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Why is New Mexico not realizing its potential?
Updated: 2 min 49 sec ago

Recent Episodes of “New Mexico Freedom Hour” now available: exciting announcement about upcoming show

Fri, 2014-10-03 13:03

Rob Nikolewski interviewed Senate Finance Committee Chair John Arthur-Smith on September 27, 2014. The discussion centered on New Mexico’s economy.

Paul Gessing interviewed Aloysius Hogan of the Competitive Enterprise Institute on government pension issues during the first half of the show and interviewed site selection expert John Boyd about the Tesla decision, why he thinks Tesla chose Nevada over New Mexico, and what New Mexico should consider doing to make it more attractive as a business destination in the future.

Gessing’s interviews are available here.

Be sure to tune in to 770 KKOB AM on October 11 from noon to 1pm as Paul Gessing is scheduled to interview Albuquerque Mayor RJ Berry on the Albuquerque economy and his efforts as Mayor of New Mexico’s largest city.

Don’t Roll Back Pension Reforms

Fri, 2014-10-03 08:18

I’d typically say that the chances of my penning an opinion piece with a representative of the AFSCME government employee labor union would be as likely as my penning an article with the Easter Bunny (Like Franklin Delano Roosevelt, I don’t believe in unionizing government workers). Anyway, the pension reforms passed a few years back are worth defending even if they didn’t go nearly far enough.

AFSCME and the Rio Grande Foundation usually have very different positions on a wide range of issues including contentious disagreements over New Mexico’s government pension plans.

Even though we sometimes disagree on the scope and role of government, each of our organizations supports preserving the pension reform that was passed by an overwhelming bipartisan majority in both houses and signed by the Governor in 2013. Specifically, we oppose rolling back that reform in the name of recruiting and retention or special treatment for select groups of employees, including opposing the reintroduction of double dipping.

Prior to the bipartisan pension reform, the two funds were looking at a combined $12 billion in unfunded liabilities, and were on a trajectory to have over $60 billion in unfunded liabilities in the next three decades. While there is serious disagreement between us over whether the pension reforms went far enough, there is 100% agreement between us that the reforms were a step in the right direction.

Unfortunately, some groups may be trying to cut deals with politicians during election season to give their members special treatment and to worsen the solvency of the funds. There are legitimate recruiting and retention problems across state and local governments, but using the pension funds as a piggy bank to sweeten employee compensation packages is a terribly fiscally irresponsible idea.

Yes, the condition of the funds is improving — that was the entire point of our bipartisan reform – but we need to let the reforms work before there’s any discussion of undoing even small parts of the difficult and excellent work achieved by leaders in both parties.

Undermining a successful bi-partisan reform for the sake of small political favors during election season would be a disservice to New Mexico’s taxpayers and employees alike.

Paul Gessing is president of the Rio Grande Foundation, New Mexico’s free market think tank;
Carter Bundy is legislative director at the American Federation of State, County, and Municipal Employees, a union representing primarily government workers in New Mexico.

Gov. Martinez comes in 6th overall in Cato Institute ranking of governors’ fiscal policies

Thu, 2014-10-02 13:29

The free market Cato Institute ranks the fiscal policies of the nation’s governors every two years and Gov. Martinez’s policies show her to be among the best in the nation on fiscal issues with an overall ranking of 6th.

While notable tax-cutters McCrory (NC) and Brownback (KS) were the top-performers, Martinez outperformed neighboring governors Perry (TX) and Fallin (OK), not to mention Brewer (AZ) and Herbert (UT). Colorado’s Hickenlooper came in 2nd-last on the list beating out only Jerry Brown (CA).

Of Martinez, the Cato report noted:

Governor Martinez scores above average on spending and has pushed major tax reforms. Her proposed general fund spending increases have averaged a modest 2.4 percent in recent years. She has pursued tax cuts to make New Mexico more economically competitive. In 2012 she signed a bill reducing gross receipts taxes on inputs to construction and manufacturing, and she has called for exempting 40,000 small businesses from the gross receipts tax. Her biggest tax policy success was pushing through a cut to the corporate income tax rate from 7.6 to 5.9 percent, phased in over five years.

While New Mexico’s economy remains sluggish, there can be no doubt that Martinez has faced more difficult economic and political challenges than most.

Full listing below:

Ex-Cons get priority under ObamaCare Medicaid Expansion

Wed, 2014-10-01 13:39

The chicken long ago flew the coup in New Mexico when it comes to Medicaid expansion under the ObamaCare health law (the same one that resulted in my insurance policy being canceled). But battles are being waged nationwide over the issue of whether or not to expand government dependency.

