners “passed a measure clearing the way for a $350,000 grant to help fund the third phase of the Southwest Cheese plant expansion effort.” The money is funded through the Local Economic Development Act (LEDA), which the state claims “allows public support of economic development to foster, promote, and enhance local economic development efforts while continuing to protect against the unauthorized use of public money and other public resources. This empowers communities to embark on economic development projects tailored to their LOCAL needs.  In essence, LEDA is used to enter into a ‘public private partnership’ for an economic benefit.”

But LEDA’s “benefits” have been tough to verify. According to the Legislative Finance Committee, “the state does not receive sufficient reporting from businesses using tax incentives and [LEDA] funds to properly evaluate these programs. As a result, it is impossible to determine the relative effectiveness and cost-efficiency for these programs or to determine if they provide a positive or negative financial return for the state. It is also impossible to evaluate if these programs act as rewards for job creation that would have occurred absent the incentives. [The Economic Development Department] reported fewer jobs in FY15 than in FY14 despite spending about twice as much in LEDA funds.”

That’s public policy in New Mexico — revenue flows to programs and “incentives,” with rarely any analysis of return on “public investment.” Whether it’s lottery scholarships or preschool or “job creation,” taxpayers lack evidence that their dollars are wisely spent. Isn’t it time to do something about that?

The following letter ran in the Albuquerque Business Journal on May 23, 2016.

Resources like oil and natural gas are boons for smart policymakers. On their own, they have enormous potential to create jobs, profits, and positive effects on economies near oil drilling sites. These benefits are balanced by inevitable swings in oil prices which can result in well shutdowns and worker layoffs. Jerry Pacheco notes that these negative effects can extend outside of the petroleum industry, and affect state budgets.

The issue is not that resources are a “curse.” Rather, it’s all about how you manage them and diversify your economy. Texas and New Mexico, while neighbors, are very different. New Mexico lags behind Texas in ratings of poverty, GDP per capita, and income. In other words, New Mexico is poorer than Texas by several measures.

In large part, this contrast is driven by vast differences in public policy and business culture. Texas is a “right to work” state that taxes neither business nor personal incomes. It also has a very pro-business culture and has numerous major companies headquartered within its borders.

New Mexico, on the other hand, places high tax and regulatory burdens on businesses and has a culture that is suspicious of outsiders and for-profit enterprise. Outside of oil and gas, New Mexico tends to rely on government. Government efforts are often unresponsive to market demands, and based more on what sounds good to politicians than what actually makes financial sense. Spaceport America, a government project, now sits empty as taxpayers continue to provide for its upkeep.

Tristan Goodwin
Policy Analyst
Rio Grande Foundation

The media are reporting that New Mexicans can expect Blue Cross to return to New Mexico’s Obamacare exchange for 2017. That should be good news, but the fine print is more troubling.

According to Politico, (article is behind a paywall) “Blue Cross and Blue Shield of New Mexico might return to the state’s Obamacare exchange for 2017 – but it wants to raise average rates for individual plans by more than 80 percent over what it charged last year.

Two other carriers – New Mexico Health Connections and Presbyterian Health Plan – are seeking average increases of more than 30 percent next year for individual plans.”

So, before supporters of the disastrous ObamaCare law get too excited, they should realize just how much these plans are costing average New Mexicans. Blue Cross President Kurt Shipley put the best possible spin on the situation saying the 83 percent listed by the state doesn’t accurately reflect proposed rates because new plans will be offered and the premiums will be competitive with those of other insurers in the New Mexico market. In other words, since consumers are forced to purchase “Mercedes Benz” plans as opposed to Hyundai plans, prices will go up.

That is little consolation for those getting socked with 83 percent rate hikes….and it doesn’t explain why New Mexico Health Connections and Presbyterian plans are going up by more than 30 percent.

I guess there is always Medicaid!

Think revenue from oil-and-gas taxes is volatile? Take a look at the states that have targeted “millionaires” for sky-high levies on personal income.

