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Understanding the Rio Grande Foundation

The Rio Grande Foundation often comes under criticism from the left. But sometimes we come under fire from the right as well.

For starters we are designated as 501c3 “education and research” think tank. We don’t make endorsements and we don’t “carry water” for any political party or politician. Various media outlets have called us libertarian, conservative, and free market. We call ourselves “free market,” but we don’t waste our breath and time arguing the finer points of ideology because we believe that our work is self-explanatory.

For starters, New Mexico is a deeply challenged state. We believe that a vast majority of these issues are self-inflicted. New Mexico lacks economic freedom and remains poorer and less well educated than our neighbors. We also spend a VAST majority of our time focused on state and local issues as opposed to federal ones.

Those issues broadly include:

  1. Size of Government: New Mexico has long been a state driven by government. Data show that state/local spending is too high and that government regulations make doing business in New Mexico less attractive than doing business elsewhere. We’ve worked on this issue from all angles including: all forms of taxation, subsidies and corporate welfare (notably film subsidies), but also LEDA, JTIP, and “green” subsidies.
  2. Regulation: Rio Grande Foundation has led the charge for “right to work” repeal of NM’s”Davis-Bacon” law, reform of government employee pensions, and against numerous “nanny state” regulations like plastic bag bans. We have also done extensive work against “green” programs from the Energy Transition Act to costly “green” building codes.
  3.   School Choice/Education Reform: Across the political spectrum New Mexicans agree that our K-12 system is failing. While politicians of both parties typically opt for some combination of more money, more time in school (pre-K), and some form of top-down accountability, the Rio Grande Foundation believes that parents and (to an extent students themselves) are better able to decide on the educational options that appeal to them. Charter schools are a good start and should be expanded, but more options are needed.

Additionally, the Rio Grande Foundation supports the US and New Mexico Constitutions, we stand up for free speech, gun rights, private property, and open government.

We don’t take on immigration, gay rights, or abortion issues.

So, there you have it. We at the Rio Grande Foundation have our plates very full, but we are making a difference in New Mexico every day. If that appeals to you, please consider making a tax-deductible donation today!

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New Mexico’s legislative defenders of Freedom

Who in the Legislature voted in favor of freedom and personal responsibility in 2020? We tracked it all on our Freedom Index and you can find out for yourself by clicking the link and plugging in your address (if you don’t already know who your legislators are). While 2020 was another tough year in terms of government spending and taking our freedoms, here are a few of the points of light in the Legislature. We’ll be highlighting a few of the best and worst from this session in the days ahead.

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The 2020 Freedom Index Results are out! How did your legislators fare on freedom?

The Rio Grande Foundation’s vote tracking tool, the Freedom Index, has been available all throughout the 2020 legislative session with bills ranked and legislators’ votes scored in what amounts to “real time.”

At the Rio Grande Foundation website you can access bill rankings and votes going back to the 2015 session. Click the logo below to find out who your legislators are (if you don’t know already) and for the 2020 Index and votes.

Bills are rated anywhere from -8 (worst bills) to +8 (for the very best). Some of the most important bills that made it to the floor of at least one house of the Legislature for a vote and their respective ratings and a short description are found below:

SB 5; -7 (worst of the session): Red Flag Bill infringes on gun rights, due process, and creates new opportunities for costly lawsuits against local governments;

HB 364; -6 Public Employee Give away

HB 83; -6 Creates new $320 million fund for early childhood

HJR 1; -5 Taps the Land Grant Permanent Fund for pre-K and early childhood programs

SB 98; -4 Changes New Mexico’s Davis Bacon (prevailing wage) law to provide costly new fines and penalties for businesses working on public works projects

Best Bills Passed

SB 72; +6 Makes changes to PERA pension system to bring it closer to full funding.

SB 96, +3 Increases school budget transparency

A few notes about this year’s scores:

Rep. Larry Scott (R-Hobbs) had the top overall score of +104.

Sen. Mary Kay Papen (D-Doña Ana) had the lowest overall score of -72.

Other top scorers include: Rep. Schmedes, +86, Rep. Candy Ezzell +83, Rep. Rod Montoya and Rep. James Townsend +82, and Rep. Jane Powdrell +80.

The highest scoring Senator was Bill Sharer +42.

Rep. Candy Sweetser was the top scoring Democrat at +6.

How did YOUR legislators vote? Check the index and tell them what you think of their voting record.

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Opinion article: “Free” College Proposal Raises Serious Questions

The following article appeared in several New Mexico news outlets on September 30, 2019 including the Las Cruces Sun-News.

Gov. Lujan Grisham has put forth a plan (set for debate and possible approval in the 2020 Legislature) for “free” college for New Mexico residents. For many families this may seem like an unadulterated good thing. And, as the parent of three who is pondering (and already saving for) the college educations of his three children, I totally understand that reaction.

But, from the viewpoint of an economist or even someone who is simply concerned about New Mexico’s future, there are several serious problems with this proposal.

