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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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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.

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RGF talks to KOAT 7 about $18 million being wasted on empty state office buildings

According to a new report from the Legislative Finance Committee the State of New Mexico is wasting $18 million a year on unused office space. The LFC report found telework and 21% of staff vacancies are accounting for unused offices.

Telework COULD be a cost-saving measure in some circumstances, but the State needs to produce coherent rules for government employees and whether those jobs are able to be done remotely or not. Sadly, the Lujan Grisham Administration has not managed to do this 2.5 years after COVID began and created the push for remote work. Watch the story here.

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Op-ed: New Mexico should strengthen, not weaken anti-donation clause

The following opinion piece appeared in the Las Cruces Sun-News on Sunday, October 23, 2022.

LAS CRUCES SUN-NEWS - Downtown Las Cruces Partnership

There are numerous important issues on New Mexicans’ ballots as early voting kicks off on October 22nd. Amendment 2 has not received the same attention as Amendment 1 which relates to pre-K and early childhood spending, but voters will be asked to vote on this important issue also.

Amendment 2 would, if adopted, further weaken New Mexico’s “anti-donation clause” by allowing the Legislature to “appropriate state funds for infrastructure that provides services primarily for residential use—such as internet, electric, natural gas, water, and wastewater.”

The anti-donation clause goes back to New Mexico’s founding. At that time and throughout the decades leading up to it railroads were among the dominant economic interests in the nation. Before adoption of anti-donation clauses government bonds were often given to railroads. These often failed, leaving states and municipalities in debt while enriching the railroad “robber barons” of the day.

Those days are behind us, but special interest groups are always finding new ways to fleece taxpayers of more of their hard-earned money.

While infrastructure includes the aforementioned “infrastructure” items, as with all constitutional amendments the Legislature will finalize the text of the law if it passes muster with voters. Allowing taxpayer funding for private gain could create problems, especially leading to what most New Mexicans would call corruption.

In 2005, the Santa Fe New Mexican reported that a state senator slipped $50,000 into that year’s Christmas Tree (capital outlay) Bill to pave a private road in Pecos where his friend, a registered lobbyist, happened to live. San Miguel County and the Village of Pecos did not request the appropriation and protested that using public dollars to pave a private road is illegal.

That kind of shady deal won’t be illegal anymore if Amendment 2 passes. Rather, because the Legislature and people of the State will have expressed support for it, this kind of activity could spread rapidly throughout New Mexico government.

Rather than further weakening New Mexico’s anti-donation clause, we’d like to see it strengthened and restored. Over the years the effectiveness of the clause has been undermined by bipartisan advocates of corporate welfare. Specifically, the Legislature allowed local governments to “provide land, buildings or infrastructure for facilities to support new or expanding businesses.”

While the theory behind “corporate welfare,” that is, giving businesses special benefits to get them to come to New Mexico may seem like a good way to bring businesses to the State, the economists of all political stripes agree that such efforts ultimately harm taxpayers, lead to corruption of government officials, and are inefficient and thus prone to failure.

New Mexico has a long history of failed “corporate welfare” efforts. Remember Eclipse Aviation which received $100 million of your tax dollars under Bill Richardson only to go bust? Spaceport America was built for the express benefit of billionaire Richard Branson’s Virgin Galactic, received $250 million in taxpayer subsidies. The facility has been open for 11 years now and has yet to launch a single paid space tourism flight.

When given the chance voters often oppose corporate welfare. Last November Albuquerque voters rightly saw the proposed New Mexico United stadium as nothing short of corporate welfare and overwhelmingly rejected taxpayer financing for it at the ballot box. Now, the team is moving toward building its own stadium, likely with private financing.

New Mexico’s anti-donation clause is an important protection for New Mexico taxpayers against the unholy alliance of powerful special interests and big government. Government already has plenty of tools available to generate economic development including adopting better tax and regulatory policies for all. Amendment 2 would take New Mexico in the wrong direction.

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’s Gessing talks constitutional amendments w/ KOAT Channel 7

RGF’s president Paul Gessing sat down with KOAT Channel 7 to discuss two of the constitutional amendments that will be on New Mexicans’ ballots when they vote this fall.

Constitutional Amendment 1 would tap into New Mexico’s Land Grant Permanent Fund. Gessing’s appearance is toward the end of the clip.

A separate KOAT segment addressed Amendment 2 which would allow the Legislature to spend taxpayer dollars on infrastructure projects that would expressly benefit private interests.  Here is our detailed assessment of Amendment 2.

