Category: Legislature

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Economy Legislature Notable News Tax and Budget Taxes Top Issues

Lujan Grisham’s GRT cut fails to address issues

The following appeared in Las Cruces Sun-News on Sunday, November 28, 2021.

For many years the Rio Grande Foundation has pushed the Legislature to take steps to address fundamental problems with the State’s gross receipts tax. We’ve regularly labeled it New Mexico’s “original sin” of economic policy due to the tremendous harm it does to New Mexico’s economy.

And, while we support ANY effort to lower tax burdens on New Mexicans, the Gov.’s plan for a small .25 percentage point reduction in the State’s GRT burden hardly makes up for recent increases. With a $2 billion budget surplus looming this January and the Senate Finance Committee Chair saying the Legislature has “more money than they know what to do with,” it is time to really reform the GRT, not provide an election year sop to struggling businesses and families.

Currently, the City of Las Cruces GRT is 8.3125%. Back in 2010 that rate was “just” 7.0%. The Gov.’s reduction, if implemented, won’t even get the rate back to 8.0%. Las Cruces is not alone. GRT rates have risen dramatically over the last 20 years due to a combination of state and local policies.

But the most important problem with the GRT is its unfair treatment of small businesses. Accountants, bookkeepers, even medical professionals, and attorneys (and many others) all must charge this tax on top of the cost of their services. Alternatively, service providers located in other states do not have to charge the GRT. This makes New Mexico especially unattractive as a location for small businesses. And it is those small businesses that grow into tomorrow’s big businesses which can employee hundreds or even thousands of workers and boost state and local economies.

With the Legislature expected to convene in January with up to $2 billion in surplus revenues generated primarily from oil and gas, now is the time to focus on fundamental reform. According to the Gov. this tax cut will reduce revenues by $145 million annually. That’s a tiny fraction of the surplus. At a bare minimum proper GRT reform needs to eliminate the taxation of these business services. It will be easier to make the change when there is plenty of revenue available.

The GRT and much-needed reforms to it are not a partisan issue. Republican Jason Harper has introduced reform legislation in recent years with former Senate Finance Committee Chair, Democrat John Arthur Smith. More recently, powerful House Appropriations Committee Chair Democrat Rep. Patty Lundstrom told attendees of the New Mexico Oil and Gas Association (NMOGA) conference in October that “tax pyramiding” needed to be addressed by the Legislature in the upcoming session.

While taxing services is the fundamental problem with the GRT, there are others. Specifically, while the tax was originally conceived as being applied at VERY low rates and broadly, the political process has led to the current, sorry state of high rate, exemption-filled tax structure.

Special interests line up in Santa Fe to lobby for exemptions and deductions for their business or industry and the Legislature is more than happy to offer those exemptions. And, whether you support taxing groceries or not, the process of eliminating that tax has directly contributed to the massive rise in GRT rates in recent years.

In addition to addressing taxes on business inputs and services, the Legislature needs to put a stop to the special exemptions while also constraining the future ability of local governments to raise rates.

A tiny tax cut passed as we head into an election year with a massive budget service may or may not be good politics, but it certainly isn’t enough to address the fundamental problems with New Mexico’s GRT.

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 Legislature Notable News Research Tax and Budget Taxes Top Issues

New Mexico falls further behind in latest economic freedom report

According to the 2021 edition of the Economic Freedom Index of North America report from the free market Canadian think tank Fraser Institute, New Mexico, in calendar year 2019 (the first year of the Lujan Grisham Administration), slid from 42nd (in last year’s report which used data from the final year of the Martinez Adm.) down to 46th.

While New Mexico has long lagged its neighbors and most of the nation in economic freedom, the 2019 legislative session saw a massive uptick in government spending, tax hikes, newly-imposed regulations, and numerous other policies that make New Mexico less business-friendly. All of New Mexico’s neighbors are among the most economically-free states in the nation.

Not surprisingly, most economically-free half of jurisdictions have higher incomes than do the least economically-free jurisdictions like New Mexico. It is not surprising that New Mexico is among the most impoverished states in the nation.

New Hampshire, Tennessee, Florida, and Texas, were among the MOST economically-free states in the latest report (full rankings below) while California and New York were among the few states that trailed New Mexico. Click on the image below for the FULL report:

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

Santa Fe New Mexican op-ed: An energy crisis looms in New Mexico

The following appeared in the Santa Fe New Mexican on October 24, 2021.