Currently, the Governor and Legislature are salivating at the prospect of a $900+ million surplus in 2020. That number may be even higher due to the recent uptick in oil prices. The plan is for “free” college to cost “just” $25-$35 million annually. Unfortunately, we have nothing from the Lujan Grisham Administration to justify that cost. Given the tendency of government officials to underestimate the cost of new programs (the Rail Runner and Spaceport come to mind) it would seem that the real cost even at the beginning will be much higher.

Worse, unless some cost restraints are included in this legislation, colleges and universities located in New Mexico will have no incentive to constrain costs. On the contrary, they have every incentive to grow their bureaucracies and increase spending dramatically.

Another big problem with the proposal is New Mexico’s low-performing K-12 system. By nearly all indicators New Mexico’s students in K-12 are among the lowest academic performers in the nation. Is higher education really the problem when the K-12 system is failing?

It’s worth noting here that according to the State Higher Education Executive Officers Association (SHEEO) 2018 report on higher education finance, New Mexico already spends 2nd most in the nation (as a percent of income) on higher education. If higher education spending is such a great “investment” for New Mexico, why do we remain one of the poorest and slowest-growing states in the nation (albeit with somewhat better numbers due to the Permian oil boom).

The fact that New Mexico’s already large investment in higher education hasn’t done much for our economy begs the next question: “Will there be jobs available for these expected graduates or are we training future workers in Texas, Arizona, Colorado, and other faster-growing, more economically-diversified states?”

If the Gov. does take substantive action to reform New Mexico’s economy by reforming the gross receipts tax and generally taking action to make New Mexico more economically dynamic and attractive, perhaps then we can keep more of these young, educated people in the State. However, the University of New Mexico’s falling enrollment and available population data indicate that New Mexico is losing its “best and brightest.”

Finally, as if all of these arguments are not enough, it is notable that “free college” is “regressive” in the sense that a vast majority of the benefits will go to people of higher incomes. Currently, 27% of New Mexicans have four year college degrees. Generally-speaking it is the middle and upper classes that can attain that level of education.

While the Governor’s plan may open the path to a few more needy students, how many of the bottom 25% of income earning students in the State can take the time to go to college? How many of them are academically-capable? While a middle-to-upper class parent of three stands to achieve a veritable windfall from “free” college, it is hard to align this with principles of tax fairness and “progressive” policies so in vogue in Santa Fe.

These are just some of the many problems with the plan. Hopefully the Legislature instead considers some of the many ways to improve K-12 education in New Mexico and engage in much-needed economic reforms that will make our State more prosperous and thus attractive for young workers from all walks of life.

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.

 

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Discussing the Gov’s plan for “free” college on KOB TV Channel 4

Rio Grande Foundation president Paul Gessing sat down with KOB TV to discuss the plan for “free” college. You can check out the story below. As of Thursday afternoon, September 26, we have not received any details in terms of the estimated $25-$35 million price tag for the plan.

That said, regardless of the estimated starting price tag, there are numerous problems with this plan. I discuss a few of them in the story. More concerns are outlined here.

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RGF provides comment for KOAT 7 Albuquerque Public Schools bond story

Albuquerque area voters will be asked to vote this November on a $290 million bond measure for APS. KOAT Channel 7 did a story in which they talked to APS about the real issues at some local schools and the District’s mismanagement of those facilities.

Although many of my remarks did not make the story, the District has not fundamentally changed the way it does business. It has not called for reform of New Mexico’s costly Davis-Bacon law, they have not closed any surplus schools (due to the District’s plummeting student population), and they have not considered cost saving measures like abandonment of LEED Standards or modular construction.

 

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No Need for New Permanent Fund in New Mexico

The following appeared in the Las Cruces Sun-News on September 15. While there are a number of bad ideas being put forth in Santa Fe to use a portion of the oil and gas surplus, the idea of creating a new permanent fund

Budget analysts in New Mexico expect the Legislature will have an incredible $907 million of so-called “new money” when they convene in January. A vast majority of that money comes from the boom in oil and gas production in the Permian Basin.

With nearly $8 billion available in 2020, the general fund budget will be up nearly 27% over just two years. Even fans of bigger government have to be concerned about the rapid rate of government expansion in such a short period of time.

What should be done to solve this very nice problem to have?

Recently, some, including powerful Finance Committee Chairman Sen. John-Arthur Smith, discussed the creation of another New Mexico permanent fund, this one to finance early childhood programs. Smith’s support is noteworthy for two reasons. The powerful Finance Committee’s approval would be required for such a fund. And, of course, Smith has long stood in the way of efforts to tap the Land Grant Permanent Fund to finance a new pre-K/early childhood programs. Smith’s approval of a new fund would move it a long way toward adoption.

Would such a fund be a good idea for New Mexico? Permanent funds (be it the $20 billion Land Grant fund or the somewhat smaller Severance Tax fund) are also known as “sovereign wealth funds.” By definition these funds involve governments investing in businesses and other tools meant to generate a rate of return.

We should all be concerned about government investing in big business. But, the most important reason is that it makes government less accountable to the people.

