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Opinion piece: Government boondoggles shouldn’t be New Mexico way

This article first appeared in the Las Cruces Sun News on Sunday, July 31, 2022.

New Mexico is always ranked among the “poor” states in the United States. But, as anyone who lives here or has taken stock of New Mexico’s abundant natural and cultural resources can tell you, we have no business being “poor.”

Sadly, much of our poverty is self-inflicted. It is the obvious result of bad public policy. While there are all manner of bad tax and regulatory policies that often wind up being “in the weeds,” one of New Mexico’s fundamental problems is the result of politicians’ misguided belief that the path to success involves more government spending or another big government project.

The Rio Grande Foundation has long had its concerns about two Bill Richardson-era projects of this kind: the Rail Runner and Spaceport America. Starting with the Rail Runner, the latest ridership data just came out and, over the past year the train saw 319,635 riders board the train. The train was fully operational throughout the last 12 months which included a few months of fares having been discounted to $2.50 a day.

One might think that with gas prices these days the Rail Runner would be a cost-effective alternative. Sadly, the train’s current ridership is about 25% of peak years of 2010 and 2011 when more than 1.2 million people boarded the train. Sadder still is the fact that taxpayers continue to pay tens of millions of dollars in debt service on construction of the train and nearly $20 million annually to operate it.

Shockingly, Las Cruces Sen. Bill Soules recently pledged to reintroduce legislation in the 2023 session that would theoretically create “high speed rail” from Denver to Chihuahua. The fact is that population density numbers don’t justify commuter rail between Albuquerque and Santa Fe. Now Soules wants to spend tens of billions on “high speed” passenger service spanning more than 850 miles, three states, and two countries?

Sadly, Spaceport America has proven itself to be another Richardson-era boondoggle that hasn’t lived up to its promise. Spaceport America has been open for business for more than a decade and it has yet to fulfill its mission of hosting commercial space flights.

Last July Richard Branson and a team of Virgin Galactic employees did make it to weightlessness, but the company’s stock has tanked in the meantime and their latest prediction is for flights to begin the first quarter of 2023.

Plans for those manned commercial space flights have been delayed time and again. We’re not holding our breath for flights to begin in earnest early next year.

Worse, Virgin Galactic recently announced plans to build its future fleet of spacecraft in Mesa, Arizona. Sadly, spending hundreds of millions of our tax dollars to provide a spaceport for Virgin Galactic was not enough for them to build ships here.

With massive oil and gas surpluses flowing into the state’s coffers, politicians like Soules will again be looking for new “opportunities” to waste money. But big government spending schemes have repeatedly failed to truly diversify our economy or bring sustainable growth to our state.

Instead, the governor and Legislature would better serve our state by considering why companies with a New Mexico presence (like Virgin Galactic and Intel to name two) continue to choose neighboring Arizona over us.

It might be Arizona’s school choice which has improved educational results and workforce preparedness, not to mention a willingness for families to locate there.

Or, perhaps it is Arizona’s lower taxes which has dropped to 2.5% for nearly all Arizonans under a new tax cut law.

Finally, it could be that Arizona has a “right to work” law which gives private sector workers the right to opt out of membership or the payment of dues and fees in labor unions.

No matter, it is high time for New Mexico to abandon our government-driven model and consider what states like Arizona and others do that has worked so much better.

Paul Gessing is president of New Mexico’s Rio Grande Foundation.

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

Op-ed: Clean Car Rule is Lujan Grisham’s latest policy imposition

Gov. Lujan Grisham recently continued her attempt to simultaneously keep the oil and gas revenue spigot flowing while enacting enough policies from the radical environmental agenda to placate her political and fundraising base.

Her latest plan, known as the Clean Car Rule, was adopted by her handpicked Environmental Improvement Board (EIB). Governor-appointed boards are far more willing to do what they are told than are unruly and sometimes uncooperative (albeit overwhelmingly Democrat) legislative bodies with their own political calculations and aspirations.