Western Europe is facing an energy crisis this winter. Prices have skyrocketed. Natural gas is 400 percent higher than the start of 2021 while coal is up over 300 percent.

As if high prices weren’t enough of a problem, 40 percent of the natural gas that Europe uses comes from Vladamir Putin’s Russia, an unreliable supplier to say the least.

New Mexicans should take heed. Thankfully, despite the Biden Administration’s permitting ban on federal lands (since invalidated by a judge), New Mexico has steady supplies of oil and natural gas.

Those supplies help protect us from wild price swings and supply disruptions like those that could cause massive economic pain and human suffering in Europe this winter.

While we’ll be fine this winter, New Mexico’s largest utility is facing serious challenges finding enough electricity by next summer.

Due to the Energy Transition Act of 2019 which forms the cornerstone of Gov. Michelle Lujan Grisham’s “Green New Deal” agenda, the San Juan Generating Station is slated to be permanently shut down next June during the hottest part of next summer.

PNM executives have stated clearly that the hunt for “renewable” power to replace San Juan Generating Station is not going well. Even in the best of circumstances “renewables” like solar and wind are inconsistent and require backup like batteries, but the pandemic has hit supply chains hard and projects are being delayed.

Unless Gov. Lujan Grisham acts quickly to keep San Juan Generating Station open, the plant will be taken offline as scheduled this summer and blackouts and brownouts could be the result. If you don’t believe me, Tom Fallgren, PNM’s vice president of generation told the Public Regulation Commission recently, in discussing the possibility of brownouts and blackouts said, “Am I concerned? Yes. Do I lose sleep over it? Yes. Can we solve it? Yes.”

He further noted that PNM practices for scenarios, such as brownouts, have detailed procedures to handle them and prioritize power for places such as hospitals.

Finally, Fallgren noted, “We are looking at any and all options. … And we continue to beat the bushes, so to say, for other opportunities as well.” Are you feeling reassured? I’m not. Interestingly enough, PNM continues to reject new natural gas-powered resources in New Mexico as replacement supply.

Even if we escape serious power outages this summer, the issue is not going away. In fact, it will only get worse. In 2023 and 2024, PNM is abandoning its leases for power from Palo Verde (a nuclear power plant in Arizona), and by the end of 2024, PNM will no longer receive power from the Four Corners plant, yet another coal-fired plant here in New Mexico.

Ironically, as has been discussed in PRC hearings, the Navajo Tribe wants to take over Four Corners plant (saving jobs and tax revenues) while environmentalists are pushing hard to shut it down completely. Regardless of what happens next summer or over the next few years, these are policy-driven decisions made by Lujan Grisham and Democrats in the Legislature. They could have massive implications for New Mexico families.

Already, with the price of everything already going up, New Mexicans’ electric bills rose 5 percent just last year. Those rate hikes will continue to escalate for years into the future regardless of whether PNM or Avangrid is in charge. Wasn’t the Energy Transition Act supposed to hold the line on price increases?

New Mexicans and their elected officials must be aware of the very real problems facing them as June of 2022 approaches. It is not too late to prevent this crisis.

Paul Gessing is president of New Mexico’s Rio Grande Foundation, a tax-exempt organization dedicated to promoting prosperity and individual responsibility.

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

Oil and gas both a blessing and curse for New Mexico

The following appeared on Sep. 16, 2021 at KRWG.

 

 

 

The news that New Mexico’s oil and gas industry has again generated record-breaking revenues for the State was welcomed by policymakers and interest groups alike. But the disconnect between the State budget picture and the economic situation for average New Mexicans could not be starker. And this is one of the “problems” associated with the state’s dependence on oil and gas.

Don’t get me wrong: we at the Rio Grande Foundation fully support the oil and gas industries. The so-called “progressive” Democrats in the Legislature who signed a letter to the Biden Administration earlier this year in support of the Administration’s illegal moratorium on new permits on federal lands definitely believe oil is a curse. We believe that New Mexicans are the recipients of a fabulous gift and that there is no reason for us to be among the poorest states in the nation as is currently the case.

