Category: Notable News

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Education Legislature Notable News Top Issues

Op-ed: Kids Count Report … A Wake-Up Call

The following article appeared in the Las Cruces Sun News and other media outlets on June 30, 2023.

Once again New Mexico is at the very bottom of a list. Kids Count 2023 is compiled by the Annie E. Casey Foundation with distribution and media handled by New Mexico Voices for Children.

While it is not the report Rio Grande Foundation would compile, the 16 variables considered in do highlight issues regarding the well-being of New Mexico children. Sadly, like so many similar reports, the results are not good for our state. What is unique is the positive spin being applied by Voices for Children.

As Voices for Children’s Amber Wallin recently wrote in an opinion piece, “you shouldn’t let the rankings get you down because they don’t tell us how far we’ve come.” We politely disagree and believe that Voices would not have the same sanguine viewpoint if a Republican governor or Legislature were calling the shots.

In 2019 the organization’s then Director James Jimenez said of New Mexico’s 50th ranking, “It is very much a reflection of what happened, and more specifically, what didn’t happen during the Martinez years.”

We took a careful look through this year’s report and found that of the 16 variables, 9 of them got worse while 6 improved (one stayed the same). That is hardly cause for celebration.

Perhaps even more interesting than the overall results is New Mexico’s poor performance in four “COVID-related” indicators. In our view these include:

  • 79 percent of New Mexico fourth graders are not proficient in reading. This number has dropped 4 percent since 2019;
  • 87 percent of eight graders are not proficient in math. This number has dropped by 10% since 2019;
  • New Mexico’s child and teen death rate per 100K worsened by 16 percent since 2020;
  • The percent of youth who are overweight or obese has worsened by 6 percent since 2019-2020.

These four variables (of the 16 in the report) have significant connections to Gov. Lujan Grisham’s COVID lockdown policies that locked our kids out of school for over a year and encouraged New Mexicans to stay inside and isolate themselves from other people.

The good news is that the COVID pandemic is over, as are the Gov.’s restrictions. Sadly, as critics pointed out at the time, the impacts of her policies were clearly going to do more harm than good. Will the kids, especially those from poor families be able to recover? It is hard to say.

What is clear is that after more than four years in office and with the benefit of an unprecedented oil boom, massive spending increases haven’t improved New Mexico’s 50th-place performance. We recommend going a different direction from the government-driven status quo (a status quo that has dominated New Mexico for nearly a century).

Instead of more government programs we can use the oil and gas surplus to reform our anti-business gross receipts tax and then focus on eliminating the anti-work personal income and corporate taxes. Make New Mexico the jobs and economic growth hub of the Americans Southwest and watch as good paying jobs and economic opportunity improve education, social, and economic outcomes for our children and all New Mexicans.

We are a long way psychologically and politically from breaking out of the big-government paradigm, but it is long overdue. After all, it’s for the children.

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 Oil & Gas Tax and Budget Taxes Top Issues

Opinion piece: Don’t get too excited about those rebates

The following appeared in the Las Cruces Sun News and numerous other newspapers on June 18, 2022.

According to New Mexico’s Tax and Revenue Department rebate checks (or transfers to bank accounts) will be going out at any time during the middle of June. At the Rio Grande Foundation we welcome the $500 or $1,000 (depending on single/married filing status). This is especially true at a time when inflation is rising faster than wages.

But New Mexico is in the midst of an unprecedented boom in its oil and gas industry and, while those checks are nice, they are a pittance relative to the windfall being experienced in State government. Worse, unless the Legislature and Gov. take concrete action and soon to diversify the economy, New Mexico will waste this unique opportunity.

First the numbers: according to the Legislature’s analysts, the one-time “cost” of the rebates is $667 million. You may recall that the Legislature began the 2023 session with a surplus of $3.6 billion and spent $1.2 billion of that.

Though new spending was “just” double the amount of the rebates, the reality is that almost all of the money not spent this year will be put into reserves to be spent in the future. That means that more than 80 percent of this year’s budget surplus will ultimately be spent (unless the Legislature enacts some real tax cuts in the 2024 session).