How? Normally, if government needs to raise money from taxpayers, it has to work to please taxpayers and convince them to pay taxes and possibly pay even more taxes if revenues are inadequate. But when government entities are given dedicated revenue streams (without much legislative oversight or a need to show relevance), who is there to keep them accountable or demand changes as technologies and conditions evolve?

The Land Grant Fund has numerous beneficiaries that receive millions of dollars annually from the fund. A vast majority of that money goes to K-12 and higher education, but New Mexico’s Schools for the Blind/Deaf, the Boys’ School, the Miners Hospital of New Mexico, and State Hospital are all mandated to receive money from the Permanent Fund each year regardless of what is needed and with little outside oversight.

We are not criticizing any of these programs, but merely pointing out that permanent funds further reduce the already-limited ability for citizens and elected officials to impose accountability and oversight. The best means of providing accountability involves individuals in a competitive free market using their own hard-earned money to pay for goods and services. This is why the best use of the impending surplus would be to return it to the citizens of New Mexico.

If government must come in to play, at least legislators and the annual appropriations process combined with elections offer better oversight than would another permanent fund.

Instead of creating yet another avenue for government spending, we continue to advocate for long-overdue reform of New Mexico’s job-killing gross receipts tax. These reforms don’t necessarily mean big revenue cuts for government, but the available money can act as a cushion against revenue uncertainty as changes are adopted.

Once that is done the Legislature should consider returning a significant portion of this surplus to the people of New Mexico. Ideally this would be in the form of tax cuts, but even one-time rebate checks would be a welcome boon to the bottom lines of New Mexico families.

New Mexico needs to diversify and strengthen its economy and this can best be done through tax reform. Another spending binge (whether that’s done through the current budget process or creation of another “permanent fund”) is not what we need.

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

 

 

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NM spends 2nd most in nation on higher education ALREADY

With Gov. Lujan-Grisham having proposed “free” college, it is worth noting that New Mexico already spends more per $1,000 of personal income than any other state in the nation beside Wyoming.

What results have those dollars generated? Will “free” college make a big difference in those economic and educational outcomes?

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RGF president comments on “free college” for KOAT TV story

There are any number of reasons to be concerned about Gov. Lujan-Grisham’s plans to make higher education “free” for New Mexico students. I shared some reasons in my recent interview with KOAT TV. 

This interview was conducted via Skype from Roswell, NM!

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KRWG logo

The following appeared at KRWG.org on August 29, 2019.

Like all New Mexicans, we at the Rio Grande Foundation want to see an improved K-12 system in place. I have two daughters in traditional public school. While concerned about the quick turnover at the top of the PED, we are optimistic about the hiring of Dr. Ryan Stewart.

Stewart comes to us from the Philadelphia area where he worked with an education reform organization called Partners in School Innovation. According to news reports he is relatively young (38) but has impeccable credentials (degrees from Stanford and Harvard).

The Albuquerque Journal reports that he has a 9 year old son. This is notably mainly because the son attends a “private Quaker school” in Philadelphia. In other words, Stewart and his family are financially in a position to pursue his own form of “school choice.” His “choice” is one that would be beyond the financial capability of most New Mexicans. The Rio Grande Foundation found three different Quaker schools in Philadelphia ranging in annual tuition from $16,000 to $30,000.

We don’t begrudge him the ability to make the best decision for his child, but it is important that a child’s access to a quality education not be determined by parental incomes or the ability to move into a wealthy school district. Thus, we have long advocated for and supported choice whether that is in the form of charters, private, home, virtual, or other forms of schooling. And, according to new polling data from the University of Chicago, school choice is especially popular with African-Americans and Hispanics.

Unfortunately, “choice” is not so popular for many who have direct stake in the status quo. This attitude is especially prevalent among the unions who so strongly support his boss, Gov. Lujan-Grisham. They don’t want competition. They advocate for ever more money to be poured into the same broken education system that has proven so difficult to turn around.

Of course, the unions and others fail to acknowledge that according to the most recent US Census Bureau data, New Mexico spends more than any of our neighbors on K-12 education, but our results are worse. That data does not include the recent legislative session during which more money was been poured into the system and the previous administration’s accountability regime were been pushed aside.

New Mexico’s school choice options primarily consist of publicly-funded charter schools which faced the threat of a moratorium from Democrats in the Legislature in 2019 and home schooling which can be undertaken by anyone with the time and wherewithal to manage a child’s education at home.

New Mexico can and should offer private school choice options, especially tax credits and other options. These programs could specifically be targeted to assisting children from needy families or who go to school at low performing schools. In the recent past such legislation has been put forth on a non-partisan basis, but those efforts have consistently and stridently been opposed by the unions and thus killed.

We look forward to Dr. Stewart getting started in New Mexico. We know our education remains deeply challenged and that it is in need of aggressive and courageous leadership. With the recent influx of new spending, the argument that spending is“inadequate” is not going to cut it. New Mexicans expect improved results.

Welcome Dr. Stewart and good luck, my daughters and thousands of New Mexico children are counting on you!

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.

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