At the Rio Grande Foundation we TRY to be positive. Sure, we point out problems, but we also put forth positive reforms that could make a difference for New Mexico’s struggling economy. But challenges are growing and I don’t see policymakers stepping up.
For example, construction is a major economic factor. The Associated Builders and Contractors have ranked New Mexico’s construction climate 50th in the nation. As bad as that is, it is made all the more painful by the fact that in Colorado they are complaining about TOO LOW rates of unemployment in construction while New Mexico’s rate is the 2nd-highest in the nation, FOUR TIMES the rate of Colorado.
But if there are any guarantees about the liberal takeover of the New Mexico Legislature, opposition to “right to work” and repeal of New Mexico’s “prevailing wage” laws may be the most ironclad “non-starters” in Santa Fe these days.
High unemployment means few jobs and few people paying taxes. The positively shocking outcome of that is, as the Legislative Finance Committee noted in its November newsletter: there was a 30 percent drop in general fund balances between October 2015 and October 2016.
Check out the chart below which shows how New Mexico’s revenue situation has worsened dramatically since January of 2016. That is of course when oil prices began their steep decline, but we at the Rio Grande Foundation have been talking for years about our State’s over-reliance on the federal government and oil and gas industries.
The Democrats who recently took over in Santa Fe are eager to raise taxes, but you can’t squeeze blood from a turnip. The productive folks that have remained in New Mexico will just accelerate their migration out of state.