In New Jersey, Governor Chris Christie is planning to close a $1 billion budget gap for the current and 2017 fiscal years. The red ink is the result, NJ Advance Media reported, of “lagging gross income tax collections from workers’ withholdings and from such non-earned income as capital gains, which together account for 40 percent of the state’s total revenue.”

The Garden State imposes an income-tax rate of 8.97 percent on both singles and married couples with annual earnings greater than $500,000. Such greedy government played a role in the decision of hedge-fund manager David Tepper to flee. Earlier this year, the Associated Press reported that

legislative budget forecaster Frank Haines cited the billionaire’s move to Florida as a potential factor in how much income tax revenue the state brings in. Income tax revenues make up the biggest share of cash in state coffers, and a shift in projections of as little as 1 percent amounts to about $100 million, forecasters say.

It’s unclear how much effect Tepper’s departure could have, because his tax returns haven’t been made public and it’s unknown how much taxes affected his move. Tepper didn’t return messages seeking comment.

But his move has caught the attention of the usually headline-shy legislative budget office.

“If a very wealthy individual — potentially a significant taxpayer to the state — relocates and relocates not only as we’ve been reading about it but really relocates for tax purposes … beyond our reach, then that’s something to be aware of,” said Haines, the legislative and budget finance officer.

Nearby, in Connecticut, “Thomas Peterffy, one of three Connecticut residents with an 11-figure net worth,” joined Tepper in Florida. “C. Dean Metropoulos, an investor and food industry executive who controls Hostess Brands, is also now a Palm Beach resident, according to Forbes.”

Even the left-ish Pew Research Center has concluded that “states are finding that taxing the incomes of the rich means living with unstable budgets.”

Policy has consequences. Politically popular “fixes” to fiscal woes often have unintended impacts. Something to remember the next time New Mexico’s liberals — taxpayer-funded and otherwise — call for higher taxes on “the rich” as a tool to address the Land of Enchantment’s mounting deficits. Hiking marginal income-tax rates makes the state less attractive for residents and relocators alike. But it also makes budgeting more difficult.

(Albuquerque) New Mexico could make significant improvements to its criminal justice system by embracing a common-law principle called mens rea.

A new Rio Grande Foundation paper describes in detail why the New Mexico Legislature should embrace the principle of “guilty conscience” in criminal justice. As described by Roscoe Pound, the dean of Harvard Law School from 1916 to 1936: “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.”

In the late 19th century, industrialization prompted the creation of regulatory authorities at the federal, state, and local levels. Over the decades, and continuing today, a myriad of rules came to govern “the environment around us, the food we eat, the drugs we take, health, transportation, and housing, among many others.”

One of the best examples of an egregious strict-liability prosecution at the federal level occurred in the Land of Enchantment. In 1996, Bobby Unser, a three-time winner of the Indianapolis 500, went snowmobiling with a friend near Chama. A flash snowstorm blew in, and whiteout conditions caused Unser and his companion to become trapped.

Severely ill and exhausted after two days and two nights, the men found a barn with a phone and called for help. But once Unser informed the US Forest Service of the incident, he was prosecuted for entering a “wilderness” area – even though there was no proof that such a violation took place. In 1997 he was convicted and fined by US District Judge Lewis Bacock. The conviction was appealed, but ultimately Unser’s prosecution was left to stand after the US Supreme Court refused to hear the case.

Unser’s case illustrates broader problems with the lack of a mens rea requirement. The New Mexico Legislature can take another step – as it did in 2015 with standard-setting civil asset forfeiture reforms – to reverse the tide of overcriminalization while continuing to protect those who are genuinely harmed by bad actors.

The full paper, “Accidental Criminals: Why New Mexico Needs Mens Rea Reform” is available here.

“We’re growing the health care safety net to help more people.”

That’s Human Services Department spokesman Kyler Nerison, boasting about how Medicaid expansion has pushed the share of New Mexico’s population without “health insurance” down to 10.2 percent.

Wait a second. Getting on a welfare program does mean one has “insurance.” And it’s not at all clear that, broadly speaking, Medicaid expansion means more “help” for New Mexicans. Access and quality problems are severe, and honest researchers have found verifiable positive outcomes from Medicaid enrollment tough to document.

