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

Democrats walk fine line on energy

The following appeared in the Albuquerque Journal on April 18, Santa Fe New Mexican, and other New Mexico media outlets.

If there were an overall theme for New Mexico’s current political situation it would be the ongoing attempts by Democrats to placate their environmentalist base which opposes traditional energy sources while at the same time keeping energy dollars flowing into the State’s coffers.

The Biden Administration’s moratorium on oil and gas permitting is the most notable example of this conflict. Gov. Lujan Grisham has publicly spoken out about it, but Attorney General Balderas has refused to join a lawsuit challenging the policy that was recently filed by a dozen states. None of those states have as much to lose as does New Mexico, but our elected leaders are unlikely to challenge a President of their own party.

The internal conflict was on full display in the recently-completed legislative session as well. Thankfully, the most radical bill on energy which would have banned “fracking,” (an oil and gas drilling process without which New Mexico’s oil and gas industry would be immediately decimated) failed without gaining traction.

Making it much further in the process only to fail unexpectedly was Sen. Mimi Stewart’s “clean fuel standard” SB 11. In 2019 Gov. Lujan Grisham made national headlines stating that New Mexico was going to increase vehicle mileage in New Mexico to 52 MPG by model year 2022.

SB 11 would have instead forced motorists to use “alternative” fuels with the goal of reducing carbon emissions while passing off the hard work of actually developing the technology onto the private sector. Presumably blame for higher fuel costs would have been shifted as well. The bill faltered after passing the Senate.

Anti-energy bills that did make their way into law included SB 8 which allows local governments  to enact more restrictive air quality regulations than are imposed by the federal government. It is unlikely that conservative counties where much of the Industry is located (and people are far more supportive of the Industry than liberal Albuquerque or Santa Fe) will enact such regulations, but this is about politics, not policy.

Speaking of politics, SB 112 which also made its way into law creates a “sustainable economy task force.” The task force’s stated goal is “diversifying New Mexico’s economy while reducing reliance on traditional energy sources.” Of course, New Mexico Democrats have controlled the Legislature for decades and with total Democrat control under Lujan Grisham, they have had ample time to enact the public policies necessary to “diversify” New Mexico’s economy.

Unfortunately, Santa Fe has repeatedly failed to reform the gross receipts tax, eliminate Social Security taxes, reduce onerous regulations, and expand educational choice (to improve workforce preparedness). In recent legislative sessions we’ve instead seen tax hikes passed at times of big budget surpluses. During both the 2019 (HB 6) and 2021 (SB 317) sessions tax hikes were adopted. Such cash grabs do nothing to diversify New Mexico’s economy. At best they diversify government revenues. In addition to tax hikes, policies like minimum wage hikes, paid sick leave mandates, and ongoing COVID restrictions imposed by the Executive only hinder economic growth and diversification.

Finally, this session, while the Legislature continued its piecemeal attacks on energy, after a decade of attempts they passed an amendment to increase distributions from the Land Grand Permanent Fund (the fund is generated by oil and gas). HJR 1 not only increased distributions by 1% but added an additional .25% to that amount for a total increase of 1.25%.

Continued existence of the fund happens only if the oil and gas industry thrives, so Democrats’ plan to take more money out while less money is put in seem problematic at best.

Rather than killing off energy first, New Mexico’s elected leaders should focus on diversifying the economy. When we are no longer among the very poorest states in the nation the Legislature can address ways to make the New Mexico less dependent on oil and gas.

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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Legislature Notable News Top Issues

And the legislators who voted for freedom in 2021 are…

The Rio Grande Foundation tracks floor votes on floor votes in the New Mexico Legislature through our Freedom Index.  Votes that are the MOST pro-freedom are scored up to +8 points while the most anti-freedom bills are rated as low as -8. Legislators receive points based on those votes.

One additional note: comparing House and Senate results is problematic as the two bodies vote on different bills with the Senate typically taking fewer overall votes.

Freedom Index Results

House: best

  • James Strickler 122 points
  • Stefani Lord 109 points
  • Randal Pettigrew 108 points

Senate: best

  • Cliff Pirtle 68 points
  • Mark Moores 65 points

House: worst

  • Miguel Garcia -189 points
  • Speaker Brian Egolf -187 points

Senate: worst

  • Jeff Steinborn & Mimi Stewart -150
  • Liz Stefanics -146
  • Katy Duhigg -145

 

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Economy Education Energy and Environment Health Care Legislature Notable News Oil & Gas Open Government Tax and Budget Taxes Top Issues

New Mexico session another missed opportunity

The following appeared in the Las Cruces Sun News on Sunday, March 28, 2021. UPDATE: Originally the article stated there was a production moratorium on federal lands. There is “only” a moratorium on new permits.