There are a few major points to be made:

  • During her reelection campaign Gov. Lujan Grisham decried Mark Ronchetti’s rebate proposal as a “fiscally irresponsible socialist scheme” and said it would eliminate funding for the state budget. What changed?
  • It is widely acknowledged that New Mexico needs to diversify its economy, but neither more spending nor one-time rebates will do that. When will Lujan Grisham and Democrats in the Legislature get serious about making New Mexico less dependent on oil and gas?
  • While RGF applauds genuine efforts to diversify the economy, oil and gas revenues show no sign of slowing down. That’s because New Mexico is in a production-driven boom, not a price-driven boom. So, rather than allowing a scarcity mentality to drive tax cut and tax reform decisions, policymakers should understand that strong revenues are here for the foreseeable future and should be used to get New Mexico out of its unnecessarily impoverished state.

Like all New Mexicans we at the Rio Grande Foundation welcome these rebates. What we are looking for out of Lujan Grisham and the Legislature is some kind of coherent economic strategy (besides simply spending more money). It is time to translate our oil and gas wealth into prosperity for ALL New Mexicans. That requires average New Mexicans to engage with and hold this Legislature and Gov. accountable for their policy decisions.

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 Local Government Notable News RGF Events Top Issues

Homeless policy presentation and podcast by Judge Glock

Judge Glock, Director of Research at the Manhattan Institute, is an expert on homeless policy in the United States. On June 14 he gave a presentation in Albuquerque and also sat down with Bob Clark of KKOB radio.

His detailed slides can be found here: Homeless Presentation. 

His conversation w/ Bob Clark is below:

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Education Notable News Top Issues

Remedial Lessons in Public Records Needed?

The following article by William Patrick Leonard, senior fellow with the Rio Grande Foundation, was published in the Santa Fe New Mexican on 6/4/23.

According to the state Attorney General’s Office, “The Inspection of Public Records Act is intended to provide the public with access to information on governmental affairs. The law requires public access to virtually all public records with a few exceptions. Most records are available for public inspection.”

Early responses were encouraging. One research institution responded within three days. Three comprehensives and one research institution sent the requested data within two weeks. All were com- plete, although varying in format. New Mexico Highlands and UNM were non-compliant. The latter quickly denied my request, claiming an exemption from an Attorney General’s Office finding in an unrelated municipal case.

The following briefly describes how New Mexico’s public research and comprehensive universities responded to a request for data.

I appealed, noting that its rationale was flawed. Highlands was more evasive. Initially, I was redirected to other officers within the institution. Finally, I was advised that the officer responsible was off campus and unavailable to respond. My subsequent attempts failed.

I requested the number of first- time, full-time fall 2017 through 2021 New Mexico enrollees required to take between one and four remedial courses; the number completing that fall term; and the number enrolling in the subsequent spring term.

The two institutions employed different noncompliance tactics. Both appeared to have the same goal: wear the requester out. Follow- ing the Public Records Act, I sought the state’s Attorney General Office’s assistance. Some communication between the agency and Highlands led to a response that it did not have any enrolled students required to register in remedial coursework.

I first filed a public information request form with the listed custodians at the state’s public universities — Eastern New Mexico University, New Mexico Highlands University, New Mexico State University, New Mexico Tech, Northern New Mex- ico College, the University of New Mexico and Western New Mexico University suggested otherwise.

Highlands does enroll probationary and non-degree students. Further, its catalog lists a course, “English Reading and Writing for Inquiry. This course offers instruction and practice in college-level critical reading and writing skills. It is designed to give students experienceand practice developing academic inquiry needed for much of their course- work.

While the data sought likely exists, it appears to be secret. Why the institution did not reveal its current policy remains unanswered. The Attorney General’s Office appears to haveclosed the case.

The AG’s approach to UNM, cit- ing the cover of an unrelated municipal case, has remained unresolved.I was informed that it had queried the institution and referred its response to the attorneys.Three subsequent requests for the resolution to the AG’s Office have yet to receive a response.

