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RGF requests and publishes public payrolls: Part 1: New Mexico Cities

New Mexico cities big and small are required to provide various public records. Unfortunately the process of requesting many of those records is onerous. That’s where the Rio Grande Foundation comes in.

We have requested, received, and published public payroll records for most of New Mexico’s major cities. You can find that information here.

To their credit, a few (typically larger) cities publish their payroll records online. You can find Albuquerque, Las Cruces, Los Alamos, Rio Rancho, and Santa Fe.

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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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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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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 Energy and Environment Notable News Oil & Gas RGF Events Tax and Budget Top Issues Videos

Video of discussion: Kevin Hassett and Paul Gessing Evaluate the Impact of President Biden’s Energy Policy

On Wednesday Feb. 24, the Paul Gessing of the Rio Grande Foundation and Kevin Hassett of the National Review Institute discussed the impact of the Biden Administration’s energy policies on New Mexico. You can watch the discussion which lasts about an hour below:

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Economy Legislature Notable News Tax and Budget Top Issues

While private sector workers lost jobs in droves, New Mexico government employment GREW in 2020

In New Mexico, when politicians talk about “diversifying the economy,” they usually mean “finding new taxes in order to spend more money.”

That’s partially because we have so many state and local government workers (let alone federal employees and contractors). Even a global pandemic can’t stop New Mexico from growing as the map below from The Washington Post shows.

While most other states saw reductions (often major) in state government employment, New Mexico’s already-bloated government workforce grew by 4%. That is tied for the fastest growth in the nation.

Adding insult to injury, while their numbers grew, the Legislative Finance Committee in New Mexico’s Legislature planned to give pay raises to state government employees in the budget currently being discussed in Santa Fe. Gov. Lujan Grisham gave fat pay raises to her inner-circle although (to her credit) the Gov.’s budget DOES NOT have broad based pay hikes.

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Economy Legislature Notable News Tax and Budget Taxes Top Issues

Bill Richardson’s tax cuts WERE a success!

It has now become an article of faith on the left in New Mexico that Gov. Bill Richardson’s 2003 tax cuts were a failure.Several tax hike bills including (at least) two that would raise New Mexico’s personal income tax rate have been introduced this session including:

SB 56: Sen. Bill O’Neill’s bill to increase New Mexico’s top personal income tax rate to 8.2% (the bill was heard in Senate Tax on Thursday);

SB 89: Sen. Bill Tallman’s bill to increase New Mexico’s top personal income tax rate to 6.5%;

You MAY recall that the Richardson cuts took New Mexico’s top income tax rate from 8.2% down to 4.9% over 5 years where it was until 2019. The cuts ALSO cut capital gains tax rates in half. These were REAL tax cuts and they passed the Democrat-controlled House without a single dissenting vote and passed the Senate by a margin of 39 to 2 and were signed into law on Valentine’s Day, 2003.

Richardson and Were Richardson’s tax cuts REALLY a failure? No. In fact, none other than the liberal “fact checking” site PolitiFact said that Richardson’s job creation claims (made in advance of his 2008 reelection campaign) were “mostly true.”

As PolitiFact noted in 2007,

Statistics from the Bureau of Labor Statistics indicate that New Mexico gained 75,800 jobs from December 2002 to July 2007, which is slightly lower than Richardson’s claim.

As our friends at FactCheck.org note in this article , Richardson has consistently cited the higher number, even when the actual number was lower.

For our ruling, however, we’ll rely on the current 75,800 and call it mostly true.

PolitiFact further quoted none other than NMSU economist (one of NM’s top economic gurus) Jim Peach approvingly.

Peach said Richardson’s tax incentives and income tax cuts have created a favorable atmosphere for business that is a stark change from the state’s mentality in the mid-1970s, when state officials refused to provide help to a promising young company named Microsoft.

The climate here has changed considerably since then, Peach said. Bill Richardson has been a big part of that. He’s not the whole story, but he’s been a big part of it.

The fact is that if Richardson were governor today he would be too conservative for New Mexico’s Democratic Party on both guns and taxes.

 

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Economy Legislature Notable News Open Government Tax and Budget Taxes Top Issues

Basic facts as legislative session gets rolling

The following appeared in Las Cruces Sun News on Sunday, January 24, 2021.

