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Solutions for New Mexico’s medical provider shortage: part 2 of the two part series

New Mexico has a shortage of medical providers across most practice areas (as discussed in Part 1 of this series). So, as the 2023 legislative session gets rolling, what can be done about it?

The Rio Grande Foundation has looked high and low throughout New Mexico laws impacting medical providers and has produced a series of recommendations laid out in an extensive policy paper.

1) While forward looking in nature, HB 75 passed in 2021 and was revised later on that same year makes New Mexico’s medical malpractice much more plaintiff and attorney friendly through the increase in damage award caps is  causing a great deal of concern among providers even though it will not be implemented until 2024;

2) Stop taxing medical providers via gross receipts tax. The State is one of the few states in the entire nation that levies the equivalent of a “sales” tax on certain medical services. In New Mexico’s largest city, Albuquerque, the rate of taxation is currently 7.75 percent. Rates tend to be even higher in outlying areas of New Mexico. This could be part of a broad reform or more targeted.

3) Reduce Medicaid dependency.  According to the American Hospital Association, Medicaid underpaid hospitals by $24.8 billion in 2020. For Medicaid, hospitals received payment of only 88 cents for every dollar spent by hospitals caring for Medicaid patients in 2020. In 2020, 62 percent of hospitals received Medicaid payments less than cost.

4) Expand scope of practice/telemedicine.

There are several additional ideas outlined in the report along with more detailed discussion of the ideas listed above. All of it can be found here.

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A decade in, LFC Medicaid report highlights program failures

The following appeared in the Las Cruces Sun News on Sunday, January 22nd, 2023.

LAS CRUCES SUN-NEWS - Downtown Las Cruces Partnership

In December the Legislative Finance Committee (LFC) published a report on New Mexico’s Medicaid program. Whether by design or accident, the report happened to coincide with the 10th anniversary of New Mexico’s Medicaid expansion. Then-Gov. Susana Martinez decided to accept the “ObamaCare” expansion dollars which, at the time, was 100% federally funded.

The LFC report is full of great information, but it doesn’t attempt to assess whether Medicaid expansion was worthwhile. Unfortunately, when it comes to government programs (especially here in New Mexico) increased spending and good intentions are not often followed by thoughtful assessment of whether the spending has achieved stated goals. Even less common are analyses of whether the new program itself was cost-effective in achieving those goals.

The media covered the LFC’s report which focused mostly on difficulties the Committee’s “secret shoppers” had in making appointments with doctors for Medicaid patients. For example, the LFC found that only 15 percent were able to make an appointment with a primary care doctor. Other doctors were not accepting patients, failed to return phone calls, or were no longer at that phone number. These findings highlight an important problem with Medicaid: having “coverage” (especially from a government welfare program) doesn’t mean you have access to medical care.

Less prominent in the news reports was the fact that the LFC reported that an astonishing 47 percent of all New Mexicans are on the program and a positively mind-blowing 77 percent of births are on Medicaid.

Ample reporting has been done about New Mexico’s medical provider shortage. While there are many reasons for that shortage, our State’s massive Medicaid population and the program’s low reimbursement rates for providers are certainly factors. Any doctor will share their views on the challenges of serving large numbers of Medicaid patients.

New Mexico’s extraordinarily high number of Medicaid recipients is at least partially to blame for the State’s low workforce participation rate. The LFC itself has noted that Medicaid and other government welfare programs, “can disincentivize work through either excessive benefits or reduction of benefits as recipient wages increase.”

Furthermore, the LFC report notes that Medicaid is the largest healthcare payer in New Mexico, and the state has the largest Medicaid program per capita in the country. Between FY19 and FY23, HSD projects total Medicaid spending to increase approximately 56 percent from $5.6 billion to $8.8 billion. In other words, by next fiscal year Medicaid alone will be spending more than New Mexico’s current General Fund budget.

Sadly, the LFC did not take up a detailed discussion of health care outcomes and the impact (or lack thereof) of Medicaid expansion. The LFC did note that, “the state continues to face poor health outcomes overall.” And, even more interestingly, while providing routine medical care for the poor was a stated goal of advocates for expansion, the LFC notes that “Emergency room visits for non-urgent reasons have increased, potentially leading to worse outcomes.”

