Category: Energy and Environment

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Opinion piece: Governor’s Disdain For Democracy Nothing New

The following appeared in Las Cruces Sun-News on September 15, 2023 and in other papers across New Mexico.

New Mexico Gov. Michelle Lujan Grisham recently gained national headlines for her public health order which essentially banned carrying a gun in Bernalillo County, the State’s largest county by population. Her justification for this dramatic action was a recent shooting outside Isotopes Park, but residents of Bernalillo County and Albuquerque face and have faced these issues for years.

Each time a criminal uses a gun to kill or steal it is frustrating and sad event. Both the causes and solutions are complicated and controversial. No matter the crisis one person (including the Gov.) cannot simply suspend the rule of law and the US Constitution.

Many New Mexicans like me believe Albuquerque’s crime problem is the result of weak leadership at multiple levels: The City fails to enforce the law, Department of Justice policies further hamstring the police, “catch and release” judges that voters (sadly) keep electing, and an unwillingness of the Gov. and Legislature to pass laws addressing our serious crime problems. And those are just the public policy failures, not the societal ones.

Many New Mexicans carry guns in response to the threat of violence they face.

Any attempt to deal with crime needs to involve the Legislature and other State and local elected officials. This would be true even if New Mexico had Republicans in positions of political power which they don’t.

Sadly, Lujan Grisham is only taking the next logical step in accumulating political power to herself. Declaring a “health emergency” and then making all manner of policies regarding school and business openings as well as vaccines and masks with little public input or say-so was her approach during COVID.

Sadly, the same Democrats who run the Legislature and who failed to pass basic restrictions on the Gov.’s COVID powers (like a 45-day limit on her emergency powers) remain largely unwilling to address the Gov.’s latest overreach on guns (Sen. Joe Cervantes is one notable exception as he has spoken out in opposition).

This is not just about guns. Lujan Grisham has exhibited a pattern of taking powers whether they are hers to use or not. She is currently working through an unelected Environmental Improvement Board, not the elected Legislature, to impose drastic new mandates that will soon require 82% of vehicles sold in New Mexico to be electric.

Occasionally the Gov.’s anti-Democracy tactics are on seemingly minor issues. Back in the 2022 special session of the Legislature the Gov. requested $1 million to reduce fees on the struggling New Mexico Rail Runner Express. The funds were not allocated by the Legislature, but the Gov. decided to cut fares anyway on her own.

Gov. Lujan Grisham may or may not have a political future beyond the remainder of her current term of office. Despite impeachment proceedings that have been filed by the GOP, we will likely be stuck with this Gov. until her term expires the end of 2026 when her term expires.

But the entire Legislature is up next November. And when they are running for office, one of the very first questions voters need to ask them is what they will do to hold the Gov. accountable when she ignores the law.

They should start by speaking clearly and publicly in opposition to her “gun grab” and then they should enact limits on the duration and scope of executive power in public health emergencies.

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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Economy Energy and Environment Notable News Oil & Gas Top Issues Transportation

Numerous specific issues with electric vehicles and especially government mandating them

MLG’s plan to push an electric vehicle mandate through the Environmental Improvement Board is kicking into gear. The Board is expected to begin deliberation on ramping up New Mexico’s EV mandate to 43% by 2027 and 82% by 2032 on November 15.

This is a DEEPLY flawed policy that Rio Grande Foundation will be working hard to stop. Here is a fairly comprehensive list of the many reasons why EV mandates are harmful:

Ultimately, EV’s may or may not be a good replacement technology for the internal combustion engine. But, government through mandates and extensive subsidies should not be the final arbiter of this choice. That should fall to consumers. Sadly, Gov. Lujan Grisham has joined the EV bandwagon at the expense of personal freedom.

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Economy Energy and Environment Issues Notable News Top Issues Transportation

RGF leads major coalition effort highlighting problems with Railway Safety Act

The Rio Grande Foundation, alongside the Washington-based Competitive Enterprise Institute have led a coalition letter (available here) of state-based and national free market organizations and leaders in expressing serious concerns about provisions contained in the “Railway Safety Act,” (S. 576) which is now moving through Congress.