New Mexico is in one of the most unusual economic times in its history. Profound forces have impacted our State over the last year in unforeseen ways.

    • The Gov. and COVID shut down much of our State for much of the past year. COVID is declining, but New Mexico remains among the most locked-down states in the nation;
    • Oil and gas prices plummeted last April due to the pandemic and an international price war, but have come roaring back and produced $300 million in “new” money and a budget surplus;
    • Democrats in Washington recently passed a $1.9 trillion dollar “stimulus” that will dump an astounding $9 billion on New Mexico State and local governments. Meanwhile the Administration’s moratorium on oil and gas permits on federal lands will cost our State more than $700 million over the next few years according to Gov. Lujan Grisham;
    • While New Mexico governments are awash in money, businesses are struggling to recover. The State’s unemployment rate is 8.7 percent, 4th-worst in the nation.

To say we are living through unpredictable times would be an understatement. Oil and gas have always been volatile but are now more unpredictable than ever. This reflects broader economic uncertainty, but with the Biden Administration targeting the Industry, the Legislature must diversify our economy (this does not mean simply new sources of government revenue).

The unprecedented stream of federal spending flowing into our state is currently augmented by a flow of people. Housing markets are tight in most of our cities as Americans from big, expensive, states like California embrace remote work or simply move to states like New Mexico where they can spread out and buy a house for a lot less money.

Current trends are favorable, but long-term economic prosperity requires enacting policies that make the State more attractive as a business destination. The 2021 Legislature had a few successes but ultimately failed to enact policies that will bring long-term prosperity to New Mexico.

Despite a big budget surplus, the Legislature raised taxes on health insurance (SB 317). They imposed a new sick leave mandate on businesses, including small ones (HB 20). And, passage of HB 4, the misnamed “Civil Rights Act” will impose massive new legal costs on New Mexico governments without actually improving policing or protecting civil rights.

There were bright spots. HB 255 reformed New Mexico’s liquor licensing to make it easier for bars and restaurants long-term. HB 177 passed which allows New Mexicans to start micro-businesses by making non-perishable food items in their homes for sale.

But the gross receipts tax and its taxation of busines inputs and services remains a stumbling block for businesses. New Mexico also remains among a relatively small group of states that tax Social Security. No significant tax cuts or reforms were adopted. Also, no widespread reform of burdensome regulations (like the State’s “prevailing wage” law that artificially increases costs on public works) projects was enacted.

Some will argue that (after a decade of trying) tapping the Permanent fund to boost various education programs will help improve our workforce, but the track record of governments (including New Mexico’s) spending more money to boost education outcomes is spotty at best. Empowering parents and families with the resources needed to choose the educational option that is right for them (especially after a year of Zoom education), is more likely to succeed and at a fraction of the cost, but legislation to that effect was quickly defeated this session.

Microchip manufacturer Intel just announced that it is investing $20 billion in neighboring Arizona to build two new facilities. Such “economic diversification” is exactly what we need and what the Gov. and Legislature claim to want. Until the Legislature gets serious about reforming our economy we’ll continue riding the wave of luck, boom and bust in the oil patch, and Washington debt.

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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Education Issues Legislature Notable News Top Issues

New Mexico Students and Parents Need School Choice Now

KRWG Public Media (@krwg) | Twitter

The following appeared at KRWG and other news outlets on or around March 18, 2021. It was written by Policy Analyst Frank Pagurko:

Even before the pandemic, the New Mexico education system has performed poorly. Despite the continuous and ever-increasing stream of money from the state designated for education, we consistently rank as one of the worst, if not the worst, states in the nation on educational success. New Mexico spends more per student than most of its neighbors and yet achieves scores far below them on student success. 

These poor outcomes hit students who come from ethnic minority communities and other disadvantaged groups especially hard, as evidenced by the recent Yazzie/Martinez suit against the State of New Mexico. That lawsuit which deemed New Mexico’s education system “inadequate” resulted in a push for additional funding. The results of that increased funding have been thrown into question by the COVID 19 pandemic.

The school shutdowns of the past year have only clarified the long-standing failures of public education in our state. Contrary to statements from the Public Education Department, nearly every education expert from across the spectrum has decried the classroom time lost over the past year as Zoom meetings replaced traditional classes. Notably, in Europe and many other states and in private schools right here in New Mexico, many students hardly missed any time in class.

    The problem is the “one-size-fits-all” nature of our education system. It is time to allow parents to choose which kind of school is best for their own children. As of spring 2020, 30 states have implemented at least one private school choice program, such as a voucher system, tax credit, or savings program. Legislative proposals have been introduced in 14 more states, including New Mexico. Unfortunately, New Mexicans keep electing political leaders in the Legislature who are more beholden to the interests of teachers unions than they are to the students themselves.