So what’s going on here? New Mexico’s taxpayers are bearing the relentless burden of liberals’ obsession about “the uninsured.” For decades, the fact that some Americans lack health insurance garnered votes and power for Bernie Sanders-style populists. But for those willing to undertake the task, unpacking the data on the uninsured was revealing. Some were already eligible for Medicaid and/or other government programs. Some were illegal aliens. Some were young, healthy, and not at serious risk of an illness or injury. Furthermore, the duration of most uninsured periods was rather short. And charity and cash discounts helped the uninsured access care more than was commonly understood. No better evidence for this phenomenon existed than Oregon’s pre-Obamacare expansion of Medicaid. As Avik Roy noted, when a “lottery” was held to sign up new beneficiaries, “40 percent of those who ‘won’ … didn’t bother to sign up.”

Lack of insurance was a problem — not a crisis. And the solution was broad agenda of market-oriented reforms that would have dramatically lowered the cost of premiums, and this permitted more individuals and employers to purchase coverage.

Instead, we got Obamacare. Medicaid expansion, massive new mandates, and subsidized insurance through “exchanges.” It isn’t working. Then again, it couldn’t. A few months ago, the National Center for Policy Analysis’s John R. Graham wrote what is perhaps the best summary of the “Patient Protection and Affordable Care Act”: “Obamacare is a welfare program camouflaged as a reformed health insurance marketplace.”

The Human Services Department predicts that by 2020, 43 percent of New Mexicans will be on Medicaid. But that’s just one part of the larger atrocity of taxpayer-provided healthcare. The U.S. Department of Health and Human Services reports that 53.9 percent of residents here currently have “public health plan coverage.” That is the largest portion among the states, and far higher than our neighbors Utah (23.6 percent), Texas (28.3), Colorado (30.2 percent), Oklahoma (36.5 percent), and Arizona (41.0 percent).

Single payer, here we come!

No matter what your views on climate change, whether you think it is a clear and present danger caused by man, man-made but not a crisis, or simply not happening or caused by humans at all, we should all agree that the ability to discuss and debate the issue is fundamental to being an American and must be defended at all costs. Unfortunately, New Mexico’s attorney general, Hector Balderas, has joined with more than a dozen attorneys general from around the nation in an effort to stifle free speech  and debate on climate change.

Today, the Rio Grande Foundation joined the Washington-based Competitive Enterprise Institute (CEI) by signing on to a full-page advertisement in The New York Times highlighting abusive efforts by New York Attorney General Eric Schneiderman, U.S. Virgin Islands Attorney General Claude Walker, and a coalition of other “AGs United for Clean Power” to silence the speech of more than 100 businesses, nonprofits, and private individuals who question the AGs’ positions on climate change.

CEI has found itself squarely in the cross hairs of the AGs including aggressive subpoena’s and other efforts to undermine the non-profit organization.

View the ad as a full color PDF here. Full text of the ad is below.

ABUSE OF POWER

All Americans have the right to support causes they believe in.

The right to speak out is among the most fundamental principles of American democracy. It should never be taken away.

Yet, around the country, a group of state attorneys general have launched a misguided effort to silence the views and voices of those who disagree with them.

Recently, New York Attorney General Eric Schneiderman, U.S. Virgin Islands Attorney General Claude Walker, and a coalition of other “AGs United for Clean Power” announced an investigation of more than 100 businesses, nonprofits, and private individuals who question their positions on climate change.

This abuse of power is unacceptable. It is unlawful. And it is un-American.

Regardless of one’s views on climate change, every American should reject the use of government power to harass or silence those who hold differing opinions. This intimidation campaign sets a dangerous precedent and threatens the rights of anyone who disagrees with the government’s position—whether it’s vaccines, GMOs, or any other politically charged issue. Law enforcement officials should never use their powers to silence participants in political debates.

We are standing up for every American’s First Amendment right to speak freely. We hope you will join us. This is a critical battle, and it will determine whether our society encourages spirited debate or tolerates only government-approved opinions.