Among the numerous issues with the bill is its arbitrary 2 person crew mandate;

A massive new regulatory burden (imposed absent any cost-benefit analysis) on movement of hazardous materials;

Enshrinement of mandates for trackside detectors and other technologies that locks  a single technology into law. When government does this the public suffers as industry lacks the flexibility or incentive to pursue next-generation technologies.

Among the more than three dozen signatories of the letter are:

Hon. Kenneth “Ken” Cuccinelli II
Former VA Attorney General, Former Acting Deputy Secretary of Homeland Security

Steve Forbes
Chairman and Editor-in-Chief Forbes Media

David R. Henderson
Research Fellow
Hoover Institution, Stanford University

 

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National Review Capital Matters opinion piece: New Mexico Wins the Lottery

The following opinion piece appeared in National Review’s Capital Matters on May 1, 2023.

Study after study shows that people who win lotteries often fritter away the newfound wealth and wind up no better off than they were before. States don’t win lotteries, but New Mexico recently came as close as a state can.

A recent report from Pew found that between January 2020 and June 2022 no state saw faster growth in tax revenues than New Mexico. In late 2022, budgetary analysts started telling New Mexico politicians that they were in for an even greater “gusher” of revenues. That’s thanks to the state’s share of the Permian Basin, which has led to New Mexico becoming the second-largest producer of oil in the nation. New Mexico’s oil production has approximately quintupled since about 2011

For a state with just over 2 million people, this kind of boom has led to an incredible amount of money flowing into state coffers relative to the size of the state budget. Budget analysts at the end of 2022 said that state revenue would exceed spending obligations by 43 percent, with revenue rising to nearly $12 billion.

One might compare such a windfall to winning the lottery. Unfortunately, according to the National Endowment for Financial Education, 70 percent of lottery winners go bankrupt within a few years. New Mexico hasn’t gone bankrupt and, as long as the oil-and-gas money continues flowing, it will continue to have money. But New Mexico continues falling further behind economically.

The state is a cautionary tale that budget surpluses are nice, but even massive budgetary windfalls like New Mexico’s can fail to improve a state’s economic situation.

New Mexico has been a “blue” state since 1930. Over the last nearly 100 years, the state has had its share of Republican governors, but rarely even one house of the legislature under GOP control. Since Herbert Hoover was president, New Mexico’s GOP has never controlled both houses simultaneously. It has always been a poor state with an economy reliant on federal spending and natural resources. That could still change (if the state’s politicians get their act together).

Alas, alleviating New Mexico’s poverty (it has the nation’s third-highest poverty rate) will require “progressive” policymakers to suddenly figure out basic economics. Otherwise, all this oil-and-gas revenue is going to be frittered away with little or no improvement in the state’s dismal rankings.

Lottery winners didn’t suddenly work harder or become better at managing money overnight. So, when presented with a large amount of unearned wealth, they  tend to make poor decisions. And all that brings New Mexico’s politicians to mind.

Take the recently completed New Mexico legislative session as Exhibit A. When presented with a budgetary windfall, what did they do? Believe it or not, the first versions of a big tax bill included several tax hikes. Initial versions of an “omnibus” tax bill introduced in the New Mexico Legislature included:

  • Two additional tax brackets of 6.5 and 6.9 percent . New Mexico’s current top rate is 5.9 percent (already increased from the 4.9 percent rate charged during Bill Richardson’s days as governor) would have been further augmented by even higher rates with the 6.5 percent kicking in at $200,000 for married filers;
  • Tax hikes on capital gains and corporate income;
  • Higher taxes on tobacco and alcohol;
  • Subsidies for electric-vehicle buyers, charging stations, and additional handouts for the already-heavily-subsidized film industry.

There were some modest reductions of New Mexico’s peculiar gross receipts tax, however even those reductions were to be phased in over four years and were made contingent upon future tax revenues meeting current record-breaking levels.

In the end, this bill, which was put together and passed by New Mexico’s overwhelming Democratic legislative majorities was (mostly) vetoed by Democrat Governor Michelle Lujan Grisham.

She could have taken a stand for free markets by just eliminating the bill’s proposed tax hikes. Or she could have done all manner of other things with the bill. Ultimately, what became law were one-time tax “rebates” of $500 or $1,000 depending on filing status, a boost to the already-generous film subsidies, a “refundable” child tax credit that mostly amounts to spending, and—this was welcome –-ending taxation of deductibles and copays paid to medical professionals.