New Mexico is “cursed” by bad politicians, not by its bountiful resources. But those resources all too often prop up bad decisions made by our political leaders. Until voters hold them accountable, New Mexico, blessed as it is by nature, will continue to founder.

Our poverty contrasts with our resource wealth in the same way as the new revenue picture contrasts with the state’s outsized unemployment rate. At 7.6 percent, New Mexico has the 2nd-highest jobless rate in the nation. It is not entirely surprising that our workforce participation rate which measures the percentage of people actually engaged in gainful work, also lags badly.

New Mexico’s poverty rate is high (3rd-worst in the nation) and according to the US Census Bureau the state badly lagged its region in population growth over the past decade. We were named the number one “economically-failing” state another recent report and the “progressive” Voices for Children’s own report ranks us a dismal 49th.

It’s not a lack of money or government spending. Government in New Mexico is already bigger than it is in our neighboring states by quite a bit and our faster-growing neighbors spend much of their money on state/local government than we do. It is anathema to New Mexico’s “progressives,” but it is time to return a healthy chunk of this surplus to the private sector.

The low-hanging fruit and an absolute “must” for the 2022 legislative session is reform of our state’s onerous, business-killing, and regressive Gross Receipts Tax (GRT). This regressive tax directly and unnecessarily impedes the growth of small businesses in our state. Reforming the GRT to eliminate taxes on business inputs is a must this session. It can be done with relatively minimal revenue reductions, but, reducing high GRT rates would be a welcome move.

Social security tax reform has also been discussed in recent years. The tax brings in approximately $85 million annually. Eliminating it would make New Mexico a more attractive destination for retirees.

Finally, while it is a bit of a stretch for such a left-leaning body, New Mexico could do a lot to make itself more attractive as a business destination by simply doing away with its corporate income tax. The tax generates about $130 million annually or about 1/10th of next year’s surplus. This is eminently “do-able” and when combined with long-overdue GRT reform would go a long way to getting New Mexico’s economy moving again.

New Mexico’s Democrat-controlled legislature has a once-in-a-generation opportunity to use this windfall to diversify New Mexico’s economy. If they fail, voters must hold them accountable.

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 Legislature Notable News Top Issues

Las Cruces Sun-News piece: Back to school brings big challenges in New Mexico

 

 

School has begun for most New Mexico students. While every school year is different, this year is certainly more different than most. For starters, students are returning to “semi-normal” classrooms after 1.5 years of remote learning and relative chaos. Unfortunately, as of this writing schools in Rio Rancho, Carlsbad, Los Lunas, and Roswell have “temporarily” had to again go “virtual.”

Lost classroom time has had a big impact on academic outcomes for New Mexico students. According to the Legislative Finance Committee, the Legislature’s “in-house” think tank, K-12 students in New Mexico have fallen behind anywhere from six months to two years. Furthermore, lost classroom time will widen existing learning gaps, particularly for low-income families.

Many New Mexicans likely assume that students across the nation, not just in New Mexico, spent most of the 2020-2021 school year doing remote learning, that is not the case. According to the Burbio website which tracks various COVID-related policies, Utah students spent more than 80% of the year in their classrooms last year and Colorado students were in their classrooms nearly 65% of the time. New Mexico students were in their classrooms only about 33% of the time. According to Burbio, New Mexico students lost more classroom time than students in all but five other states last year.

Even prior to COVID, we knew that New Mexico students perform worse than students in virtually any other state. Catching up from both the preexisting learning gap and the one created last year is going to be a serious challenge. Unfortunately, New Mexico’s Public Education Department (PED) is in chaos. After just 2.5 years in office, Gov. Lujan Grisham is now on her 4th Education Secretary with the recent departure of Ryan Stewart.

At a July LFC meeting several legislators and tribal leaders raised some difficult questions about the ability of the State’s education system as it currently exists to improve student outcomes.

These were not Republicans who have long been frustrated by the growing K-12 budgets absent improved results. Rather, Democrat Rep. Derrick Lente (Sandia Pueblo) expressed concern for Native American students saying they, “have been left to rot because of where they come from” for many years. How much longer do our children have to fail for us to get this right?” Lente continued.

