With renewal of a gross receipts tax on the ballot in several northern New Mexico counties (Los Alamos, Rio Arriba, Santa Fe and Taos) to fund the Rail Runner and related services, the Rio Grande Foundation requested updated annual ridership information.
After years of decline and despite an improving New Mexico economy, ridership on the train again declined dramatically between FY 2017 and FY 2018. In FY 2017 835,561 rode the Rail Runner while that number dropped to 787,116 by FY 2018. That’s a decline of 5.8%.
Since FY 2010 ridership on the Rail Runner has dropped an astonishing 36.55%.
As Rio Grande Foundation president Paul Gessing pointed out, “Mass transit ridership across the country is collapsing. The Rail Runner is no exception. Unfortunately, the train never made sense in the first place and, despite lower unemployment in New Mexico and a recovering economy, the Rail Runner continues to lose popularity. Refinancing the train doesn’t make it any more viable for New Mexico commuters.”
Albuquerque, NM—New Mexico is tied for 42nd among the 50 states in this year’s Economic Freedom of North America report, released today by Rio Grande Foundation conjunction with Canada’s Fraser Institute.
Last year, New Mexico was tied for 47th.
As Rio Grande Foundation president Paul Gessing noted, “New Mexico has seen modest improvement in economic freedom, but has a long way to go to catch up to its freer, more economically-prosperous neighbors before it becomes a destination for jobs and prosperity in the American Southwest.”
This year, Florida has surpassed New Hampshire as having the highest level of economic freedom among all U.S. states. It scored 7.87 out of 10 in this year’s report, which measures government spending, taxation and labor market restrictions using data from 2016, the most recent year of available comparable data.
“The freest economies operate with comparatively less government interference, relying more on personal choice and markets to decide what’s produced, how it’s produced and how much is produced. As government imposes restrictions on these choices, there’s less economic freedom and less opportunity for prosperity,” said Fred McMahon, the Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute and report co-author.
Rounding out the top five freest states are New Hampshire (2nd), Texas (3rd), Tennessee (4th) and South Dakota (5th). For the fourth year in a row, New York was ranked least free (50th), followed by Kentucky (49th), West Virginia (48th), California (47th) and Alaska (46th).
The report also includes an additional all-government ranking, which adds federal government policy to the index and includes the 50 U.S. states, 32 Mexican states and 10 Canadian provinces.
From 2004 to 2013, the average score for U.S. states in the all-government index fell from 8.24 to 7.66, but increased slightly to 7.9 out of 10 this year, driven largely by changes at the federal level.
In the most-free states, the average per capita income in 2016 was 7.3 per cent above the national average compared to roughly 10.5 per cent below the national average in the least-free states.
“The evidence is clear—lower levels of economic freedom lead to less prosperity, slower economic growth, less investment and fewer jobs and opportunities,” said Dean Stansel, economics professor at Southern Methodist University and co-author of the report.
The Economic Freedom of North America report, also co-authored by José Torra, the head of research at the Mexico City-based Caminos de la Libertad, is an offshoot of the Fraser Institute’s Economic Freedom of the World index, the result of more than a quarter century of work by more than 60 scholars including three Nobel laureates.
New Mexico’s most significant improvement occurred in the area of government spending.
Economic Freedom of North America measures the degree to which the policies and institutions of countries support economic freedom. This year’s publication ranks 92 provincial/state governments in Canada, the United States and Mexico. The report also updates data in earlier reports in instances where data has been revised.
The Rio Grande Foundation is a research institute dedicated to increasing liberty and prosperity for all of New Mexico’s citizens. We do this by informing New Mexicans of the importance of individual freedom, limited government, and economic opportunity.
Our state’s system of taxpayer-funded higher education is in crisis. A few key facts about postsecondary institutions in the Land of Enchantment, and the University of New Mexico in particular, reveal the depth of the problem:
• New Mexico spends quite a lot on its government colleges and universities. According to the state Higher Education Executive Officers, the “national association of the chief executives of statewide governing, policy, and coordinating boards of postsecondary education,” we spend $9,348 per full-time equivalent enrollment. That sum is far in excess of the national figure of $7,642, despite the state’s low cost of living. On occasion, brave voices have acknowledged the system’s spendthrift ways. In 2016, former UNM President Chaouki Abdallah told the Albuquerque Journal: “Our higher ed spending is more than most other states; the trouble is we don’t spend it wisely and (we) spread it across so many entities.”