The biggest economic issue facing New Mexico these days is budget uncertainty, especially declining revenues due to the price of oil being lower than in the recent past. It is worth noting that a barrel of oil is now above $48 for the first time in 7 months. Nonetheless, New Mexico’s oil producers are still dealing with the rapidly-changing market and a great deal of uncertainty (both from the market and from Washington). That all impacts how much oil is actually produced and sold in New Mexico which in turn impacts state revenues.

The  following story which I haven’t seen anywhere else was run in the Albuquerque Journal on Thursday, May 12. It states that state revenues are down by 10% for the first 7 months of 2016. With a $6.2 billion annual general fund budget,  that puts New Mexico short by about $620 million. Rainy day funds can help temporarily, but with the cost of Medicaid expansion growing rapidly, New Mexico’s elected leadership faces some real challenges (and tough decisions) sooner than later.

Chief Executive has issued its annual analysis of the Best & Worst States for Business. The “canvas of CEO opinion” examines taxes, regulations, workforce quality, and quality-of-life metrics.

No, New Mexico doesn’t rank last. Our low costs and favorable weather make it virtually impossible for the Land of Enchantment to score as poorly as New York, New Jersey, Connecticut, and Illinois.

But predictably, New Mexico was the Southwest’s poorest performer. Each of our neighbors fared better.

Chief Executive‘s editor-in-chief noted that “Texas and Florida top the list, as they have every year for the past 12 years that we have conducted this survey. Despite having been hit hard by the shale energy bust, Texas is still held in high esteem by CEOs for its favorable economic reforms. But each year, Florida steadily edges up in the qualitative measures. The Sunshine State added 1 million private-sector jobs over the last five years, cut taxes 50 times and got rid of 4,200 burdensome regulations.”

Meanwhile, New Mexico’s economic-development groupthink slogs ahead, pressing the same tired, proven-to-be-ineffective measures that have failed to build a vibrant private-sector economy here. Last week, at a Legislative Finance Committee hearing, the brain-dead inertia continued. The Santa Fe New Mexican‘s Bruce Krasnow reported that witnesses — he mislabeled them “top economic development experts” — told lawmakers that “education and workforce development” were the tools to “to create jobs and set New Mexico’s economy on a path of long-term growth.”

NMSU’s Christopher Erickson, Krasnow wrote, recommended that the state “do a better job of investing in education to build a smarter, more talented state.” (An educrat advocating for more education funding. Shocking.)

Workforce quality matters, of course, but it’s not the sole determinant of success. Far from it. South Carolina, Tennessee, and Nevada are hardly intellectual powerhouses, but all three score well on Chief Executive‘s survey. (South Carolina is the breakout star of the Rio Grande Foundation’s monthly tally of Right to Work’s advantage in job-creation.) Massachusetts and Maryland, where educational attainment is stellar, landed near the bottom.

How many more reminders do New Mexico’s elected officials need? Deregulation, tax cuts, labor freedom, school choice, and smart infrastructure spending (i.e., no “transit” boondoggles, no empty spaceports) offer the best chance to build prosperity in our deeply dysfunctional state. How much longer do we have to wait?

On Sunday, the chief of New Mexico’s Children, Youth And Families Department bragged that since 2010, spending on the state’s “early childhood service programs — child care assistance, home visiting, pre-K and early pre-K — has grown by $47 million.” Monique Jacobson further beamed that “a new report from the State Preschool Yearbook showed that New Mexico increased pre-K enrollment and improved its rank 10 spots to 18th in the nation.”

Taxpayers are supposed to be happy about that?

As the American Enterprise Institute’s Katharine B. Stevens noted, “there’s no evidence that universal pre-K comes even close to its touted capacity to move the needle for disadvantaged children.” Since 1970, “the percent of 3- to 5-year-olds attending pre-primary education has increased dramatically,” yet the development has “had literally no effect on students’ [National Assessment of Educational Progress] reading and math scores by the time they reach 12th grade.”

Closer to home, and more recently, in New Mexico, between 2011 and 2015, NAEP scores for fourth-grade reading fell from 233 to 231. Fourth-grade math scores fell from 208 to 207. There’s zero evidence that the past decade of mounting preschool expenditures has produced results. Stagnant achievement remains the norm.