Our friends at the Foundation for Government Accountability recently uncovered some information that went into this shocking video which shows that ex-cons are the first in line when it comes to obtaining health care (in front of the poor and truly needy) under expanded Medicaid.

If you prefer to read rather than watch your news, check out an article on the topic. Of course, it is worth pointing out that Medicaid doesn’t actually lead to significant health gains among served populations.

Are the reasons for New Mexico’s high poverty such a mystery?

Wed, 2014-10-01 09:50

As I expected when Winthrop Quigley began writing his “Upfront” column for the Albuquerque Journal, his writing is a constant source of material to analyze and criticize. The latest Quigley column notes New Mexico’s high poverty rate and, in an almost childlike fashion, questions why New Mexico is so darn poor.

In true Quigley fashion, he cites several potential reasons for New Mexico’s poverty, but overlooks the single-greatest factor: New Mexico’s low levels of economic freedom. According to the Canada-based Fraser Institute, New Mexico is the least-free state in the USA. And, according to a variety of rankings of “business-friendliness,” (closely-related to economic freedom), New Mexico also performs poorly.

Economic freedom and free markets couldn’t possibly have anything to do with economic prosperity, could it? Of course it could despite Quigley’s obvious efforts to ignore these issues.

Check out the chart below from the Heritage Foundation which puts out annual “Index of Economic Freedom.” Clearly, having greater economic freedom has a positive impact on economic prosperity on a global basis. Is there any reason to believe that this trend does not apply to US states including New Mexico?

The Sierra Club translated

Tue, 2014-09-30 09:57

Environmentalists have such power when it comes to formulating public policy and influencing what elected officials (and bureaucrats do) that, environmentalists often speak like bureaucrats, hiding their true intentions. This article on the shutdown of half of the generation capacity at San Juan Generating Station which quoted an environmental leader at length gave me pause due to the stark differences between stated views and intentions and reality.

The following includes actual quotes from the Sierra Club representative followed by explanations of their real intentions in bold.

The Sierra Club rep. is quoted as saying, “Of course, what we’d like to see is New Mexico transition off of fossil fuel.” In other words,
“We really want to use government force to stop PNM from using cost-effective and reliable coal to fulfill consumers’ demand for electricity no matter what consumers want.”

“We’re looking at more ways to push renewables. We see this as a prime opportunity for PNM to invest in renewables. There’s plenty of opportunity potentially for PNM to really launch New Mexico into the clean energy future.”
“We at the Sierra Club have zero at stake financially (being neither major electricity consumers, nor having capitol at stake) have all the answers and should be able to use government force to tell PNM how to supply electricity to their customers.”

“Coal plants face tremendous uncertainty, and the remaining units at San Juan are no exception. State authorities and ratepayers should carefully analyze the potentially costly commitment PNM may be making in any coal contract.”
“The Sierra Club and our radical allies both in and outside of government will do everything we can to increase both the political and economic costs of coal and other reliable fossil fuels to the point that you will simply give in in to our demands.”

If you like your health care plan…you CAN’T keep it

Mon, 2014-09-29 09:29

It’s official. I’ve lost my health insurance plan thanks to ObamaCare. As you can see from the video montage below, President Obama repeatedly told us variations of the lie that “if we like our plan, we could keep it.”

Unfortunately for myself and other Blue Closs individual plan holders in New Mexico, the following letters were recently mailed out:

So, me, my wife, and my two daughters will be looking for a new and likely much more costly “Obama-approved” insurance plan in the weeks and months ahead. I’ll be able to start the hunt on November 15 and, while my understanding of health care and public policy will help me muddle through, I’m sure that others who have just had their “grandfathered” plans canceled will face a real crisis when they are socked with their personal ObamaCare price tag.

How about school choice to save $700 million?

Fri, 2014-09-26 08:58

New Mexico’s Legislative Finance Committee has produced a new study (discussed here in the Albuquerque Journal) claiming that taxpayers in our state could save $700 million by convincing 2,600 additional students to graduate rather than dropping out. Saving $700 million, not annually, but over the life of each graduating class, would be a very nice thing for New Mexico…and of course, there is no reason to stop at 2,600 additional graduates.

And, while the LFC’s recommendations are open to debate, they fail to include adding school choice to the mix. However, school choice has worked elsewhere as the chart below relating to the DC voucher program shows:

Lest we mistakenly believe that such success has only happened in Washington, there has been a great deal of success in Milwaukee schools which have also enacted a voucher program (of note is the dramatic improvement in both public and private schools in Milwaukee where the competition from school choice seems to have pushed traditional public schools to improve as well):

Sen. John Arthur-Smith on NM Freedom Hour this week

Thu, 2014-09-25 13:49

The New Mexico Freedom Hour is presented by the Rio Grande Foundation. It next airs on Saturday, September 27, 2014 from 12pm to 1pm on 770 KKOB AM. This week, Rob Nikolewski of Capitol Report New Mexico will be sitting in for Paul Gessing:

Nikolewski’s guest will be New Mexico Sen. John Arthur-Smith, D-Deming. Smith is chairman of the powerful Senate Finance Committee.