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A conservative looks (down) the New Mexico ballot

If you’re looking for the merits and demerits of the various candidates for governor and attorney general, there are plenty of other posts on this page or podcasts at TippingPointNM.com. We’re here to discuss the so-called “down-ballot” or lower-profile issues before voters this November. In person early voting at the county clerk’s office begins Tuesday, October 11 while early voting sites open on Saturday, October 22nd.

JUDGES: without putting too fine a point on it, New Mexico’s judiciary is in need of a massive overhaul. It is one of the primary bodies responsible for the States horrendous crime problems. Currently, New Mexico’s Supreme Court is 100% Democrat with 4 of the 5 having been nominated by Gov. Lujan Grisham (only Michael Vigil who was elected in 2018 and faces retention this election was NOT appointed by MLG).

There are numerous other Metro Court and other positions, most of which are unopposed, but there are retention elections and those are VERY IMPORTANT. In New Mexico a judge must must receive at least 57% of the vote. So, it IS possible for voters outraged by deteriorating public safety conditions to push back against the judiciary in hopes of getting better judges on the bench.

In terms of constitutional amendments Amendment 1 would tap into New Mexico’s Land Grant Permanent Fund to create a host of early childhood programs, but most significantly universal pre-K. RGF has written extensively on the serious problems with this proposal here and here (for starters).

Amendment 2 would allow the Legislature to fund infrastructure projects for PRIVATE benefit. We have serious concerns about this proposal.

Amendment 3 would require that an appointed judge shall be up for election at the first general election one year after being appointed. At the election, the winning candidate would serve the remainder of the term in effect. This one is not an issue.

Bernalillo County voters are being asked to amend the County charter. After some difficulty finding out exactly what changes would be made we reached out to the County. You can read for yourself here what it would do (this information is not on the actual ballot). We have no problem with the amendment.

As a general rule we recommend voting against ALL bonds, not because all of them are bad or wasteful, but because local voters have a tendency to blindly vote YES on nearly all bonds. Bonds are simply government debt which must be paid off by your property tax dollars. Broadly speaking voters should be more careful about these, but bonds are almost never voted down at least in the Albuquerque metro area (this may not be the case in other areas of the State, so vote accordingly).

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Lujan Grisham touts abortion; what about economy, education?

The following appeared in the Las Cruces Sun News on Sunday, September 25, 2022 (and in several other papers).

With just a few weeks before early voting, what issues will motivate how New Mexicans vote? According to one recent poll the top issue this fall is inflation/the economy (at 59%). Crime was right behind at 58% followed by immigration and health care. Abortion was down the list at just 29%.

Surprisingly, the poll (done by KOB-TV) fails to even ask about education. In a state that consistently ranks at the very bottom in the nation on numerous (and bipartisan) education reports, serious education reforms should be at least on the radar. This is especially true as education is an inherently state issue (unlike immigration or inflation).

But, if you follow Gov. Lujan Grisham’s campaign’s public messaging you might believe abortion is the only important issue facing New Mexicans. Because we believe the New Mexico economy and education system are two critically important issues, the Rio Grande Foundation looked carefully at both candidates’ websites for details on their plans.

Lujan Grisham’s campaign website is: michellefornewmexico.com. There she touts policies she and the Democrat Legislature have enacted. And, she does have some significant economic policy accomplishments. These include a slight gross receipts tax reduction as well as Social Security and military pension tax reductions passed earlier this year.

In terms of education policy, she focuses her attention on various new programs, teacher raises, and generally spending more money. But recently released state test scores were abysmal. The “moon shot” simply hasn’t moved the needle, and what data we have indicate that New Mexico students suffered greatly during the year of lost in-person learning of the pandemic. New Mexico was one of the states that lost the most classroom time thanks to Lujan Grisham’s COVID policies.

More importantly, the governor offers no specific policies moving forward in either area. How, for example, will she use the $2.5 billion budget surplus the state is expected to have when the Legislature convenes next January? With state spending having already risen by 30% under this governor and voters likely to provide permanent fund dollars to pre-K, is the governor planning to push for long-overdue gross receipts tax reform, more spending, or something else entirely?

We know New Mexico still faces significant economic challenges. The state lost thousands of businesses thanks to the pandemic lockdowns and there are fewer employed New Mexicans today than before the pandemic. New Mexico also remains among the most impoverished states in the union and one that is heavily dependent on the volatile oil and gas industry.

Mark Ronchetti, on the other hand, has released detailed and thorough plans (available at markronchetti.com) explaining exactly what he would like to do on both the economy and education. At the Rio Grande Foundation we agree with him on eliminating “pyramiding” of the gross receipts tax and providing stipends for low-income families to help students catch up to COVID learning loss. He plans to reduce income taxes for middle- and low-income New Mexicans. He also wants to emphasize school leadership and vocational learning along with apprenticeships. He has very detailed plans that are worth considering. We’d do some things differently, but it stands in stark comparison to Lujan Grisham’s non-plan.