Reflexive support for preschool in the Land of Enchantment is a bipartisan scandal. Neither Democrats nor Republicans are willing to face the truth that “early childhood education” is not living up to its hype. Instead, the subsidies keep flowing, liberals preen themselves on their “compassion,” educrats collect their paychecks, and taxpayers receive zero return on their “investment.”

What we do know is that PV solar costs considerably more than traditional energy sources (as seen in the chart below). If people want to buy their own solar, that is their choice, but the City of Albuquerque should not be foisting higher cost electricity on taxpayers in an already-struggling economy.

Our luncheon with Ilya Shapiro on the legacy of Justice Antonin Scalia and the future of the US Supreme Court was a big success. More than 70 people showed up to hear Shapiro’s message.

You can listen to the audio of Shapiro’s interview with Bob Clark of 770KKOB AM here. Just look for the interview labeled “The Future of the US Supreme Court 5-12-16.” A few photos of the event can be found below.

The Journal’s Winthrop Quigley responded to the Rio Grande Foundation’s recent op-ed appearing in these pages by assembling a team of ideologically sympathetic economists from around New Mexico to generate a six-page policy brief. Clearly, our work is touching a nerve.

The paper, which we have reviewed, contains some points of agreement (the gross receipts tax in its current form is seriously flawed) and many more points of disagreement, but neither in his most-recent column, nor in their paper, do Quigley and friends ever make a clear (let alone convincing) case for raising taxes on hard-working New Mexicans.

The tax-hikers’ most compelling point is that when state and local burdens are taken together, New Mexico’s overall tax bill is slightly below average. A 2016 Wallethub report places New Mexico 26th among US states in this regard, with a burden that is 0.48 percent less than average. That hardly justifies tax hikes. Delaware, for example, imposes a burden that is 44 percent below average. Does that mean their politicians must raise taxes immediately? Hardly.

Besides, we agree with Quigley’s economists (and most any economist around) that New Mexico’s tax structure is deeply flawed. So let’s come together to reform the gross receipts tax in ways that don’t lead to rent-seeking among interest groups while causing pyramiding and chasing small businesses and entrepreneurs out of state. Why make a bad system (and New Mexico’s struggling economy) worse by increasing the burdens it imposes?

It is worth reminding readers that our response to Quigley came after three separate columns from him arguing for higher taxes. He has now taken a fourth column to respond to our response.

In those three columns, Quigley included data that would lead readers to believe that New Mexico’s government is smaller than most and that higher taxes are a reasonable and necessary response to the state’s financial woes. While the Rio Grande Foundation spends a vast majority of its time researching and reporting on our state’s heavy regulatory burdens, business-unfriendliness, and corporate welfare, ample data do suggest that New Mexico’s government workforce is both bloated and overcompensated.

Quigley’s economists – some of whom are government employees – argue that because New Mexico teachers are considered state workers, data showing that New Mexico has the 2nd-largest (state and local) government workforce among U.S. states is wrong. But Governing magazine’s most recent data ranks New Mexico 10th in the nation for non-education, full-time government workers per capita.

According to Governing, New Mexico has 268 per 10,000 while neighboring Texas has 212 and Arizona has 188.

Quigley’s economists take issue with our data which indicate that New Mexico state and local workers make 20 percent more than their private-sector counterparts when retirement and other benefits are included. They somehow argue that salaries of New Mexicans working at federal installations should be included in the comparison.

This is just silly. Yes, New Mexico has far more than its share of federal workers. That workforce looks even larger when you consider our state’s anemic private sector. But adding federal employees – whose salary is politically determined in Washington and is minimally impacted by local economic forces – makes no sense. In reality, New Mexico’s state and local governments are competing with the private sector for workers. And, when everything is accounted for, those government employees are well-compensated.

Like Quigley and his friends, we at the Rio Grande Foundation wish to have an honest and open discussion about New Mexico’s struggling economy. It is an issue that impacts educational attainment, crime, and the state’s fiscal condition.