The show will be focused on New Mexico’s struggling economy and what the New Mexico Legislature can/will do about it.

Listeners are encouraged not only to tune in and listen, but to call in with questions: 505-243-3333.

New report when it comes to being pro-business, right to work is a virtual necessity

Thu, 2014-09-25 13:12

Rob Nikolewski over at Capitol Report New Mexico has reported on a new study from the  American Economic Development Institute which ranks the various US states on being pro-business or anti-business. According to the report, New Mexico received an overall C grade for 2014 — the same grade it got in 2013 and 2012 — but tumbled from 25th in the AEDI rankings to 35th, tying Oklahoma for the most precipitous drop of the year.

See the chart below:

The top 10 states in the AEDI survey  this year were (9 of the top ten are right to work). Lack of right to work is not the only problem New Mexico faces as is clear from the data, but it is obviously a major factor in determining whether a state is business-friendly or not:

1. Utah

2. Wyoming

3. Nebraska

4. Virginia

5. Kansas

6. North Dakota

7. Indiana

8. Missouri

9. South Carolina

10. South Dakota

The bottom 10 consisted of (all of the bottom 10 are not right to work/forced unionism states):

41. Massachusetts

42. Vermont

43. Connecticut

44. Maine

45. West Virginia

46. Wisconsin

47. New Jersey

48. Rhode Island

49. Illinois

50. California


The only thing Branson has fired into space is his ego

Wed, 2014-09-24 13:49

As New Mexicans wait and wait for something, anything to happen at the Spaceport (for which they have paid more than $200 million), those who put their own money up to be among the first to fly into space are getting impatient with the ongoing delays (and are, in some cases, trying to get their money back).

I was recently interviewed for this story by the UK’s Daily Mail.

The story details some of Richard Branson’s broken promises and the unfolding, slow-moving debacle that is New Mexico’s Spaceport. It is worth a read for even those in our state who have been keeping a close watch on the project both because of the different perspective and for the cheeky writing style that Brits seem to pull off so well.

Free enterprise and pollution

Mon, 2014-09-22 21:55

Sometimes a column leaves me positively speechless. This is one of them. It was written by a local developer, Rob Dickson, who went to New York to march against climate change…presumably he walked.

In his article, Dickson calls for “a no-pollution economy.”

He also states that people in business, who claim to support “free enterprise” and “political freedom,” should object to “free” pollution because it:

1) Makes others pay a cost, not of benefit to them.

2) Misallocates resources. Pollution is waste. Waste costs all of us.

3) Is generally the result of corrupting influences at all levels of government.

4) Squashes innovation by mispricing the products and services we buy and sell.

Needless to say, I disagree with Dickson. My responses to each point follow:

1) If carbon is a pollutant then we are all “polluters” by our very existence. Assuming that he is speaking to something beyond carbon emissions (real pollution if you will), we all benefit from the activities that cause pollution: goods produced in factories, food grown on farms, transportation of that food and those products, etc. These goods are taxed and regulated every step of the way. I’m not sure how this would work.

2) Yes, pollution is waste. That is why businesses works relentlessly to reduce waste. UPS drivers, for example, do everything in their power to make only right turns because it saves time and fuel. Compare a modern plastic bottle with one that is 10-20 years old. The reduction in plastic usage is incredible.

3) No. Sorry. Pollution is a reality of human activity. Nothing more, nothing less. Pollution can take many forms and it is often nothing more than dirt and nutrients that have been moved from one place to another associated with human activities.

4) Mispriced according to whom? According to Dickson? According to the marketplace? According to the government? How do we set up a regime that accounts for ALL pollution? Is he saying “cap and trade?” He never states that if that is his belief, perhaps because the European scheme has failed.

Environmental hypocrisy?

Fri, 2014-09-19 12:20

I received a media advisory from the League of Conservation Voters recently (for some reason, it was not available online). It said in part, “New Mexico’s Latino community will be represented at the People’s Climate March in New York City this coming Sunday, September 21st by a group of Latinos who are part of local New Mexico program supported by the League of Conservation Voters Education Fund and Conservation Voters New Mexico Education Fund.”

The release listed Eduardo Garcia and Yarida Estrada as heading to New York to attend. I’m just wondering whether our radical green friends will be bicycling or walking to New York. After all, these are the very same people who supported efforts in the EU to impose heavy new taxes on airline passengers in the supposed hopes of reducing carbon emissions and saving the planet.