We are less than a month away from the start of early voting. Hopefully by then voters will have more information on what Gov. Lujan Grisham plans to do in a second term so they can compare that plan to what Mark Ronchetti has already put forth.

Abortion is an important issue to many people, but the economy and our struggling education system impact us all and on a daily basis. They form the basis of what state policymaking is all about and will be the most important issues discussed in the upcoming 60-day session. Voters need to be able to make an informed decision.

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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New Mexico’s self-inflicted doctor shortage

The Eastern New Mexico News Homepage

There is a life-or-death issue facing New Mexicans. It has been widely reported on in the media and is important to New Mexicans from all walks of life. Voters will have a lot to say about it this November. The issue is our shortage of medical professionals.

If you live in rural New Mexico you have likely faced severe challenges in finding specialists for years, but according to one recent report, 32 of New Mexico’s 33 counties (excepting Los Alamos) face a shortage of primary care physicians. This doesn’t even consider the shortage of specialists which is even more pronounced in certain fields.

Reports have reiterated the fact that (as our population ages and our doctors age as well), our State faces an even greater need for doctors in the years ahead.

Like most challenges facing New Mexico, poor public policy is a problem. The most obvious reform needed is for the Legislature to repeal HB 75, which passed in the 2021 session and was signed by Gov. Lujan Grisham. Implementation of the law was subsequently delayed, but if it is it will make New Mexico an even less attractive place for doctors to work than it already is, worsening our shortage of medical professionals.

Here are a few details:

The Medical Malpractice Act (HB 75) increased the cap on malpractice lawsuits. That means physicians can be sued for a great deal more for punitive (punishment) damages, up to $4 million. That number rises to $6 million in just a few years. To give a comparison, in doctor-friendly Texas, the cap is limited to $250,000).

Because the cap is so high now, many Insurance Companies won’t cover doctors in private practices that do procedures like colonoscopies or other in-office surgeries. In other words, doctors can’t get malpractice insurance to cover them because they are too risky to insurance companies.

As one prominent Democrat doctor wrote in an article written earlier this year, “Our Governor is aware of the issues, but Democrats are often influenced by the Trial Attorneys because they are big contributors to the Democratic Party and, of course, they stand to gain a whole lot of money from such a large increase in the ‘cap.’

Another self-inflicted misstep that has resulted in a loss of medical professionals is Gov. Lujan Grisham’s vaccine mandate on medical professionals. While specific numbers are hard to come by, it is hard to justify such a mandate given that COVID vaccines have not prevented the spread of COVID. In August 2021 media reports quoted Dr. David Scrase as saying 90% of nurses were vaccinated and roughly 3,000 healthcare workers in New Mexico were unvaccinated.

We don’t know exactly how many medical professionals left New Mexico due to the Gov.’s vaccine mandate, but even a few hundred is far too many. And, the Gov.’s vaccine mandate continues to remain in effect along with her public health orders.

Finally, a simple way to attract more doctors is to stop taxing them. Although often hidden from the public, doctors in New Mexico often must pay gross receipts tax on services provided to Medicaid patients and “fee for service” patients.

Lawmakers recently announced the State has a $2.5 billion surplus headed into the 2023 legislative session. Reform of the gross receipts tax, including repeal of this tax on medical services, is a must that can be done with minimal revenue loss.

The U.S. Census Bureau estimates more than 30 percent of New Mexico’s population will be over age 60 by the year 2030, an increase of nearly 50 percent from 2012. All of us need doctors, but as New Mexico ages the need becomes critical. There is no panacea, but these are some of  the worst policy obstacles to attracting medical providers to our State.

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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Op-ed: State must encourage people to work

The following appeared in the New Mexican on August 20, 2022.

One of the most important yet underreported issues in New Mexico is our state’s poor workforce participation rate.

Currently, New Mexico has plenty of jobs, yet too many New Mexicans remain outside the workforce. Workforce participation in New Mexico first dipped during the global recession of 2008-09, but it took another big dip during the coronavirus pandemic and unlike most of our neighboring states, it has not recovered.

Our governor’s strict COVID-19 lockdowns played a role in pushing New Mexico’s workforce participation rate downward. In January 2020, the workforce participation rate in New Mexico was 58.7 percent. That rate dropped to just 54.4 percent by April. Just over two years later, the workforce participation rate still sits nearly 2 percent below where it was before the pandemic at 56.9 percent.