To say that this is an unprecedented legislative session in New Mexico is an understatement. After some public debate over how and when the Legislature was going to meet, the Democrats who overwhelmingly control both houses have decided to plow forward with an entirely “virtual” session.

The Roundhouse is closed to the public and if you want to engage with legislators or committees you need to get online and watch, testify, or send emails or calls to their offices. By itself this COVID-related change is both dramatic and problematic.

Then, in apparent reaction to the US Capitol riots of January 6 and the supposed threat of violence at state capitols across the nation, the Roundhouse has been fenced off with dramatically-enhanced security measures implemented to the point that only legislators and staff can get near the facility. We don’t know how long these measures will be in place, but this simply can’t be the “new normal.”

For all its many flaws New Mexico’s Legislature has traditionally been among the most open and accessible in the nation. We have advocated the addition of remote testimony in this vast, sparsely-populated State, but never at the expense of having in-person access completely eliminated during a session.

All advocates for open government must be vigilant in making sure that this crisis not be used to limit open government and transparency in our State.

And then there is the economy. We certainly want New Mexicans to be able to get back to work as quickly as possible. But as the Legislature meets to discuss long-term policy changes in our State we need to agree on a few important facts which undergird our economic situation and have done so for many years.

  • We know New Mexico is an impoverished state. Too many of our citizens and especially young people face hardships in the best of times. Of course, those problems have been worsened by the pandemic and the political reaction to it.
  • New Mexico lacks something called economic freedom. According to an annual report from the Canada-based Fraser Institute, a free market think tank, our State is the 42nd-most free state in the nation. Our neighbors are all much freer. Worse, because data are not available instantaneously the data available are for 2018, Susana Martinez’s last year in office. We have seen a dramatic erosion in economic freedom under the current Administration. Lack of economic freedom has real impacts on people. The study found an 8.1% reduction in median incomes in the least free states.
  • New Mexico’s tax burdens are heavy. Because it is poor and federal taxes are “progressive” many tools claim our State has low taxes. In reality, according to the Federation of Tax Administrators, when ranked as a percentage of personal incomes, New Mexico’s state tax burden is 7th-highest in the nation.
  • Given our heavy tax burden it will come as no surprise that state and local spending is high. In fact, according to com consuming 22.98% of our overall economy, New Mexico governments spend a smaller share of the economy than only West Virginia and Alaska.

During this 60-day legislative session we expect a slew of tax hikes, spending programs, and new regulations to be considered and passed. Unfortunately, those mostly take us even further in the wrong direction and will further make us an island of relatively slow economic (and population) growth and poverty in the American Southwest.

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 Tax and Budget Taxes Top Issues

Some quick facts before the 2021 legislative session kicks off

As the first-ever “virtual” New Mexico legislative session kicks off we believe it is important for New Mexico policymakers to have some basic information about New Mexico’s economy.

  1. New Mexico tax burdens are not low relative to neighboring states. The chart below is from the Federation of Tax Administrators. With far heavier tax burdens than its neighbors, New Mexico’s tax burden ranks 7th-heaviest among states.
  1. According to the website US Government Spending state and local spending in New Mexico is far higher than in neighboring states as a percentage of the state economy (GDP). The data are constantly being updated, but New Mexico consistently has the biggest-spending state and local governments in the US.
  1. When it comes to raising the minimum wage, mandatory paid sick leave, or a variety of other economic policies, New Mexico lags dramatically. The data in the Fraser Institute analysis below is from 2018 which is the final year of Susana Martinez’ time in office. New Mexico desperately needs MORE economic freedom, not less.

4.. We already know New Mexico is among the poorest states in the US. If the Legislature is serious about reducing poverty and improving outcomes for children and the rest of the population (regardless of race or gender) it needs to have a serious conversation about economic freedom issues. like taxes and regulations.

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

Netflix Fueled by Oil and Gas in New Mexico

The following appeared at National Review’s website on December 25, 2020

We have known for decades the extent to which progressives dominate Hollywood. In the age of social media, Hollywood celebrities waste no opportunity to show that they stand with the poor, the downtrodden, and the righteous. But they have a way of showing themselves up as the hypocrites we already know that they are.

Let’s start with “fracking.” Fact: a few years ago, more than 100 Hollywood A-listers signed on to an effort under the banner of Artists Against Fracking to ban hydraulic fracturing. Yet it’s no secret that many of Hollywood’s numerous well-heeled opponents of “fracking” have something of a weakness for private planes and, even in their humbler moments, for large SUVs. It’s not much of an exaggeration to think that some of them probably gobble up more energy in a day than average Americans do in weeks.