Another powerful, “progressive” Democrat (just named to the 2nd-highest position in the House) Rep. Javier Martinez, D-Albuquerque said he had, “started to question whether more money is actually needed beyond what we’ve invested. I think we’re losing steam,” Martinez said, “I’d hate to be back here in 20 years talking about how nothing has changed.”

To say that we at the Rio Grande Foundation concur with these legislators’ concerns would be an understatement. We have long held that robust reforms including both increased choice and accountability are critical to improving New Mexico’s educational performance.

Of course, talking about a problem and taking action to solve it are two very different things. In this year’s 60-day legislative session several “school choice” bills were introduced only to be killed immediately.

Will the upcoming 2022 session be different? That is ultimately up to voters. Across the nation school choice is spreading rapidly in states where education policy is not controlled by unions. Unfortunately, New Mexico’s Legislature is not one of those states. School board elections are coming this fall. If you are concerned about education policy in New Mexico, educate yourself on school board candidates and vote this November. The Rio Grande Foundation’s sister organization Opportunities for All Kids New Mexico www.oaknm.org is currently surveying school board candidates and publishing the results online.

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 Legislature Notable News RailRunner Spaceport Top Issues

New Mexico politics summed up in one handy Trever cartoon

To say that we’re fans of Albuquerque Journal editorial cartoonist John Trever may be a bit of an understatement. But the Sunday cartoon (below) is particularly genius because of its multiple meanings about the way New Mexico politics and policies work.

  1. Private success vs. Public sector failure: While we have certainly criticized Bill Richardson’s decision to build a $200+ million Spaceport for Richard Branson, in the bigger picture both Bransons’ and Bezos’ successes are achievements for the private space industry. New Mexico’s schools are overwhelmingly government-run and funded. It would be nice if those who are rightly frustrated by the failures of this system would join us in focusing their efforts on bringing private sector competition and competence to bear on the difficult challenge of improving literacy in NM.
  2. A SECOND interpretation of the cartoon is yet another common theme of New Mexico government. Rather than doing the basics (like education) well, elected officials prefer to pursue expensive, high profile projects that really aren’t appropriate functions of government. The Spaceport is one such example, but Mayor Keller’s plans to build a new soccer stadium (with a starting price tag of at least $65-$70 million just to build, let alone property acquisition and inevitable cost-overruns) is another. Again, crime and public safety are crises demanding resources and attention, but Keller would rather build a stadium instead.
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Las Cruces Sun-News column: New Mexico’s COVID-19 response failed on important metrics

This article appeared in the Las Cruces Sun-News on June 27, 2021. With COVID and the Gov.’s COVID policies at last receding, the race is on to determine how effective or ineffective our Gov.’s lockdown policies really were. Our analysis is below:

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RGF’s latest at National Review: Stagnant New Mexico a Case Study in Why Economic Policies Matter

The following appeared at National Review on May 24, 2021.

The U.S. Census Bureau recently released population data showing how the population of America and its 50 states had shifted between 2010 and 2020. As has been the case for decades, Midwestern “Rust Belt” states overall lost representation, while fast-growing states in the Southwest gained seats (Texas added two and Colorado one). For the first time ever, California actually lost a congressional seat.

Yet overlooked by the national media in all of this was what can only be described as the impending creation of a population “donut hole” in the otherwise fast-growing Southwest — that is, my home state of New Mexico.

While Utah and Arizona didn’t add congressional seats as New Mexico’s other neighbors Colorado and Texas did, both states saw double-digit population growth for the decade. New Mexico’s population, on the other hand, grew at just 2.8 percent over that period. That puts the state on par with Vermont and just ahead of Maine, at 2.6 percent.

When neighboring Utah grows at 18.4 percent and Texas grows by 15.9 percent — and your own state’s population barely increases — there must be a problem. Hint: It’s not the weather. A variety of factors have been driving Americans to move from the Northeast to the Southwest, including the search of better weather. But New Mexico’s is unparalleled. It is sunnier than Florida and doesn’t have the oppressive 120-degree summer heat of Phoenix. And it really is a “dry” heat without the muggy humidity of Texas.

As if New Mexico’s minuscule 2.8 percent population growth was not pathetic enough, the details are even more troubling. Over the decade, New Mexico, a state with just over 2 million people, gained 103,506 people over the age of 65. Clearly, the state’s weather, inexpensive housing, and unique cultural offerings are attractive to a certain segment of retirees.