Incredibly, New Mexico’s newly Clean Car Rule undermines democracy and self-government (along with our economy) by placing New Mexico automobile regulations under the control of another state, California. The current rules are California’s and if California changes them, New Mexico will have to go along with them or reverse course and opt out.

New Mexico’s new automobile standards will require roughly 7% of new cars sold in the State to be zero emission in 2025. In the latest report available (3rd quarter of 2021) zero emission vehicles amounted to just 2.29% of new vehicle sales in New Mexico. So, to comply with the new rule, sales of zero emission vehicles will need to just more than triple from Q3 of 2021 to 2025.

But the real kicker is by subjecting itself to California’s political whims New Mexico could be forced to adopt even more aggressive “Clean Car” standards soon. California Gov. Gavin Newsom has issued an  executive order that, if adopted, would end the sale of gas-powered cars in California by 2035. Final adoption of that rule could come in California as early as this August.

If California enacts this rule, 35% of new cars, SUVs and small pickups sold in California (and thus New Mexico) must be zero-emission starting with 2026 models. That number will increase yearly, reaching 51% of all new car sales in 2028, 68% in 2030 and 100% in 2035.

“Just” tripling sales of electric vehicles (EV’s) in two years in New Mexico means dealerships will cross-subsidize EV’s by raising prices on gasoline vehicles or they will look to the State to further subsidize sales of “chosen” vehicles. This could make gasoline vehicles purchased in New Mexico more expensive leading to purchases made at out-of-state car dealers. That would result in lost jobs and tax revenues in New Mexico. That situation will get much worse if California (and New Mexico) adopt the even more aggressive rules being considered.

Current tax credits and subsidies include a $7,500 federal tax credit and various credits for upgrading connectivity to the electrical grid further help with deployment of electric vehicles. Of course, those credits and subsidies are paid for by increasing costs on taxpayers and utility rate payers.

Deployment of EV charging stations will be another expense associated with this plan. A recent report found New Mexico to have just 401 public charging stations statewide. And those need to be maintained. A recent report from EV-friendly San Francisco found that 27 percent of the Bay-areas charging stations were not functional.

All of this comes at a time when New Mexico’s largest utility (PNM) is keeping its coal fired power plant open just to keep the lights on and says it won’t have half the solar/battery replacement power needed to keep the lights on during the summer of 2023.

There are so many problems and costs with a drastic shift toward electric vehicles that at the very least New Mexico’s elected Legislature should have had a say, but instead we have a Governor in a tight reelection battle who wants to make big promises to environmental groups and their funders no matter how disruptive or damaging to New Mexicans and their livelihoods.

The fact is that the real costs of these unrealistic and damaging policies will be borne after this election. Sadly, that is all by design.

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 Legislature Notable News Oil & Gas Open Government Tax and Budget Taxes Top Issues Transportation

2022 Freedom Index Results Published

The Rio Grande Foundation uses its “Freedom Index” vote tracking site to  hold New Mexico legislators accountable for their stances on individual freedom and personal liberty. We have rated all bills that impact individual freedom that received floor votes for the 2022 session and thus the current Index results are “final.”

Every bill receiving a score is rated on a scale from -8 through +8 depending on its overall impact on YOUR personal freedom. In the 2022 session the most impactful vote (-8) was on SB 14, the Clean Fuel Standard. A full analysis of that bill can be found here.

The BEST bill voted on this session was HB 163, that is the bill which includes several tax cuts (RGF analysis of that bill here). It received a +4 rating in the Index.

Rep. Stefani Lord (R) who represents parts of the East Mountains of Albuquerque scored a 45 which was the highest rating of the session.

Rep. Randall Pettigrew (R) who represents Lea County scored a 43 which was good for the 2nd-highest rating of the session.

Sen. Craig Brandt (R) who represents Rio Rancho scored 33 which was the highest rating for any senator (the Senate and House vote on different bills and the House typically takes more votes and thus has higher and lower scores).

Sen. Antoinette Sedillo-Lopez (D) who represents parts of Albuquerque scored -66 which was the lowest rating for any member of the Legislature.