By funding students rather than systems, school choice programs would allow parents the legal right and financial ability to send their children to the school of their choice, or provide financial resources to home school them. Wealthy families already have this option, of course, but school choice programs extend those opportunities to those who have fewer financial resources. Research shows that low-income families are the primary beneficiaries of school choice programs across the country. School choice, at its core, is about improving education for all students by leveling the financial playing field.

Those who have a vested interest in the status quo, such as the teacher’s unions, claim that school choice weakens public schools. That is simply not true. According to data gathered by Edchoice, 26 out of 28 studies on the subject have shown that educational outcomes improve for all students, those who take advantage of school choice as well as those who remain in the public school system, in states with robust school choice options.

Educational dollars should not serve the public school system per se or teachers unions in the first place. They should serve students. Funding should be channeled to whichever source of education best serves the needs of individual students.

Famed union organizer Albert Shanker once was quoted as saying, “When school children start paying union dues, that’s when I’ll start representing them.”

Especially in New Mexico our school kids have been simply left out of the equation. Too many families in our State are locked into this broken system by their financial circumstances. Private school choice would change that and improve student outcomes. The solution to education in New Mexico is not the continuation of the status quo, but rather what may seem to many like revolutionary change. Now is the time to fund students rather than systems.

Frank Pagurko is a Policy Analyst at 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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Issues Legislature Notable News Top Issues

The worst bills of 2021 New Mexico Legislative session (that passed)

RGF tracked all of the bills in the 2021 Legislature and rated them based on their impact on your freedoms. You can find out about those bills and how your legislators did here at our Freedom Index site.

The following are some of the very worst bills that passed the 2021 New Mexico Legislature

SB 42: increases taxpayer contributions to the Education Retirement Board (ERB) with no additional input from employees. The bill also fails to make the fund solvent;

SB 317: Among other issues this bill increases taxes on certain health insurance policies from 1 percent to 3.75 percent. The legislation represents a tax hike of $153.2 million annually initially;

HB 20: Mandatory paid sick leave (government employees were ultimately not included);

SB 112: Sustainable economy task force: creates a task force with the express goal of reducing reliance on oil and gas. Of course, New Mexico’s Democrat-controlled Legislature has had ample time to enact public policies to “diversify” New Mexico’s economy;

SB8: Gives local governments the ability to enact more restrictive air quality regulations than are imposed by the federal government;

HJR 1 Increases withdrawals from New Mexico’s Land Grant Permanent Fund by 1.25% increase and dedicates 60% for “early childhood” programs/40% for K-12;

SB 84: Community Solar: Further reduces reliability of electrical grid by providing special incentives for solar providers;

HB 2: The New Mexico budget increases spending by an already-bloated State government and provides already-well-compensated and economically-stable State employees with pay raises;

HB 4: The so-called New Mexico Civil Rights Act would actually do little to protect New Mexicans’ civil rights and instead simply opens local governments throughout the State up to more litigation.

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Issues Legislature Notable News Top Issues

First: The Good bills of 2021

The New Mexico Legislature adjourned on Saturday. While most of the bills passed were NOT good, there were a few highlights which we’ll discuss in further blog posts this week. Gov. Lujan Grisham has announced (see this rather bizarre video) where she indicates she’ll soon call a special session to pass marijuana legalization legislation.

Here are a few of the BEST bills to pass this session:

HB 255: Liquor licensing reform. While the bill is messy and not entirely pro-freedom, the effort to undertake reform of New Mexico’s anti-business liquor licensing laws is probably the best pro-business legislation this session. RGF supported this legislation once a tax hike was eliminated from the bill on the Senate floor;

HB 177: Reduce restrictions on sale of non-perishable homemade food;

HB 278: Eliminates gross receipts tax pyramiding for certain “business to business” sales of manufactured goods;

HB 55: Increases transparency for capital outlay projects by requiring the publishing on the legislative website a searchable list of capital projects passed beginning with the 2022 Legislature;

SB 304: Creates legislative redistricting commission to draw lines for various political seats including Congress and the Legislature.

Various COVID related tax rebates and exemptions, especially those targeted at bars and restaurants also passed with bi-partisan support.

You can find out more about these and other bills along with (tentative at this point) ratings of legislators at the Foundation’s Freedom Index.

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Constitution and Criminal Justice Legislature Notable News Tax and Budget Top Issues

A domestic war on private prisons isn’t helpful

The following article written by the Rio Grande Foundation’s Patrick Brenner appeared in the Santa Fe New Mexican on March 10, 2021. It also appeared in several other New Mexico based outlets.

Contractor-operated prisons, or so-called private prisons, have been vilified among progressives, even though their success in preparing inmates for productive engagement after their incarceration should be lauded by all social and political ideologies as part of the solution to social justice reform.

