Martinez will leave state better than she found it

After eight years of Republican Gov. Susana Martinez in office, what is her legacy? She was the first Latina governor in America soon to be followed by Michelle Lujan-Grisham who will be the 2nd Latina to hold that position. By itself, this is an important legacy for Martinez, but what about her policies and their impact on New Mexico?

At the Rio Grande Foundation we look at issues from an economic perspective and we make no bones about being fiscally-conservative. Unfortunately, the first Martinez legacy is Medicaid expansion. The program which will cost New Mexico taxpayers $1 billion next year was expanded by President Obama as the core element of his “ObamaCare” program. States were given the choice over whether or not to accept this “free” money for what will turn into a costly entitlement expansion for the states as they are called upon to pick up more of the program’s costs.

One of New Mexico’s fundamental problems is dependency both in terms of individuals being dependent on welfare programs and a State economy which is in turn too dependent on Washington for money. It would have been extremely politically difficult for Martinez not to embrace Medicaid expansion, but it is also an important part of her legacy.

Martinez’s mere presence was a deterrent to out-of-control spending and taxes during her time in office. She kept spending in check with lower general fund spending growth than either Richardson or Johnson although there wasn’t much money available. Her principled stance against higher taxes will also be missed although with more than $1 billion in surplus revenues available, even the “progressives” now in control of New Mexico government will likely hold off on big tax hikes, at least for now.

In the area of taxation, while she is often credited (or blamed) for a small cut in corporate taxes that she signed into law (along with myriad other policy reforms including elimination of “hold harmless,” and a rise in film subsidies) in 2013. The bill was supported by wide majorities in both houses (and parties) of the Legislature but Martinez claimed credit for the bill and has received blame from some for its lack of immediate, positive impact.

Martinez can’t be blamed for the original “hold-harmless” fiasco. That was Richardson’s decision to eliminate the tax on groceries. Along with the Legislature she “solved” the “hold-harmless” problem and reduced corporate tax rates, but the complicated bill also gave increased taxation power to many local governments across the state which sent gross receipts taxes upward along with local spending.

Martinez also had to deal with what a Democrat-controlled Legislature gave her in terms of legislation. But, when blame and credit are given out, most focus only on the governor.

As a Rio Grande Foundation analysis shows, New Mexico job growth (as compared to the nation as a whole) dropped from Johnson to Richardson and then Martinez. How much of this can be laid at the feet of a Governor operating in a hostile legislative climate? That is a difficult if not impossible question to answer.

What we do know is that despite the economic challenges she faced throughout her term Martinez is leaving her successor with a massive surplus and a low 4.6 percent unemployment rate. In many ways the State is in much better shape than when she took office.

Unlike Martinez, Michelle Lujan-Grisham has a favorable Legislature that will eagerly embrace much of her agenda. After weathering serious economic challenges New Mexico policymakers have a real opportunity to put the state on better economic footing.

Most New Mexico governors leave New Mexico with low poll numbers. On balance, Martinez did a lot of good for this State in some tough economic times.

Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is 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.