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A drive through Tim Keller’s Albuquerque

Since March of 2020 (the start of COVID 19) the Rio Grande Foundation has been located in downtown Albuquerque.

While Albuquerque has never had the greatest downtown, there is no doubt that the area has been hammered by COVID 19, the riots over the summer of 2020, and Mayor Tim Keller’s lax policies towards crime and homelessness. He just announced that he will be running for reelection this fall.

The Rio Grande Foundation recently took a drive around downtown and up Central Ave./Route 66 with a mounted camera to see what the City looks like. Watch the video for yourself below.

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Energy and Environment Legislature Notable News Top Issues Transportation Uncategorized

Time for an update on Michelle Lujan Grisham’s MPG mandate

The following appeared in the Farmington Daily-Times on October 7 and several other newspapers.

Recently, California Gov. Gavin Newsom made headlines with his announcement that by 2035 his State will ban the sale of gas-powered vehicles. That is an ambitious goal, but given the time line, it is hard to say what compliance will look like.

But for another, arguably even more ambitious car mileage proposal, one need look no further than New Mexico. Las September New Mexico Gov. Lujan Grisham announced that by just model year 2022 New Mexico would be increasing its fuel economy requirement for new cars to 52 MPG. The current average fuel economy rate is 25.1 MPG according to the EPA. 

As we noted at the time, Gov. Lujan Grisham (at the time) had “out California-ed California” by adopting even more stringent fuel economy standards than those on the books in California.

Will California’s decision spur Lujan Grisham to action? Perhaps more importantly, is New Mexico REALLY going through with the Gov.’s 52 MPG standard? This was put forth at a time of a record (oil-driven) economic boom in New Mexico. That boom has evaporated thanks to COVID 19 and the Gov.’s lockdown of the State’s economy. She MAY not be as enthusiastic about such radical plans at a time of serious economic challenges.

If you’re expecting to find legislation on this topic from the 2020 legislative session, don’t worry, nothing was even introduced. We have never even seen a formal executive order from the Gov. formalizing this requirement. In fact, after the initial round of media discussion (led off by the New York Times) the issue has been completely forgotten about.

And just to be clear, if the Gov. completely backed away from her plan, we would be more than happy to support such a move. The number of automobiles on the market right now that achieve such a standard is limited to about a dozen or so hybrid models. Considering that “light trucks” now account for 69 percent of the new car market, getting to that 52 MPG average is going to require one or more of the following:

  1. Unforeseen, drastic changes in automobile purchasing patterns among New Mexicans result in few trucks and more fuel-efficient vehicles being purchased;
  2. Massive taxpayer subsidies will have to be handed out to support the purchase of small/hybrid vehicles and massive taxes will be levied on larger vehicles and trucks.
  3. Large numbers of New Mexicans purchasing their vehicles in neighboring states and bringing them home (thus devastating New Mexico car dealerships and the State economy).

As much as our Governor desperately wants to virtue signal to radical environmental groups who so strongly support her, attaining 52 MPG is simply not realistic by 2022. California’s Gov. at least had the good sense to impose his regulations long after he will be out of office, but unless Biden wins the White House and picks her for a position in his Administration, she will have to make some hard decisions about whether to comply with this mandate (or not).

Perhaps it is already a forgotten promise that she never intended to honor in the first place? If so, that is certainly fine with us, but it would seem that New Mexicans should be given an honest explanation so they know what to plan for or expect the next time they walk into a car dealership.

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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No, New Mexico doesn’t need a gas tax hike

The following appeared in the 11/27/19 edition of the Las Cruces Sun-News.

As we move toward 2020 and the start of the short, 30-day legislative session, there are some who want the big-spenders in Santa Fe to raise taxes once again on hard-working New Mexicans.

In 2019, the Legislature, despite a massive surplus, passed the largest tax hike in New Mexico history. Although this was completely unnecessary, a portion of that money supposedly went to improving our roads. If that is still inadequate, there is plenty of surplus revenue sloshing around in the Roundhouse to ensure that roads across New Mexico are improved.

The following are five specific reasons not to raise the gas tax.