In the end, most of the surplus was retained or used to add to New Mexico’s already bloated state government.  Spending grew by another $1.2 billion in the latest budget  thanks to a 14 percent year-over-year increase.

As you can probably imagine none of this is going to inspire businesses or citizens to flock to New Mexico. Narrowly avoiding a slew of tax hikes while in posession of the largest surplus in state history is at best a reiteration of the state’s broken “progressive” politics which have done so much to keep the state impoverished for decades. That the state is taking this tack at a time when neighboring Texas, Utah, Colorado, and Arizona have been cutting taxes only makes matters worse.

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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Energy and Environment Notable News Oil & Gas Top Issues

Debate: Energy and the War in Ukraine

When Russia invaded Ukraine over a year ago energy prices leaped higher. Since then there has been continued argument between advocates on both sides as to what kinds of policies should be put in place in the wake of this crisis.

RGF president Paul Gessing was asked to debate the issue in a short series of  articles by Divided We Fall. Needless to say, we at the Rio Grande Foundation emphasized the critical need for free market approaches and traditional energy sources while his opponent pushed in the opposite direction.  Read the short series of articles here. 

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2023 New Mexico legislative session recap

Going into the 2023 legislative session, we at the Rio Grande Foundation had three goals.

1)    Use the state’s massive $3.6 billion surplus to reform the “pyramiding” and business service taxation inherent in New Mexico’s gross receipts tax;

2)    Push for SOME kind of serious education reform to improve upon New Mexico’s abysmal 52nd position in the National Assessment of Educational Progress (NAEP).

3)    Restore “democracy” by placing some kind of limit on this and future governors’ emergency powers.

Sadly, none of these ideas were taken up and thus the session must be considered a failure.

Additional goals included pushing the Legislature to address the impending electricity shortage which could hit New Mexico as soon as this summer, addressing the medical provider shortage, and helping to push back against bad bills.

The “omnibus” tax reform (HB 547) DID include a gross receipts tax reduction that will be both phased in and contingent on robust revenues. Sadly, it utterly failed to address business services taxation. It also included electric vehicle and energy storage subsidies, film subsidies, higher corporate and capital gains taxes, and taxes go up for drinkers (5 cents per drink), cigar smokers, corporations.

Perhaps Gov. Lujan Grisham will veto all or part of the bill? There is simply no reason for tax hikes with a massive surplus available.

Spending went up dramatically. At the start of the session the Legislature and Gov. largely agreed on a big-spending budget increase of 12% to $9.4 billion. When the dust settled in Santa Fe, the Legislature passed a $9.6 billion budget with an increase of 14% in a single year.  NM government is already bloated and has grown quickly in recent years. New Mexico continues to waste money.

4)    The best single bill of the session was SB 523 which passed late in the session as Gov. Lujan Grisham seemingly put the screws to Democrats reluctant to reconsider a 2021 law that was favorable to the trial attorney industry. Doctors and patients alike are breathing a sigh of relief, but that doesn’t mean New Mexico won’t face a doctors shortage moving forward.

5)    Voting bill HB4 included automatic registration at government offices like the MVD, mandatory drop boxes, felons voting before their time is completely served and a permanent absentee voting list. The bill will have negative impacts on the integrity of our voting process.

Thankfully, a number of bad ideas died in the session.

6)    A new paid leave scheme was put forth under SB 11 which would have resulted in tax increases borne by employees and employers alike. It fortunately died after passing the Senate.

7) Most big environmental schemes failed: SB 520 net zero, HB 426 clean fuel standard, and the “green amendment” HJR 4 all died ;

8) Bills to ban plastic bags statewide died;

9) HB 25 and HB 28 which would have increased New Mexico’s minimum wage both failed.

How did your legislators vote on these and other issues? Check out the Foundation’s Freedom Index here.

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RGF luncheon event: Time to think small, April 5 at Marriott Pyramid

Event Information
Last day to buy tickets
03/31/2023, Midnight, (GMT-05:00) Eastern Time (US & Canada)

About the event:
Join the Rio Grande Foundation for a luncheon featuring speaker Todd Myers, Environmental Director at the Washington Policy Center, a market-oriented think tank in Seattle, and author of Time to Think Small: How Nimble Environmental Technologies Can Solve the Planet’s Biggest Problems.