• Enrollment at several of the major institutions is dropping. It’s fallinal reported that UNM enrollment dipped “2.9 percent from the fall of 2016 to the fall of 2017 and has dropped a cumulative 9.3 percent since its 2012 peak.”
• New Mexico has a plethora of branch campuses – including five for UNM alone. A 2017 investigation by the Legislative Finance Committee found that, in all, “New Mexicans have approximately 77 physical points of access to higher education throughout the state.”
• UNM, using data from the College and University Professional Association for Human Resources, has documented the need to raise salaries in order to keep compensation competitive. The university’s president has lamented the phenomenon of junior faculty being “often picked off before we can even get them into the tenure process.”
• UNM’s sports programs operate at a deficit, and plans to cut women’s beach volleyball, men’s soccer, and men’s and women’s skiing have generated outrage and opposition from both candidates for governor.
The fact that both candidates for governor expressed opposition to the decision to cut sports at UNM is not surprising. That is the populist opinion. Talking about limits and priorities is never fun, but it’s even tougher with a $1.2 billion state surplus.
Regardless, the issue of athletics is merely a microcosm of UNM’s broader problems: As much as it may try, it simply can’t be everything to everybody. At the very least, branch campuses should be on the cutting block, but not one politician seems interested in taking on that tough reform, because having a branch campus is what passes for “economic development” in too many struggling rural communities across our state.
Cutting back on UNM “sprawl” would free up money to offer faculty more competitive pay. It would also enhance the university’s standing as an institution that attracts top-notch faculty. Again, former UNM president Abdallah had his finger on the pulse of the problem when he noted that while his institution had “spires of excellence, best in the world or top five,” like everything else around this state, the average is bad because you have to make sure everyone is taken care of.
Abdallah’s assessment applies to sports, as well. A bold move to eliminate the costly – both financially and in terms of scholarships – football program would have freed resources within the athletic department to focus on other high-performing sports, such as basketball, which has always had a passionate following. It is difficult to say what overall impact the elimination of the four sports will have or whether it will even “stick.” After all, the easiest solution in New Mexico is always to throw more money at the problem.
A recovering economy, based largely on the oil boom in the Permian Basin, cannot mask the reality that all is not well at the state’s flagship government university and that significant reforms are badly needed at UNM and throughout the higher-ed system. Unfortunately, unless apathy and the status quo are replaced by a realization that meaningful reform is needed before the next economic/fiscal crisis hits, mediocrity – in academics, athletics and return on taxpayers’ dollars – will prevail.
Dowd Muska is research director for the Rio Grande Foundation, 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.
(Albuquerque, NM) — The Rio Grande Foundation, New Mexico’s free-market think tank, has launched the first podcast focusing exclusively on public-policy and political issues in the Land of Enchantment.
The podcast will be released twice a week, with each show lasting between 20 and 30 minutes.
“Tipping Point New Mexico: The Podcast” will cover policy and political issues of particular interest to citizens of the Land of Enchantment. It will feature interviews with important thought and business leaders from New Mexico and around the nation.
Episodes will be released every Tuesday and Thursday, and they will be posted on the Foundation’s websites www.riograndefoundation.org and www.errorsofenchantment.com. “Tipping Point New Mexico: The Podcast” will soon be available on major social-media platforms, such as iTunes and Stitcher.
“To our knowledge there is currently no other regular podcast dealing with New Mexico public-policy issues or politics,” said Rio Grande Foundation President Paul Gessing. “We intend to fill the void while also providing timely, well-informed content from the free-market perspective.”
Listeners who have useful information — or an important story to tell New Mexicans — can reach the Foundation at email@example.com. In addition, radio stations, news outlets, and bloggers are welcome to use “Tipping Point New Mexico: The Podcast” content.
The first podcast posted covered New Mexico’s primary elections which were held earlier this month. The second explains what Rio Grande Foundation is and outlines the history of the organization.
“We’d like to thank Path Three Marketing’s Wally Drangmeister for his assistance in getting ‘Tipping Point New Mexico: The Podcast’ up and running,” Gessing said. “His knowledge, experience, and professionalism have been invaluable.”