But over the same period, New Mexico lost 71,142 people 64 and younger, including 51,382 residents aged 24 and younger. This kind of population stagnation simply isn’t supposed to happen in the booming American Southwest. It is New Mexico’s slowest growth since statehood in 1912; and, to make matters worse yet, analysts believe that New Mexico could lose overall population when this data is collected again ten years from now.

Could New Mexico, with an ethnically diverse, rapidly aging, slow growing population, in some way serve as an early proxy for the nation as a whole? The United States population still grew by 7.4 percent over the last decade. How, then, did a state located right in the middle of the fastest-growing region of the country perform so poorly? More important, what can be done about it?

First, to begin to appreciate the extent of New Mexico’s problems, we must understand its lack of economic freedom. According to the Fraser Institute’s annual “Economic Freedom of North America” report, New Mexico is in the bottom quartile of U.S. states when it comes to the ability of its residents to keep their hard-earned money and face reasonable economic regulations.

All of New Mexico’s fast-growing neighbors are ranked higher. To be sure, this is notable but unsurprising: High levels of economic freedom are strongly associated with increased population growth.

New Mexico’s path to becoming the “sick man of the American Southwest” is complicated. Unlike California, another state with great weather and physical beauty, but terrible public policies, New Mexico has never been the “it” place to be. For its many flaws, California remains the country’s largest state in population, with dozens of the world’s most-recognizable companies headquartered there.

New Mexico has chosen a different path. Not only do we have no Fortune 500 companies headquartered here, but the state possesses only a few publicly traded corporate headquarters. Instead, since the end of World War II, New Mexico’s economy has been based on a combination of massive federal spending and a robust oil and gas industry.

Whereas California has numerous tech companies and their well-off employees to pay the state’s ever-increasing tax burdens, New Mexico remains among the poorest states in the nation. Of course, it shouldn’t be, but like California, bad public policy holds the land of enchantment back.

By any measuring stick, New Mexico is heavily dependent on federal spending. (According to WalletHub, it is more so than any other state.) Outside of Washington’s largesse, oil is New Mexico’s other major industry. Indeed, New Mexico is the third-biggest-oil-producing state in the nation. Depending on the year, it accounts for between 30 and 40 percent of the state’s budget.

One might expect that having two national nuclear labs — along with their highly educated and well-paid employees — would be a ticket to economic prosperity. Add, too, the billions of dollars in annual tax payments and the jobs and economic activity they bring, and it would seem to most outsiders that New Mexico should be the richest state in the region.

But it turns out that having sound, free-market public policies trumps massive federal “investment” and natural-resource wealth. New Mexico’s lack of economic freedom is a direct result of the state’s political leadership not wanting to do the hard work of adopting the free-market policies that would make New Mexico competitive with its neighbors.

It doesn’t have to be this way. With its excellent weather and numerous outdoor and cultural activities, New Mexico remains well-positioned for growth in the years ahead. The state’s fate ultimately lies with the voters who have to decide to elect politicians to the legislature and governor’s mansion who are prepared to enact the free-market policies on which growth depends.

The same is true for New Mexico as it is for California and various other states. Until a concerted effort is made to make the state more attractive as a relocation destination for businesses, it will continue on the same unhappy trajectory. Shedding ourselves of our unseemly title will require dramatic leadership changes. The only outstanding question is whether we’re willing to make it.

PAUL GESSING is president of New Mexico’s Rio Grande Foundation

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New Mexico Special Election Could Further Reduce Pelosi’s House Majority

The following appeared at National Review on May 4, 2021.

national-review-logo | Jennifer C. Braceras

Nancy Pelosi’s majority in the House of Representatives continues to shrink. The recent swearing-in of Republican Julia Letlow of Louisiana has taken the House Democrats’ majority down to 218–212. This means that Pelosi has a mere two-vote governing majority with which to push the Biden administration’s big-government agenda.

The GOP will soon have another chance to reduce Pelosi’s margin for error when voters in New Mexico’s first congressional district (which includes Albuquerque and its environs) go to the polls to elect a replacement for Biden’s newly minted secretary of the Interior, Deb Haaland, a Democrat. Early voting begins today, while Election Day itself is June 1.