Five of seven relatively prompt responses suggest my request did not pose major assembly or confidentiality issues.My experience indicates the Inspection of Public Records Act’s measured enforcement facilitates selective noncompliance.

Why fight the law? The prompt response from five of seven does not suggest resource issues. Perhaps the data sought challenges a desired public image. Since the data sought focuses on the graduates of New Mexico’s primary and secondary schools,any embarrassment should be rested.

Revoking the law has been advanced. It would only lead to lengthy and costly lawsuits.A more reasonable solution would include timely and consistent compliance and enforcement.

William Patrick Leonard is a senior fellow with the Rio Grande Foundation.

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Economy Legislature Notable News Top Issues Videos

KOAT-TV covers RGF workforce participation rate analysis

The Rio Grande Foundation recently analyzed workforce participation data for New Mexico and its neighboring states. Separate data from New Mexico’s Legislative Finance Committee was also discussed in the post.

This attracted the attention of KOAT Channel 7 which did an excellent report on RGF’s data and analysis including discussing the data with a UNM economist who added his cogent thoughts. Check out the KOAT report here.

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Education Notable News Taxes Top Issues

Opinion piece: Legislature’s 529 expansion a positive step for New Mexico

The following appeared in the Roswell Daily-Record on May 21, 2023.

The 2023 New Mexico legislative session was generally disappointing for New Mexicans who wish to see much-needed K-12 education reform. However, it was not a total loss. In fact, one bill did pass that could help thousands of New Mexico families pay for educational options that work best for them. Without a single “no” vote during the 2023 session, HB 342 will soon be the “law of the land.”

The bipartisan bill was sponsored in the House by Republican Minority Leader Ryan Lane and by Democrat Majority Leader Peter Wirth in the Senate. It was signed into law by Gov. Lujan Grisham, also a Democrat. HB 342 aligns New Mexico law with federal law as updated during the Trump Administration and recent legislation under the Secure 2.0 Act.

Over the years Congress has expanded the use of 529 plans to pay for kindergarten through 12th grade tuition and included student loan repayment and apprenticeship program expenses. And in 2023, Congress added a provision to allow rollovers of unused 529 plan funds into a Roth IRA for the beneficiary.

Starting on June 16 when this new law takes effect, New Mexico families will be able to deduct any contributions to their New Mexico sponsored 529 account that will be used to pay for up to $10,000 annually (per-child) on tuition expenses at an elementary or secondary public or private school (making them “qualified” expenses under New Mexico law).

Originally created to help families save for college, 529 plans have been helping families do that for years and will continue to do so into the future. For New Mexico residents, features include the fact that 100 percent of contributions to New Mexico’s plans are deductible from state taxable income in the year contributions were made to the account. If the account owner is a resident of New Mexico, then earnings and withdrawals from their 529 account are also exempt from state taxation.

New Mexico’s educational woes have been well-documented in numerous analyses. Families who are considering 529 plans or if they already have such a plan and want to know more about the latest changes can find out more at The Education Plan website https://theeducationplan.com. The Education Plan is New Mexico’s state-sponsored 529 education savings plan.

The website is informative and Rio Grande Foundation has undertaken its own efforts underway to educate New Mexicans, but it is up to families to either find this information for themselves or talk to a financial advisor.

If you have a child for whom the existing K-12 system is not working and you are considering the financial challenges of paying for school (in addition to the taxes you already pay to fund the schools), you should strongly consider looking at using a 529 plan.

This is especially true since the original purpose of 529 plans may not be as critical as in the past. That’s because many college costs in New Mexico are now covered thanks to the State’s “Opportunity Scholarship” program for “free” college. While nothing is truly free, the prospect of college being heavily subsidized by New Mexico taxpayers may change the financial equation for some New Mexico families who no longer need to prioritize saving for college and instead can use their 529 plan for K-12 tuition at a non-public school.

The Rio Grande Foundation has long been a proponent of increasing the educational options available to New Mexicans. While much work is to be done to improve educational options for families, we are pleased that New Mexico’s Legislature is allowing families to maximize the benefits of 529 plans for K-12 students. It is critical for parents of school-aged children to educate themselves on the benefits of these plans.