According to one report, “The Department [of Workforce Solutions] has experienced an increase in the number of unemployed who are receiving benefits without following through on their job searching requirements.” The department was flooded with new accounts and hasn’t been able to properly enforce these requirements.

In addition to the overwhelming number of recipients, the additional funds meant to alleviate damage caused by the pandemic have created a reverse incentive for reluctant workers.

While many policymakers are focused on the fallout from the pandemic, our research shows this problem is decades in the making. Since 1999, the workforce participation rate has steadily been decreasing by an average of 0.37 percent per year. The decline for men has been more profound, declining at 0.44 percent per year.

To explore these trends further, I looked at each sex by age range and found the most alarming change in men ages 20 to 24. In this age range, the workforce participation was 87.3 percent in 1999. That has steadily decreased to just 74.8 percent in 2019. For women in the same age range, the workforce participation rate in 1999 was 67.6 percent and rose to 73.7 percent in 2019. All other age ranges had a slight decline over the same period for both sexes.

One factor that appears to be contributing to the rapid decline in workforce participation rate in New Mexico could be the increase in single-parent households. In the year 2000, the percentage of children in single-parent households was 33 percent. That rate has steadily increased at a rate of 0.45 percent per year to 44 percent in 2019. New Mexico’s single-parent household rate has been growing at a faster rate than the national average. There is a strong correlation between increasing single-parent households and dropping workforce participation rates from 2000 to 2019.

There is no single policy solution for our abysmal workforce participation rate. Reforms to state and federal welfare programs that currently incentivize single-parenthood and idleness would help. Workforce Solutions must, at minimum, properly enforce job-search requirements. Setting a time horizon on entitlements New Mexicans are receiving by phasing out benefits over the course of one to two years (unless there is a specific inability to work) is another worthwhile policy. Reducing dependence on entitlement programs should be a top priority for policymakers.

Also, the Legislature, working through the department, should consider a campaign that seeks to encourage young men to get to work and encourages parents, primarily fathers, to be present in their children’s lives.

Many of New Mexico’s biggest problems — drug use, violence, family breakdown and poor educational performance — are directly related to a growing cultural acceptance of idleness and a nonparticipation in society. Encouraging New Mexicans, especially young men, to get into the workforce is a necessary and significant step toward improving our state in a broad array of metrics. It is time to use innovative approaches to get New Mexicans back to work.

Brendyn Toersbijns is a policy analyst with 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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Top 5 things New Mexico should do with its largesse (and a few they shouldn’t)

New Mexico, fresh off a 15 percent spending increase, has ANOTHER $2.5 billion in “new” money (basically a budget surplus). Who knows what big-spending schemes the Legislature will cook up for the 2023 legislative session? Of course, what happens with that cash depends A LOT on what happens in November.

Here are the top 5 things the Legislature SHOULD do with the money (and a few things to avoid);

1) Address the gross receipts tax and both its “pyramiding” (taxes paid on top of taxes) as well as its taxes on business input services is an ABSOLUTE must. It won’t “cost” much in the grand scheme of things and as analysts told the Legislature recently, it is a big factor holding our state back.

2) AFTER the GRT is reformed, New Mexico should begin phasing down (and out) both personal and corporate income taxes. 9 states currently have NO personal income tax.  The corporate income tax only accounts for $200 million or so annually. It is time to diversify our economy and New Mexico can do so by eliminating the corporate income tax.

3) Pay down pension debt while reforming them AND giving workers freedom to invest their OWN retirement funds. Yes, that’s a lot, but New Mexico’s underfunded pensions are in need of not only more funding, but fundamental transformation. Dumping more tax dollars into them is not a particularly good idea, but paired with needed reforms and increased worker control, this is a worthy approach.

4) Infrastructure: repave our roads and bridges, water projects. While New Mexico roads are ranked okay nationally (despite our dangerous drivers) e all know of certain roads that need to be paved/improved across our State. It is time to get this infrastructure in top shape. Same with water. It is time to make every drop count and explore innovative approaches to improving our future water security.

5) Bring/keep more medical professionals. New Mexico needs more medical professionals. While basic reforms to our new, harmful medical malpractice law are essential, improving Medicaid reimbursement (and ending the GRT on medical services as part of a broader GRT reform) are two ways to make New Mexico a more attractive place for medical providers.

Things we don’t need

1) Another year of massive spending growth. New Mexico’s state spending as a percent of GDP is the highest in the USA in FY 2023 (vastly outpacing its neighbors as seen below). Broad new spending increases are not going to improve our State;

2) Socking the money away: this is only deferred spending growth. New Mexico needs to act prudently with this money to address important policy shortcomings NOW.