But without hydraulic-fracturing technology, oil and gas production in my home state of New Mexico would almost completely dry up. This industry has made New Mexico a major energy producer, a crucial source of revenue and jobs for a state widely recognized as one of the poorest in the country. Fracking has safely opened massive new energy deposits with production concentrated in the Permian Basin, located in southeast New Mexico and shared with Texas. In fact, New Mexico is the third-largest oil-producing state, with over 1 million barrels per day at the end of 2019One-third of the state’s entire budget is generated by the industry.

Too bad. If the nation follows the advice of Hollywood’s anti-fracking activists, a poor state and its poor residents will be denied the benefits of an important natural resource and simply go without. While fracking remains legal (for now) in New Mexico, Hollywood’s hypocrisy goes far beyond merely advocating against this technology: some of its leading companies have found a way to suck up tax revenues right here in New Mexico that would otherwise be spent on public schools, health care, and other government services.

In an effort to attain the glitz and glamour of Hollywood, New Mexico’s liberal politicians are handing out some of the most generous subsidies available anywhere to Hollywood film companies. That those companies tend to lean liberal is, of course, only a coincidence.

Netflix is the latest production company to bring significant operations to the Land of Enchantment. The streaming company recently announced that it would expand its operations in the state, spending an additional $1 billion in New Mexico over the next 10 years.

That sounds good, but however liberal it may be, the entertainment industry is still the entertainment industry, and the deal comes with a catch. Netflix may be spending in the state, but it will also be receiving a very generous incentive from the New Mexico taxpayer, something of an irony when one-third of the state’s taxes are paid by “wicked” oil and gas.

Netflix (like any film company that operates in New Mexico) is eligible to have 25 percent of its expenses reimbursed by the State. Better yet, the length of the company’s ten-year lease means it “qualifies” under state law to receive an increased reimbursement of 30 percent.

Just to be clear, if Netflix does indeed spend $1 billion over the next decade as it asserts, it could be entitled to checks from the New Mexico Treasury totaling $300 million. If 33.5 percent of New Mexico’s budget comes from oil and gas over that time period, Netflix alone will effectively be receiving $100 million directly from the oil and gas industry.

Of course, if the “keep-it-in-the-ground” wing of the Democratic Party prevails and bans fracking on New Mexico’s federal lands, the state’s oil and gas revenues could plummet, forcing the State’s other taxpayers to pick up more of the bill for Netflix or triggering some sort of crisis in its relationship with the company

Unfortunately, when it comes to subsidies for Netflix, $300 million is just the down payment. The state is also fronting another $17 million in direct incentives to Netflix while the City of Albuquerque is coughing up another $7 million. These funds come from something called the Local Economic Development Act (LEDA), commonly referred to as a “closing fund.” These are payments made by state or local governments to preferred industries. One might believe that in a state as poor as New Mexico (consistently among the nation’s poorest) that taxpayers picking up the bill for 30 percent of a profitable corporation’s business expenses would be enough.

As things seem at the moment, Netflix is going to continue to grow and over time it should create more jobs in New Mexico. That will generate all the usual headlines about how great the company is for the state and its economy, but it will come at a tremendous cost. That cost is not just in lost revenue, but in tax rebates borne primarily by state taxpayers. This subsidy is both unfair and unsustainable.

As one of Hollywood’s biggest businesses, Netflix is a member of that elite group of publicly traded stocks known as the FAANGs (Facebook, Amazon, Apple, Netflix, and Google). Netflix flaunts its rapidly growing profitability, but it is still prepared to consume massive taxpayer subsidies not only from one of the poorest states in the country, but from a state that can only afford to pay out those generous subsidies thanks to the revenues it receives from the oil and gas industry that so much of Hollywood condemns.

Senator Bernie Sanders is still a hero to many in the entertainment industry and, to be fair, he at least takes a principled approach to such corporate welfare. Unfortunately, the same cannot be said for many in Hollywood and Democratic politicians like New Mexico governor Michelle Lujan Grisham. She has locked our state in to paying Netflix outrageous sums of money over the next decade at a time of great uncertainty for New Mexico and its economic outlook and thrown away the key. That much of that uncertainty comes from her own party only piles irony upon irony.

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