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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Notable News Top Issues

Farewell to some friends of liberty

There are many people who we work with and who support liberty in New Mexico who too often go without being recognized. Sadly, the Rio Grande Foundation recently lost three such people who all helped the cause of liberty in their own ways:

Frank Bird was a board member and supporter of the Rio Grande Foundation. He was a former New Mexico legislator and had a long career with IBM as well.

Colin Hunter was an attorney who represented the Rio Grande Foundation in various legal cases over the years.

Joe Loisel was a Retired Army Col. Joe Loisel. Joe was very active in various military auxiliary groups and was a supporter of the Rio Grande Foundation.

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility

 

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

Opinion piece: New Mexico’s misguided approach to economic development

The following opinion piece appeared in Las Cruces Sun News and other papers recently.

In her message in which she explained her veto of large portions of the Legislature-passed tax bill, Gov. Lujan Grisham wrote, “Although HB 547 has many laudable tax reform measures, I have grave concerns about the sustainability of this tax package as a whole.”

She wrote this while the State of New Mexico sits on a $3.6 billion budget surplus thanks to oil and gas revenues (a boom that shows no signs of slowing down). She also signed a 14 percent budget increase which grew the size of government by $1.2 billion and included everything from increased film subsidies to $10 million for an abortion clinic primarily to serve Texans. Last year’s budget increase was over 13 percent as well.

The “tax reform” effort in Santa Fe got off to a bad start when the House didn’t seriously attempt to reform the unfair and job-killing “pyramiding” of the gross receipts tax. That “original sin” of New Mexico tax policy (reform of which was supported by the Gov.) should have been the Legislature’s top priority. It clearly was not, and it was never included in any version of the bill.

Worse, instead of just cutting taxes, both houses of the Legislature sadly included tax increases in versions of the bill including the final version. Raising taxes is inexcusable with a $3.6 billion budget surplus. Worse still, the tax hikes included anti-economic-growth policies like imposing two new top rates on personal income and increasing both capital gains and corporate income taxes.

Each of these tax hikes would have done great harm to our economy. The Gov. was right to veto them. Gov. Lujan Grisham’s tax policy agenda is hardly above reproach, however. The Legislature initially planned to reduce the GRT by 0.5 percentage points. This should not be mistaken for reform, but it is much better than nothing. Reducing the GRT also fits nicely with “progressive” economic policy goals as the GRT is a classic “regressive” tax meaning that poor pay a higher percentage of their incomes on it.

But, in the waning days of the session as the Gov. expressed concerns about the size of the tax package legislators adjusted the package by phasing-in the gross receipts tax reductions “to make room for” the film subsidies which had been added during the legislative process.

It would be hard to come up with worse tax policy than delaying broad-based tax relief to pile even more generous subsidies on top of those already given to a favored special interest (Hollywood).  Adding insult to injury these GRT rate reductions were vetoed by the Gov. while film subsidies were left intact.

The best that can be said for tax package is that New Mexicans will get one-time rebates and medical doctors will no longer be taxed on deductibles and copays.

Watching the many twists and turns of the tax bill in the 2023 session highlighted that New Mexico’s political leadership simply does not understand basic economics. Given their ignorance, it is no wonder New Mexico performs so poorly economically. And it’s not just the Gov.’s vetoes, but the Legislature’s approach which was misguided from the start.

Economically, the 2023 session was a big disappointment. But, unless something dramatic happens, the State will likely again be awash in oil and gas revenues when the 30-day session rolls around next January. Can the Legislature and Gov. come up with a real tax reduction plan that will diversify our economy and move New Mexico out of last place?

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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Constitution and Criminal Justice Local Government Notable News Top Issues

RGF comments on DOJ update w/ Albuquerque Police Department

Rio Grande Foundation president Paul Gessing sat down with TJ Wilham of KOAT Channel 7 recently to discuss the lack of progress in getting the City out from under the Department of Justice consent decree and the high cost of paying independent monitor James Ginger.

Full story here.