DEPENDING ON WASHINGTON: A statistical review shows just how dependent New Mexico is on funding from the federal government.
By Rob Nikolewski │ New Mexico Watchdog
SANTA FE — New Mexico is one of the most reliant states in the country when it comes to the federal government.
In fact, New Mexico came in first place in two recent studies on Washington spending per state and each year, New Mexico receives more than $13,000 per person from the federal government.
A review by New Mexico Watchdog of selected federal programs and expenditures shows that in many ways, the Land of Enchantment is a land of dependency.
In September, a study from the Pew Charitable Trusts’ Fiscal Federalism Initiative, New Mexico came in first place as the state most reliant on government spending.
The study looked at federal grants, procurement, retirement benefits paid out, salaries and wages from federal jobs, as well direct payments to things like Medicare and disability payments. It determined that eight states rely on the federal government for at least 30 percent of their revenue. New Mexico finished No. 1, with more than 35 percent of its gross domestic product coming from Washington.
Earlier this month, New Mexico finished first in another study.
A national survey by two researchers at the Mercatus Center at George Mason University found that New Mexico’s economy has the highest percentage of public-sector and government-contract jobs in the country.
Nearly 32 percent of New Mexico’s non-farm payroll employment is attributed to government-financed jobs. The national average is just 19.2 percent. New Mexico came in last with just 68 percent of jobs coming from the private sector.
“It was interesting, for example, to see something like New Mexico pop up there,” said Keith Hall, one of the Mercatus Center researchers. “I know they’ve got some military facilities and a couple of national laboratories. But apparently that makes a bigger impact on a fairly small state like New Mexico than I would have guessed.”
Last year, the financial news and commentary website 24/7 Wall St. looked at the per capita revenue received by each state and found that New Mexico receives the fifth-highest amount in the country — $13,578 per capita.
“New Mexico received more federal funding from the Department of Energy than any other state, with an amount of $4.8 billion,” the website said. “This is due to the three nuclear weapons facilities located within the state.”
The state also got generous payments from the Obama administration when stimulus money was handed out. New Mexico received per capita spending of $1,289 on the American Recovery and Reinvestment Act. That’s more than any of its neighboring states ($985 per capita in Texas; $1,047 in Colorado; $1,054 in Utah; and $1,204 in Arizona).
On an individual level, the numbers are not as stark.
But still, as a proportion, New Mexico participates in a number of government services at a higher rate than other states.
For example, 21 percent of New Mexicans are on food stamps. That’s 6 percent higher than the national average.
When it comes to Social Security disability recipients, New Mexico exceeds the national average. According to the Kaiser Foundation, 2.6 percent of people in the state were Supplemental Security Income (SSI) Beneficiaries with Disabilities, compared to 2.2 percent across the U.S., putting New Mexico in a tie for 11th for the highest rate in the country.
In addition, as New Mexico Watchdog pointed out earlier this year, there’s been a 58.7 percent spike in disability recipients in New Mexico in the past nine years.
In Medicaid enrollment, New Mexico clocks in at 28 percent of the population, sixth-highest in the nation, and seven points higher than the national average of 21 percent.
For Medicare, New Mexico falls exactly at the national average of 16 percent, according to the most recent numbers compiled in 2012.
And when it comes to Social Security beneficiaries, New Mexico also is close to the national average. For the U.S., 18.1 percent of the population receives Social Security benefits while in New Mexico, the percentage is 18.3.
The numbers for individuals on entitlement programs is in large part due to the amount of poverty in the state, while New Mexico’s overall numbers point to the large amount of federal land in the Southwest, plus the number of military bases and two national laboratories (Los Alamos and Sandia) that employ thousands.
But over reliance on the federal government to prop up the state’s economy is a major concern.
“A state like New Mexico may be worried about larger government deficits,” said Hall of the Mercatus Center. “That’s because if deficits continue to grow, that could lead the government to cut spending, and if spending goes down, New Mexico, because of its reliance on federal dollars, will be disproportionately affected.”
Or, as longtime fiscal hawk state Sen. John Arthur Smith, D-Deming, put it, “In time, I think there’s going to be a reduction in (federal) spending regardless who’s president. I don’t want our state to be the bug on the windshield.”
New Mexico Watchdog has compiled a table how the state compares to national averages in selected studies and statistics:
Contact Rob Nikolewski at firstname.lastname@example.org and follow him on Twitter @robnikolewski