  1. It is no secret that New Mexico is in the middle of historic budget surpluses with general fund spending (thanks to record oil production) booming from $6.3 billion to nearly $8.0 billion. That’s a 27% increase in just two years. There is plenty of money available to build and repair roads, especially in Southeast New Mexico where roads have been impacted by the incredible oil and gas growth.
  2. The tax hikes adopted in 2019 just increased taxes with $52 million annually going to roads starting this year. That number will rise in the years to come. It would be premature to raise taxes so quickly after taxes were raised “for roads” just this past year.
  3. New Mexico should stop wasting $30-plus million annually on operating the Rail Runner. Ridership on the train is vanishingly small and wastes money that could otherwise be used for road maintenance. To keep spending money on this boondoggle while also calling for higher taxes is ridiculous. Transit is in decline nationwide. The sooner we realize this and stop spending money on it, the better.
  4. Gas taxes are “regressive.” Not only do the poor allocate a greater percentage of their incomes to paying such taxes, but low-income folks also drive older, less fuel efficient cars.
  5. Finally, although the current political situation in Santa Fe is unlikely to result in needed reform of New Mexico’s labor laws, the fact is that reforming the state’s Davis-Bacon “prevailing wage” law could result in cost reductions for a variety of transportation projects including roads (and schools). A 2017 fiscal analysis from the Legislature found that legislation that would simply have reduced the impact of New Mexico’s law would have saved New Mexico’s Department of Transportation between $20 million to $22 million annually based on 2017-2018 active construction projects.

New Mexico government is already bloated and the state is considered the worst run in the entire nation according to a new analysis by 24/7 Wall Street. Rather than just handing more money over to Santa Fe, it is time we expect a little better management of our tax dollars.

Building and maintaining basic infrastructure like roads is arguably the core function of government. It’s right up there with public safety. Even in the very best of economic times (thanks to national economic growth and record oil production) New Mexico state government has a poor track record of addressing those core functions (thus the 24/7 Wall Street ranking).

In particular Republicans must push back with full-throated opposition to raising taxes. Although lacking in power in Santa Fe, there’s a need to step up and provide a reasonable, limited-government alternative to the big-spending liberals in Santa Fe. They cannot yield to calls for still higher taxes whether they are sold as being for road improvements or something else.

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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Rail Runner Ridership continues decline (KOB Channel 4 story)

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.”

Earlier this year the Rail Runner received $30 million from the federal government to implement “positive train control.” The train receives tens-of-millions of dollars in direct and indirect taxpayer subsidies annually.

 

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Notable News RailRunner RGF Events Top Issues Transportation

Free event: An Evening With Transportation Expert Randal O’Toole

An Evening With Transportation Expert
Randal O’Toole

Click here for registration form.

Like many Americans, Randal O’Toole loves passenger trains, yet he acknowledges that intercity passenger trains and – outside of the New York region – urban rail transit play little role in American life today. The replacement of passenger trains with cars, buses, and airplanes is similar to many other recent technological replacements: word processors replacing typewriters, calculators replacing slide rules, telephones replacing telegraphs, and cell phones replacing land lines.

However, only for passenger trains has the government spent billions of dollars a year attempting to turn back the clock and slow that replacement. O’Toole’s book Romance of the Rails asks why this is so and whether passenger rail has a significant role to play in the future.

Randal O’Toole will be discussing his book and some New Mexico-specific boondoggles like the Rail Runner and Albuquerque Rapid Transit (as well as potential boondoggles) at a reception held at the Rio Grande Foundation offices on Friday, November 9th from 6:00pm to 7:00pm.

Location: “The Liberty Hub” 4301 The 25 Way, Suite B (Americans for Prosperity signage) at Jefferson and I-25 across from Panera.

This is a free event open to the public. Pre-regisrations are appreciated. Light snacks will be available.

Romance of the Rails is the culmination of Randal O’Toole’s lifetime of research and experience as an enthusiast of the rails and as a transportation expert.