After a decade of massive federal and state spending growth on Medicaid the LFC does not point to significant positive health care outcomes from Medicaid expansion for New Mexico’s population at large. Given the incredible impact this program has on state and federal budgets, it would be nice to know whether Medicaid expansion is having a positive impact or not. The LFC didn’t even mention the lack of evidence on health outcomes much less call for such research or upbraid the legislature for failing to conduct it already.

The largest and most expensive expansion of the American welfare state in the last 50 years seems to have resulted in bigger government and more government dependency. However, here in New Mexico with the highest percentage of people on Medicaid, evidence of improved health outcomes remains elusive.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is 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

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MLG delays bringing state employees back to the office: RGF comments on KOAT Channel 7

In the wake of an LFC report stating that New Mexico taxpayers are spending $18 million annually on unused office space, Gov. Lujan Grisham (after the election) decided to require that all state employees return to their offices by the star of 2023.

According to news reports, however, the Gov. has rescinded that requirement. Employees will be required to return NEXT month at the start of February. This is another case of poor leadership from the Gov. COVID (and remote work) has been going on for nearly 3 years now. The Gov. and her team should have figured out who needs to be in the office 5 days a week and who doesn’t (and how to manage them effectively) by now.

Could some state buildings be shuttered and sold off? Should the locations of gov’t buildings be shifted to reduce commute times? How can we make sure remote employees are actually doing their work?

These aren’t easy questions, but they should have been answered long ago. RGF’s Paul Gessing appeared in a story on KOAT Channel 7 to discuss the issue. You can find his segment here and below and the first portion here.

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Published opinion piece: Use surplus strategically to solve long-term problems

The following appeared in the Santa Fe New Mexican on December 24, 2022 and in numerous other news sources.

As the State’s Permian oil production boom continues in New Mexico the budget surpluses available to legislators each session grow as well. The latest announced budget surplus is $3.6 billion which is a positively mind-blowing 43 percent. This surplus is on top of already dramatic spending growth of 30 percent during the first four years of the Lujan Grisham Administration.

More spending growth this year is to be expected, but the capacity for government to continue expanding after years of rapid growth is somewhat limited by the ability of government to manage existing resources available to it. This is not surprising since New Mexico’s state and local government is already among the very largest in the nation.

But I’m not here to rail about the size of New Mexico government (at least not this time). Rather, I’m here to remind legislators of both parties that such massive surpluses present rare opportunities to lead our State to a better future.

Gov. Lujan Grisham has already proposed rebates of $750 or $1,500 for New Mexicans depending on marital status. Rebates are a bi-partisan idea, one supported in the recent campaign by her Republican opponent Mark Ronchetti, though details differed. To be clear the Rio Grande Foundation does not oppose tax rebates if they are not an excuse to (yet again) punt on long-overdue tax reform. Returning a portion of the budget surplus is not going to move New Mexico’s economy forward and diversify it in the same way as long-overdue tax reform would.

The same can be said for an idea that often garners bipartisan support in Santa Fe: that is bolstering various permanent and “rainy day” funds. Quite honestly, New Mexico has numerous big problems facing it. There is no better time to address these problems than right now. If policymakers use the surplus to diversify and improve the State’s economy in ways that will make it more competitive with its neighbors, the well-being of future New Mexicans won’t be so contingent on the vagaries of oil and gas.

New Mexico’s litany of current economic challenges includes:

  • A low workforce participation rate that has historically lagged behind our neighbors and remains well below pre-pandemic levels and has even dropped in recent months;
  • Poverty rates that are among the very highest in the nation;
  • A medical provider shortage that, while driven in part by regulations is worsened by gross receipts taxation of medical practitioners including Medicaid services;
  • Lack of economic diversity in a state that relies heavily on oil and gas for money and government (federal, state, and local) for employment opportunities;
  • Water and other infrastructure issues.

These problems (and more) can at least partially be solved by using New Mexico’s financial largesse wisely. New Mexico policymakers have long focused on government-driven approaches to these problems. State and local government spends a very high percentage of the economy.

Majority Democrats have an opportunity to not only pump more funding into their priorities, but they could show that they are pro-business and interested in using oil and gas revenues to diversify the State economy for a time when the oil and gas industry isn’t as bullish.

Republicans, rather than leaving the bold ideas to Democrats, should offer their own serious reform ideas and bills in the upcoming session. Ideally, the minority GOP could influence Democrats toward a more pro-growth agenda. Worst case, in two years they can point to their detailed policy ideas and use them to challenge Democrats for failing to take advantage of this unique opportunity.