Those “ill-equipped” students usually must take remedial classes even before embarking on their higher academic studies. According to the Legislative Finance Committee (LFC), on average only 17 percent of students who take only one remedial course in college graduate within six years. Matriculants who are not required to take remediation present a 77 percent graduation rate.
As Leonard notes in his brief, no one benefits when students fail to complete their studies in higher education. Students themselves see limited earnings gains despite years and thousands of dollars invested. And, the schools and taxpayers divert resources to serve a group of students that is simply not prepared for additional educational attainment. A 2013 report pegged the total cost of remediation at $22 million.
According to Leonard, the best and most obvious reform is to simply demand that New Mexico’s “Comprehensive” universities impose somewhat more stringent standards that reduce the numbers of students entering the institutions in need of remedial classes.
Additionally, Leonard contemplates the role of New Mexico’s failing K-12 system including the use of “social promotion” that gives many graduates of New Mexico’s K-12 schools the misguided notion that they have actually mastered high school academics.
(Albuquerque, NM) – The Trump Administration failed in its efforts to completely repeal the health care law known as “ObamaCare.” Aside from the individual mandate which was repealed in separate tax reform legislation, the health care law remains relatively intact.
Nonetheless, state-level policymakers still have numerous reform measures that can be adopted to make health care work better. Often, those “levers” are available to state-level policymakers although some policy changes can be expedited and assisted with a more flexible administration in Washington.
A new policy brief by Roger Stark, By Roger Stark, MD, FACS, Adjunct Health Care Policy Analyst at the Rio Grande Foundation outlines in detail some of the ways in which New Mexico’s leaders could positively impact both the State budget and health care outcomes alike. The paper is available here.
While the federal health care law improved access to insurance, particularly in rural communities it can be a challenge to find practitioners, especially specialists. New Mexico has the highest percentage of births to moms on Medicaid, and the Medicaid systems is a large and growing burden on the State of New Mexico’s finances.
A few of Dr. Stark’s specific reform ideas include: Enact tort reform to reduce wasteful medical expenses, Expand and promote the use of association health plans, promoting telemedicine, and reforming scope of practice and professional licensing laws.
Stark will present these and other ideas at a presentation sponsored by the Rio Grande Foundation at the Marriott Pyramid on April 18, 2018 at a luncheon that will take place from 12 to 1pm. Seats are still available and can be reserved by clicking here or calling the Foundation at: 505-264-6090.
(Albuquerque, NM) – In 2016, New Mexicans overwhelmingly approved a constitutional amendment to reform bail in the Land of Enchantment. But changes to the pretrial process remain controversial in the state, with Governor Susana Martinez expressing a desire to completely repeal the amendment.
In a new policy paper, Rio Grande Foundation researchers explain why the governor’s recommendation is unnecessary. “Mend It, Don’t End It: Reforming Bail Reform in New Mexico” summarizes why the state embraced alterations to the pretrial process, how bail has been changed since November 2016, and how common-sense measures can be adopted to make the system more effective for both defendants and the taxpaying public.
“Mend It, Don’t End It: Reforming Bail Reform in New Mexico”:
Revisits the deficiencies of the preexisting pretrial process, which former New Mexico Chief Justice Charles W. Daniels upbraided for allowing “dangerous defendants … [to] buy their way out of jail if they have access to the money required to secure their presumption of innocence,” while keeping “large numbers of poorer defendants who are neither dangerous nor flight risks … in jail simply for lack of money.”
Lists several bail-reform success stories, including those in New Jersey; Washington, D.C.; Lucas County, Ohio; and Travis County, Texas.
Recommends several fixes to the New Mexico Supreme Court’s rule implementing the constitutional amendment – alterations that would build on the many strengths of the new pretrial reforms already enacted, and be guided by similar reforms elsewhere.
“Mend It, Don’t End It: Reforming Bail Reform in New Mexico” was authored by Rebecca Ralph, a former New Mexico prosecutor who serves as a senior fellow in legal studies at the Rio Grande Foundation, and D. Dowd Muska, the Foundation’s research director.