American transportation has undergone many technological revolutions: from sailing ships to steamships; canals to railroads; steam to diesel; horse-drawn to electric streetcars; passenger trains and urban rail transit to airplanes and automobiles. The government has allowed and encouraged most of these revolutions, but it spends billions of dollars a year attempting to turn back the clock for rail transit and intercity passenger trains.

To show why, O’Toole provides a detailed history of rail in America leading to the present, when federally subsidized efforts to return to rail’s golden age are doing more harm than good.

O’Toole examines the costly allure of high-speed trains and light rail, demonstrating that passenger rail doesn’t even work well in Europe and Asia, much less here. Far from being backward, America’s railroads are the envy of the world, moving freight efficiently and profitably while leaving passengers to other modes of travel that are faster, less expensive, and more convenient.

The book concludes that the passenger transportation of the future will rely on America’s 4 million miles of roads and on air travel. As Romance of the Rails thoroughly chronicles, Americans love passenger trains, but given the vast resources inexplicably being poured into them, we are being taken for a ride.

About the speaker:

Randal O’Toole is a Cato Institute Senior Fellow working on urban growth, public land, and transportation issues. His analysis of urban land-use and transportation issues, brought together in his 2001 book, The Vanishing Automobile and Other Urban Myths, has influenced decisions in cities across the country. In his book The Best-Laid Plans, O’Toole calls for repealing federal, state, and local planning laws and proposes reforms that can help solve social and environmental problems without heavy-handed government regulation.Romance of the Rails is the culmination of Randal O’Toole’s lifetime of research and experience as an enthusiast of the rails and as a transportation expert.

Click here for registration form.

 

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Gessing talks 2018 New Mexico Legislative session & what to do w/ Spaceport, RailRunner, & other government boondoggles

Rio Grande Foundation president Paul Gessing recently sat down with KRWG’s Fred Martino. We discuss the Spaceport and ongoing issues there and then move on to talking about the 2018 Legislature and why voters should be so skeptical of government infrastructure projects.

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Economy Local Government Notable News Tax and Budget Taxes Top Issues Transportation

What Albuquerque’s Next Mayor and City Council Can Do to Turn City’s Struggling Economy Around

(Albuquerque, NM) – The City of Albuquerque faces serious challenges. With the election for mayor and control of city council scheduled for October 3, it is clear that “the economy” and “crime” are the two issues of most importance to residents.

To assist candidates, the Rio Grande Foundation has outlined a detailed plan to improve Albuquerque’s fiscal condition and thus boost economic development and reallocate resources to effective crime-fighting. Ideas contained in “Fixing Albuquerque: Fiscal Policy” include:

  • Right-size and re-evaluate employee compensation to more closely reflect private-sector reality. Beginning with a comprehensive study and analysis of municipal employment, city councilors and the next mayor must streamline the bureaucracy;
  • Reduce the number of government-owned, city-run, taxpayer-financed facilities such as the Anderson Abruzzo Albuquerque International Balloon Museum and the Albuquerque International Sunport. Each of these facilities could at the very least be managed far more efficiently by private-sector providers. In some cases the facilities can be sold off completely;
  • Albuquerque is among the minority of cities to not rely on private-sector providers for city-owned golf courses and solid-waste collection/disposal. For example, Rio Rancho’s trash is handled by Waste Management, Inc. and the City of Cincinnati’s municipal golf courses are managed by private contractors.
  • Nearly 40 percent of the 165 American zoos accredited by the American Zoological Association—among them, zoos in Fort Worth, Cincinnati, New Orleans, San Diego, and Jackson, Mississippi—are run by private, nonprofit societies.
  • Albuquerque’s poorly focused government and bloated payroll is illustrated by a lack of clear, simple, and achievable goals. The city’s “Goal Areas, Goal Statements and Desired Community or Customer Conditions” is a mish-mash of random and even conflicting objectives that often have little to do with making Albuquerque or any other city thrive.

The Rio Grande Foundation will send “Fixing Albuquerque: Fiscal Policy” to all active candidates for city office this fall, and hopes that it will form the basis for some hard discussions about streamlining and improving services and the cost of city government.