Regardless of your political affiliation or beliefs we all must realize that 43 percent budget surpluses don’t come around often. We can’t solve all of New Mexico’s problems even with this massive surplus, but with strategic moves like those outlined here we can certainly move the needle.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is 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

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RGF leads coalition in opposition to proposed Biden Administration Crew Size Rule

The Rio Grande Foundation recently led a diverse coalition of 19 state policy think tanks in submitting comments in opposition to the Federal Railroad Administration’s (FRA) proposed Train Crew Size Safety Requirements Rule (Docket Number FRA20210032;RIN 2130AC88). You can find the comments here.

As employers across the nation struggle to find enough employees, the Biden Administration wishes to impose a 2 person crew size mandate on railroads. In 2016, the FRA stated that it could not “provide reliable or conclusive statistical data to suggest whether oneperson crew operations are generally safer or less safe than multipleperson crew operations.” And, in 2019, the FRA concluded that, “Accident/incident data does not support a train crew staffing regulation.”

As the letter states:

The proposed rule also ignores technological advances in rail safety made in recent years, including Positive Train Control (PTC). PTC is now operating on tens of thousands of miles of rail line across the country, tracking speed restrictions on a given portion of track, as well as signals and communications, while preventing human error. PTC’s safety advances make it unnecessary for two crew members to be present in the cab of the train.

This proposed rule fails to account for these technological innovations, as well as the safety record of many railroads, including thousands of Amtrak and commuter passenger trains that operate with only one crew member in the train cab.

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Rio Grande Foundation provides public comment in support of “gig” jobs

The Biden Administration has made its contempt for the so-called “gig” economy clear. The Administration has proposed multiple rules which would force those workers into “employee” status even though being an Uber driver (for example) simply doesn’t fit nicely into that type of employment status.

The Rio Grande Foundation provided public comment in opposition to the following two Biden Administration rules which would force workers into these unnecessary and absurd boxes. You can click on our comments below:

1. National Labor Relations Board RIN 3142-AA21, “Standard for Determining Joint-Employer Status.” Comments Due December 7, 2022.

2. Department of Labor, Wage and Hour Division, RIN 1235-AAA3, “Employee or Independent Contractor Classification Under the Fair Labor Standards Act,”
Comments Due December 14, 2022.

Millions of workers nationwide enjoy the freedom of the “gig” economy while also providing useful services to even larger numbers of Americans. The Biden Administration’s attacks would be harmful to workers and American consumers alike.

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Legislature blessed with $3.6 billion in “new” money in upcoming session

According to the latest news reports New Mexico has a mind-blowing $3.6 billion budget surplus available to it when the Legislature convenes in January. This is, of course, derived largely from a production-driven boom in New Mexico’s oil and gas industry. Between now and January we and others will have plenty of time to discuss potential uses for the money. For now we’d like to simply help people grapple with the sheer size of this surplus.

  1. The budget surplus alone is a mind-blowing 43% of the current $8.4 billion budget which is in itself a 30% bigger budget than when Susana Martinez left office.
  2. The budget surplus alone is virtually the same size as the FY23 (current year) K-12 budget ($3.8 billion) which is a 41% increase over 5 years.
  3. The budget surplus is more than 7X the State’s “public safety” budget and 3.5X the entire higher education budget.
  4. The State could ELIMINATE the entire gross receipts tax ($3.047 billion) for FY 2024 and still have nearly $600 million left over.
  5. The State could ELIMINATE ALL personal and corporate income taxes ($2.107 billion for FY 2024 and still have $1.5 billion left over.

What WILL happen is anybody’s guess. With New Mexico’s continued economic struggles there are plenty of opportunities for the type of pro-growth tax reform the State sorely needs.

As a quick reminder, New Mexico’s state and local spending is already tops in the nation according to the website US Government Spending:

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Several questions for NM’s Blue Majority (and one for the Red Minority)

The following article appeared in Las Cruces Sun-News on November 27, 2022.

This Election Day a majority of New Mexico voters seemingly ignored the State’s manifest failures of governance. Instead, voters prioritized abortion rights while penalizing anyone who could plausibly be painted as “election deniers.”

Thus, New Mexico, one of America’s “bluest” states for decades, became even more Democrat dominant. Democrats now control every office of significance in State government as well as all five seats in Congress.