The district is classified by many in the national media as a “blue” district that should safely remain in Democratic hands, and as recently as November 2020, Haaland defeated Republican challenger Michelle Garcia Holmes by an overwhelming 58–42 percent margin. The seat was previously held by New Mexico’s current Democratic governor Michelle Lujan Grisham, and before that, now–senator Martin Heinrich, also a Democrat.

But Republicans have faced challenges in candidate recruitment in recent years in this congressional district. The last time they had a truly top-notch challenger was in 2010, when Jon Barela lost just 52–48 to Martin Heinrich, and in 2009 Heather Wilson, a Republican, held the seat, having done so for a decade. With this race being the sole topic of a special election and so much at stake in Washington, this could be a much more interesting contest than outsiders expect.

The candidates to replace Haaland could not be more different. While there is a serious independent contender and the Libertarians technically have major-party status, the Republican and Democrat contenders are state legislators with long histories of voting on important policy issues. Republican senator Mark Moores has been in the New Mexico Senate since 2013. In addition to his prior experience as a staffer for various Republican officeholders Moores played offensive line for the University of New Mexico Lobos.

Melanie Stansbury, on the other hand, was unknown in the state until she ran for the New Mexico house in 2018. Her prior political experience was in the Obama administration’s Office of Management and Budget.

The legislative track records of these two candidates are also drastically different. For starters, Stansbury strongly believes that New Mexicans should have their tax burdens increased rather dramatically.

In 2019, she voted for HB 6, which subsequently became law. Among other provisions, the bill increased taxes on auto sales, imposed taxes on Internet purchases, and increased New Mexico’s personal income tax. Ironically, this tax hike took New Mexico’s top personal income-tax rate from 4.9 percent (set by former Democratic governor Bill Richardson and the Democrat-controlled legislature) and brought it up to 5.9 percent. Moores voted against the tax hike, but it was subsequently signed into law by Governor Lujan Grisham, despite the state having a surplus in excess of $1 billion at the time.

In their most recent legislative session, the New Mexico legislature was back to raising taxes, and Stansbury was more than happy to go along. Despite the COVID-19 pandemic and a state unemployment rate that remains among the worst in the nation, the combined forces of New Mexico’s resurgent oil and gas industry and the massive economic stimuli out of Washington again put the New Mexico budget comfortably in surplus territory.

Nonetheless, Stansbury and other Democrats in New Mexico’s legislature voted for and passed numerous tax hikes. HB 122, which failed after House approval, was subsequently folded into SB 317 and ultimately signed into law. Stansbury voted for the bills both times. The bills increase a tax imposed by the state on health-insurance premiums from 1 percent to 3.75 percent — a tax increase of 275 percent. Moores voted against the tax hike.

As if that were not enough to illustrate the stark difference between these candidates, Stansbury joined her Democratic colleagues in the New Mexico House to push even more egregious tax legislation in the form of HB 291. This bill which passed the House with Stansbury’s support would have again increased New Mexico’s personal income tax, this time to 6.5 percent, but (more problematically) would have revised the state’s personal income-tax structure to make the higher tax rates kick in at much lower income levels than under current law.

On top of this, the proposal Stansbury endorsed would have allowed property-tax assessments to increase by up to 10 percent annually if the property was not occupied by the owner. The current cap in New Mexico limits annual increases to the already-substantial rate of 3 percent per year. The measure was intended to target Texans with second homes in New Mexico, but it would have applied to apartment and condo dwellers as well.

Fortunately for New Mexicans, cooler heads prevailed in the (also Democrat-controlled) Senate Finance Committee, which eliminated the tax hikes from HB 291 before the bill passed into law.

These are just the tax hikes endorsed by Stansbury in her three short years in the New Mexico legislature. During her time in office, she has voted to ban local governments from enacting “Right to Work” laws on the local level, and she voted for New Mexico to abandon the Electoral College, saying instead that it should dedicate its five electoral votes to whatever candidate won the popular vote. The latter would have dramatically diminished what influence small-population New Mexico has in presidential races for no benefit aside from her ideology.

Stansbury is a true big-government radical. Her advocacy of big government in the New Mexico legislature places her to the left of Nancy Pelosi. At a time when every race matters in a closely divided U.S. House, conservatives cannot ignore this special election in a “blue” but winnable district.

 

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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