“This paper makes an important contribution to the current debate,” said Rio Grande Foundation President Paul Gessing. “While critics are right to point out some of the mistakes made in the revamp of our state’s pretrial process, the solution is to improve, not scrap, bail reform in New Mexico.”
(Albuquerque, NM) – Tax reform is shaping up to be a top issue during the 2018 legislative session. The Rio Grande Foundation has supported the basic concept of reducing rates and removing exemptions from the gross receipts tax (GRT) as outlined by Rep. Jason Harper, but there are other options including a “tax reboot” plan put forth by Sen. Bill Sharer or simply doing nothing (to name just two).
Also, how do New Mexico’s various tax rates and burdens (on incomes, property, and excise taxes on consumer goods) compare to other states? Given New Mexico’s economic woes, how obvious is it that the GRT drives many of our State’s economic challenges? If the GRT is a leading cause of our woes, what causes the problems?
How does the process of “pyramiding” negatively impact our State? Could the current system be costing New Mexico millions of dollars in tax revenues?
Lastly, how do the various reform options stack up both in terms of their economic impact as well as their political chances of being adopted in politically-split Santa Fe?
Said Gessing, “The US economy is strong and growing quickly. Federal tax reform could bring the strong economic growth our country has not seen for decades. Combine that with long-overdue reform of New Mexico’s broken gross receipts tax the Land of Enchantment could at last shake loose of its decade-long economic malaise.”
With the Legislature having allocated $400,000 to fund a study on the issue (despite budget challenges), there is clearly significant bi-partisan support for reform. The major question is how. Rio Grande Foundation urges the Legislature to consider real, revenue-neutral reform of a GRT that hinders New Mexico’s economic growth. The information in this brief will be a useful contribution to the discussion.
(Albuquerque, NM) – With the mandatory paid sick leave ballot measure rejected and a mayoral runoff looming, the Rio Grande Foundation is again pressing for policymakers to consider reforms that will improve the struggling local economy.
Numerous data points illustrate the economic challenges faced locally, but the “recovery index” created by Albuquerque Business First shows the economy to be just 81.1 percent recovered from the “Great Recession” which began a decade ago.
Said study author Dowd Muska, “Albuquerque’s next leaders will face tremendous challenges. Although crime is one such challenge, getting the economy on a sound footing is equally important and more easily achievable.”
The Foundation has previously put forth an array of fiscal reforms, but the latest brief, “Fixing ABQ Economic Development” specifically targets government policies that inhibit economic growth as well as those that are supposed to generate economic growth, but merely shift resources from productive to unproductive uses.
Hold the line on and then start reducing tax rates and burdens;
Overhaul the zoning and permitting processes in ways that provide necessary protections, but are also understandable and concise. ;
Eliminate the local minimum wage and consider adopting a local “right to work” ordinance instead;
Stop using tax dollars, land giveaways, and other incentives to goose economic development. These only shift dollars from tax producers to tax “eaters” and they shift policymakers’ attention away from basic, proven policies.
Policymakers in the City of Albuquerque cannot continue down the same old path of bigger government and overregulation lest it continue to see crime increase and citizens flee to other more economically-dynamic locations.
Adopting even some of the ideas in “Fixing ABQ Economic Development” would provide a meaningful signal to businesses and citizens alike that Albuquerque “means business” about economic growth.
With Democrats on the hunt for higher taxes at both the State and local levels here in New Mexico, it is worth asking just how heavy the State’s tax burden is relative to other States. Conveniently, Key Policy Data which looks at state by state data on taxes and other economic indicators, just published a new series of charts which show New Mexico to have both a heavy and growing state and local tax burden.
As shown in Chart 1, when New Mexico’s state and local tax burden (tax collections divided by private sector personal income) is used as the measuring stick, New Mexico’s tax burden was the fifth highest in the nation for FY 2015 at 18.8 percent—or 31 percent above the national average of 14.4 percent.
Far from being “gutted,” as shown in Chart 2, New Mexico’s tax burden has increased over time by 65 percent to 18.8 percent in FY 2015 from 11.4 percent in FY 1950.
Gov. Susana Martinez will have yet another opportunity to veto tax hikes in the wake of the 2017 special session. Unfortunately, New Mexico’s future could see political leadership that gladly accepts rather than rejects tax increases.