Whether the results are a sign of satisfaction with the status quo or just animus towards Republicans, the fact is that New Mexico’s governing Democrats faces serious challenges. Here are some that need to be addressed in the next few months:

  1. PNM (the State’s largest utility) has repeatedly expressed concerns about having enough electricity during the summer of 2022. The San Juan Generating Station coal plant was allowed to continue operating for an additional three months during this past summer due to fears of blackouts and brownouts. That will not be an option next summer. In fact, there has been little improvement in New Mexico’s electricity supply situation since then. What will the Gov., her new PRC, and the Legislature do to keep the lights on for New Mexicans? Waiting until the heat of next summer is not an option. Decisions need to be made right away.
  2. Speaking of the PRC, the Gov. now has a chance to mold New Mexico’s powerful regulatory body into something of her choosing. Will she prioritize geographical and ideological diversity or make the body a rubber stamp for her California-style policies? And, will they push through the Avangrid/PNM merger (rejected by the elected PRC but supported by the Gov.) as one of their first acts?
  3. New Mexico is one of just 11 states still in a COVID 19 emergency. It has been in a an “emergency” since March of 2020 (more than 2.5 years at this point). Will the new Legislature demand a “seat at the table” or continue to allow the Gov. to keep control until she sees fit? What does this mean for “democracy?”
  4. Voters approved Amendment 1 which taps into New Mexico’s permanent fund to boost education spending. With an expected $2.5 billion surplus, education spending is likely to rise even further. The State’s recent NAEP scores placed New Mexico at the very bottom across all four grade levels and subjects tested. Will New Mexico simply continue increasing education spending or will needed reforms be enacted?
  5. Speaking of that budget surplus, the Gov. and Legislature undertook a series of tax cuts in the 2022 session in anticipation of the election. Can New Mexico taxpayers expect further tax relief? If so, will those tax cuts be superficial, or will they address the State’s knotty economic challenges like “pyramiding” of the gross receipts tax?

Most of these questions are for New Mexico’s (even more) ascendent Democrat majority, but there is one question for the GOP: what can be done to boost voter turnout (and overall political engagement) in New Mexico’s most conservative areas? Overall voter turnout was 52 percent. In liberal Santa Fe County that number was over 63 percent. But, in conservative bastions like Lea, Eddy, Chaves, San Juan, Otero, Curry, and Roosevelt counties, turnout lagged the statewide average, sometimes by double-digit margins.

Many conservatives feel like their vote doesn’t make a difference either due to the State’s “blue” status or allegations of election fraud. Either way, New Mexico’s GOP must figure out how to engage its base through grassroots activism to become relevant.

No matter which side of the aisle you’re on, New Mexicans of all political stripes face more questions than answers.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is 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

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RGF talks to KOAT Channel 7: City Taxpayers have spent $1 million on field transformations

The Rio Grande Foundation worked hard to make sure that City taxpayers didn’t have to foot the cost of a soccer-only stadium for the New Mexico United soccer team.

But, as KOAT Channel 7 notes in a recent story in which RGF’s president was interviewed, local taxpayers are STILL on the hook for expenses associated with the soccer team. In this case according to recent data requested by KOAT taxpayers have spent $960,000 since the United started playing games.

Is this better than building a brand new stadium? Yes. Has City Council ever voted on this? No. It would seem that at the very least our elected officials should be voting on this. Americans and New Mexicans are often asked to subsidize sports franchises, but that doesn’t make it right.

 

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New Mexico remains among “Least Free” US states in latest Index of Economic Freedom

The 2022 edition of the Canada-based Fraser Institute’s Economic Freedom of North America 2022 is out and for yet another year New Mexico remains at the very bottom among US states in terms of economic freedom. Economic freedom is the ability of individuals to make their own economic decisions
about what to buy, where to work and whether to start a business.

Unsurprisingly, New Mexico performed particularly poorly in:

  • Government spending as a percent of personal income (49th);
  • Sales tax revenue as a percent of personal income (48th); and
  • Government employees as a percent of overall employees (49th).

New Mexico DID get high marks for having relatively low property taxes (7th).

“When governments allow markets to decide what’s produced, how it’s produced and how much is produced, citizens enjoy greater levels of economic freedom,” said Fred McMahon, the Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute and co-author of this year’s report, which measures government spending, taxation and labor market restrictions using data from 2020, the latest year of available comparable data. Florida was the top performing state in the index followed by New Hampshire. Rounding out the top five freest states are South Dakota (3rd), Texas and Tennessee (tied for 4th ).

The very worst performing states were New York at 50th followed by California.