April 5, 2023
11:45AM – 1:00PM
Albuquerque Marriott Pyramid North
5151 San Francisco Rd NE, Albuquerque, NM 87109

About Todd Myers:
With nearly two decades in environmental policy, Todd Myers’ experience includes work on a range of environmental issues, including climate policy, spotted owl habitat, old-growth forests, and salmon recovery. Currently, he serves as a member of the Puget Sound Salmon Recovery Council and was a member of the executive team at the Washington State Department of Natural Resources.

Myers’ writing has appeared in the Wall Street Journal, the BBC, National Review, Seattle Times, USA Today, and he has appeared on numerous news networks including CNBC, Fox News, and CNN. Recognized as a national leader on free-market environmental policy, Myers serves on the board of two national center-right environmental organizations, the American Conservation Coalition, an environmental advocacy organization that works to engage youth on conservation and environmental stewardship, and ConservAmerica, a group dedicated to habitat and wildlife conservation.

Cancellation policy:
The Rio Grande Foundation will honor cancellation requests until Friday, March 31, 2023, minus a $5 transaction fee.

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Economy Energy and Environment Legislature Notable News Oil & Gas Tax and Budget Taxes Top Issues

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 submits public comments in support of gulf oil/gas leasing

When it comes to issues surrounding oil and gas, the Rio Grande Foundation supports the industry. This is NOT because of the billions it provides our State every year or even the thousands of jobs it creates. We support the industry because we support human flourishing and energy allows humanity to flourish.

So, we support policies that allow energy development throughout the nation and even the world, including drilling in the Gulf of Mexico. The Bureau of Ocean Energy Management (BOEM), under the Department of Interior, is currently collecting comments on a proposed lease sale (environmental groups are opposed to any new sales).

Click here for details and if you’d like to comment, please do (no later than October 6, 2022). Rio Grande Foundation’s comments can be found below (they are also available on BOEM’s website: l8n-a2s4-dvbe.

The following comments are on behalf of the Rio Grande Foundation, a public policy research organization based in Albuquerque, NM and working to make New Mexico more economically prosperous.

The Bureau of Ocean Energy Management (BOEM) recently released plans for offshore energy development for the next five years. Currently, BOEM’s plan only includes 10 lease sales over a 5-year period in the Gulf of Mexico and does NOT guarantee those sales will take place.

BOEM does not have an active leasing plan for the Gulf of Mexico and will be unable to hold any lease sales until the new plan is finalized. This will leave a multi-year gap in lease sales in the Gulf. The proposed plan needs to be finalized ASAP to help protect consumers and businesses from high energy prices!

The Gulf of Mexico produces 15% of our nation’s energy. The Rio Grande Foundation supports BOEM’s planned lease sale specifically and encourages opening the Gulf to ensure energy prices stay affordable for consumers.

New Mexico is the nation’s 2nd-biggest oil producing state. Nearly half of that oil is produced on federally managed land. So, while a New Mexican might be expected to oppose drilling in the Gulf in hopes of making New Mexico’s product more valuable, the reality is that we truly ARE all in this together. The federal government needs to expand, not contract, the ability of energy producers to bring oil and gas to Americans and potentially Western European nations as well who are dealing with shortages driven by Russia’s invasion.

Here are a few facts:

  • In FY2021, revenues totaled $4.1 Billion from OCS oil and gas activities.
  • If drilling in the Gulf is stopped, western states like New Mexico are likely to see a decline in lease sales on federal lands located within the state in the future; negatively impacting our state’s budget and infrastructure funding.
  • Oil produced in the Gulf of Mexico is some of the least carbon intensive oil produce anywhere in the world and will play a key role in reducing global carbon emissions.
  • The Gulf of Mexico funds conservation efforts across the country, including our national parks.
  • Producing American oil and gas in the Gulf of Mexico helps protect consumers from instability in global markets.
  • If drilling in the Gulf is stopped, western states like New Mexico are likely to see a decline in lease sales on federal lands located within the state in the future; negatively impacting our state’s budget and infrastructure funding.

Energy abundance is critical to our way of life. The Gulf of Mexico is a big part of America’s energy picture. I urge you to approve this plan.