Unfortunately, for too long (decades, not years), New Mexico policymakers have relied on federal spending and the oil and gas industry to drive our economy. For a variety of reasons, those economic engines have stalled.

We believe that raising taxes would further hinder the growth of New Mexico’s private sector economy and will continue to research and share ways to make our State government more efficient, not bigger.

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

Joel Kotkin is an invaluable demographer. An expert on how Americans actually live — as opposed to how Nanny State elites want us to live — he’s issued his 2016 list of “The Best Cities For Jobs.”

Kotkin’s survey documents “the robustness of a region’s growth both recently and over time, with a minor addition to mitigate the volatility that the Great Recession has introduced into the time series.” The goal is “to capture a snapshot of the present and prospective employment outlook in each MSA.”

You know where this is headed.

Of 98 mid-sized metro regions, Albuquerque ranked a dismal 85th. Even Canton, Worcester, New Haven, Green Bay, Toledo, Portland (Maine), and Springfield (Massachusetts) fared better. For the 253 smaller urban regions Kotkin examined, Santa Fe ranked 156th, Farmington 169th, and Las Cruces 191st.

Mired in Big Government, federal dependence, one-party rule, and implacable resistance to pro-growth policy changes, policy-wise, the Land of Enchantment is stuck on stupid. Broad, sweeping changes are needed — now. Let’s get started.

Various health care experts have noted that ObamaCare, which was created by an Administration and Party that opposes the very free market principles underpinning health savings accounts, actually made HSA’s an increasingly-popular option for Americans. HSA’s are simply tax-free savings accounts that allow people to use those pretax savings dollars for daily medical expenses and then only use the insurance policy for serious health problems or accidents. Today, more than 11 million Americans (including me) have an HSA.

Unfortunately, having already lost my insurance once thanks to ObamaCare, thanks to Obama Administration efforts to kill HSA’s, I may lose my insurance — which covers my wife and three young daughters — yet again as early as January 2017.

As health care expert Grace-Marie Turner notes:

The Obama administration has published final regulations that “will make it impossible to offer HSA-qualified plans in the future” in the ACA exchanges, according to HSA expert Roy Ramthun.

The Department of Health and Human Services published final regulations last month that will make it virtually impossible for plans offered in the exchanges to comply with both HSA and ACA rules.

The new rule governs the “standard benefit designs” for Bronze, Silver and Gold plans in the exchanges.  According to Ramthun’s analysis, the new rules mean that 1) the specified deductibles for the plans and out-of-pocket limits to be offered in the exchanges will be outside the requirements for HSA-qualifying plans, and 2) plans will have to cover services below the deductible which are not allowed under the legal definition of HSAs.

Ramthun believes it is unlikely any HSA plans will be offered in the exchanges in 2017 as a result.

I see ObamaCare as being quite similar to the housing market/US economy circa early 2007 (as portrayed in The Big Short for example). It is clear that something is wrong and the system is not sustainable, but no one knows when it will collapse. Clearly, ObamaCare is NOT working as promised. It is “covering” people primarily through the costly and ineffective Medicaid program.

It may take awhile to utterly collapse (and who knows what will happen then), but it is coming.

Rep. Lujan-Grisham wants to “get creative” in the areas of job creation and economic development per a recent article in the Albuquerque Journal. I’m a sucker for headlines like that because I always hope someone writing in the paper actually has a creative idea. Unfortunately, I was sorely disappointed in Rep. Lujan-Grisham who has supported common-sense economic policies, despite partisan opposition from liberal members of her own delegation.

So, what’s Lujan-Grisham’s “big” idea? Get a better contract written to encourage contracts flow to businesses in New Mexico. Yep, that’s really about it.

It would be one thing to be disappointed if Lujan-Grisham were going to stay in Washington, DC, but the rumor mill places her among the likely Democrats running for Governor. She has previously opposed “right to work” legislation for New Mexico. “Right to work” and other pro-market reforms have a far-greater likelihood (and track record) of succeeding in helping New Mexico generate jobs than yet another effort to “leverage” federal dollars (an effort that has been made continuously in our State for decades).