House Bill 40, which would eliminate all privately managed correctional facilities in New Mexico, has been making its way through the Legislature this session.

Last month, President Joe Biden signed an executive order to end new contracts between the Department of Justice and contractor-run corrections facilities, which almost exclusively house foreign citizens convicted of federal crimes. Contractor-run correctional facilities perform a valuable service. They help control overcrowding in publicly run prisons while providing more and better rehabilitation opportunities. Typically, inmates are safer, as rates of assault were lower at contractor-run facilities than rates in publicly managed prisons.

Opened in 1998, the Lea County Correctional Facility in Hobbs is a contractor-managed facility operated by GEO Group on a former World War II training base. As with all correctional facilities in the United States, it is managed in compliance with standards set by the American Correctional Association. The facility was most recently reaccredited in 2015 with a perfect score.

The facility provides inmates with training, work programming, recreation and educational opportunities. GEO’s in-custody and post-release “continuum of care” programming, developed by experts in criminal justice, substance abuse, psychology and other areas, keeps residents engaged for positive change and is critical for them to be successful once they serve their sentence and to avoid reoffending.

A study from the Rand Corporation found inmates who participated in correctional education programs were 43 percent less likely to recidivate than inmates who did not. And, often, state budget cuts hit prison programming first, while private contractors have flexibility and can invest their own resources to continue to do what is best for those in their care.

While visiting another GEO Group-managed facility in New Mexico, I met residents and staff who spoke highly of their experiences with the programming offered. Many residents have struggled with substance abuse challenges and require acute counseling and rehabilitation programming to help overcome their addiction. According to the Sage Neuroscience Center, all of the top 10 causes of death in New Mexico can be at least partially attributed to drug and alcohol abuse.

Program residents must complete the Residential Drug Abuse Program as part of their sentence. With new executive orders underway and the threat of HB 40, these programs could be shut down, potentially forcing these individuals into a jailhouse general population where they would not be able to get the services they need to survive and thrive after they serve their sentence. Revoking important substance abuse programs would destine many of these people to the damning cycle of ongoing drug and alcohol abuse, harming not only themselves but also their families and local communities.

In short, all contractor-operated facilities follow the same protocols policies and procedures as publicly run facilities under the New Mexico Corrections Department. Furthermore, the contractors have strict oversight of their operations that include on-site monitors, something the government facilities and the state lack.

Most importantly, as our nation shifts its corrections paradigm to highlight judicial reforms and inmate reentry, we should leverage all of the successful tools at our disposal to provide inmates with the care, attention and training they need inside facility walls — whether contractor run or publicly run — in order to be well-functioning members of society when they rejoin the public.

Continuing to wage war on contractor-run prisons doesn’t solve any problems or help inmates. If a program works, it shouldn’t matter who is managing it. By working together, we can rethink our prison system for the benefit of everyone.

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Economy Legislature Notable News Top Issues

Opinion piece: High-interest loans have a purpose

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Education Legislature Notable News Open Government Top Issues

Independent analysis: New Mexico K-12 school opening rate among slowest in US

As if New Mexico students didn’t already face serious challenges, see this quote from the New York Times (which, to their credit has been pushing for schools to reopen). 

Unfortunately, you can’t embed the map here, but as of Feb. 22, New  Mexico schools are among the least reopened in the entire nation, a situation that is problematic for our State and its future. According to the Burbio data:

New Mexico schools are 21.3% open;
Arizona is 68.6%;
Utah is 90.2%;
Colorado is 77.1%;
Oklahoma is 67.5%;
Texas is 90.8%.

Whether these states spend more or less than New Mexico on K-12 and whether or not they have expensive pre-K programs, every other state in the region is blowing the doors off New Mexico. Of course, our State’s largest school district, Albuquerque Public Schools, has already punted on the entire 2020-2021 school year.

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Education Issues Legislature Notable News Top Issues

Let them play! And let them go to school!

The fact that Albuquerque Public Schools has refused to reopen its doors to students for the duration of the 2020-2021 school year means (under Gov. Lujan Grisham’s COVID 19 rubric) that students at APS schools won’t be able to play sports. This led to protests over the weekend.

Should APS students be able to play sports? Should they be allowed to go back to school? The simple answer is YES to both. For the duration of COVID 19 the Rio Grande Foundation has urged policymakers to maximize individuals’ ability to decide how much risk they are willing to tolerate in going about their lives (or taking COVID precautions).

Ultimately, the problem here is one-size-fits-all policies that put policymakers in charge of decisions for which they simply do not have the capacity to make basic tradeoffs. The one-size-fits-all component transcends COVID. It has been a harmful feature of the government education monopoly for decades.

Of course, private schools have been open throughout the COVID situation. They have both a financial interest in what students and families want (as opposed to what unions want).