And, lest you think that these environmental groups are the “little guys” against the Koch-funded Rio Grande Foundation juggernaut, you should check out how much they are charging for an upcoming event here in poverty-stricken New Mexico. There must be even more wealthy “limousine liberal” environmentalists in this state than I thought.

In a broader sense, according to the Center for Public Integrity, the League of Conservation voters is now one of the leading “dark-money” groups in the nation.

About those polls

Thu, 2014-09-18 15:19

The Albuquerque Journal has been running its usual pre-election poll results. Gov. Martinez has a significant (18 point) lead on Gary King and yet, subsequent polls show seemingly broad voter support for two policies Martinez opposes (at least somewhat).

On the minimum wage, 68 percent support the idea while 27% oppose it. Martinez has previously vetoed a hike to $8.58 an hour while having said she supported a smaller increase. These polling data are in line with national polling on the minimum wage.

Unfortunately, the Journal chose not to ask more specific questions involving trade-offs such as higher prices or lost jobs. Economics 101 (and the Congressional Budget Office) tell us that imposing price floors leads to lost jobs:

And, on the proposal to tap the Permanent Fund to create a raft of new government programs targeted at early childhood, the poll results were strongly in favor of the plan. Unfortunately for the advocates, results of similar plans as enacted in other states are mixed.

It is hard to measure the depth of the voting public’s passion when it comes to these issues, but it is worth noting that right to work is supported by overwhelming majorities nationally.

Support for school choice tax credits is also overwhelming (64% to 25%, see Q. 20) and yet New Mexico remains without this type of school choice.

Polls are interesting indicators of public opinion, but support in a poll doesn’t always translate into reality. Hopefully, voters are smart enough to realize that raising the minimum wage and spending more money to expand the education bureaucracy aren’t going to improve New Mexico’s economy.

How green is that plastic bag ban? Presentation video available

Wed, 2014-09-17 14:24

Julian Morris of Reason Foundation recently presented on the issue of plastic bag bans at a series of events in New Mexico. Already, Santa Fe and Silver City have bans in place. Morris is author of a report on the is the author of the new report “How Green Is that Grocery Bag Ban? An Assessment of the Environmental and Economic Effects of Grocery Bag Bans and Taxes“.

Video of Morris’ presentation (and a five minute personal introduction by RGF President Paul Gessing) is below and his powerpoint slides are available here:

The ineffectiveness of plastic bag bans presentation by Julian Morris of Reason Foundation from Paul Gessing on Vimeo.

Liberty on the Rocks – Albuquerque

Wed, 2014-09-17 13:18
Join the Rio Grande Foundation For an Evening of
Discussion and Fellowship at Liberty on the Rocks!

"Liberty on the Rocks" is a no-host happy hour discussion and information-sharing session.

Liberty on the Rocks will be held at Scalo Northern Italian Grill which is located in Nob Hill at 3500 Central Avenue SE in Albuquerque. A private room has been reserved for this event. In August, Liberty on the Rocks will take place on Thursday, September 18th from 6:00 to 7:30PM.

There is no cost for this public event, but attendees are encouraged to have dinner or drinks. Registration is not required but is much appreciated. Click here to register online … it's fast and it's free!

Come celebrate liberty with us!

How did Nevada do w/ Tesla?

Mon, 2014-09-15 12:42

Unanimously, the Nevada Legislature has passed a generous list of subsidies in order to lure the Tesla “gigafactory” to a site near Reno. A few thoughts follow:

1) Any and all special incentives are sub-optimal policy. The best thing to do is to have low taxes and reasonable regulations.

2) Nevada already has a right to work law and no personal or corporate income taxes. It is also the most logical location for such a factory as it is the closest to the company’s headquarters without being in California which has previously given the company outrageous incentives, but is generally not friendly to business;

3) Since Nevada is already business-friendly and offers the best location, it is hard to understand why Nevada’s politicians were so generous to the company, but they were. Tesla will pay no property or payroll taxes for 10 years, no sales and use taxes for 20 years, and will receive another $195 million in tax credits. The total loss to the treasury (not cost) is $1.3 billion. The good news is that taxpayers will NOT pay anything out-of-pocket for the factory as we at RGF advocated.

4) As generous as Nevada’s subsidies are, they are more economically-defensible than those given to New Mexico’s film industry or were given to Schott Solar or Eclipse Aviation.

That’s because it appears that most or not all of the Tesla subsidies will be in the form of tax breaks as opposed to outright expenditures of taxpayer dollars. It’s also because this battery factory is not entirely reliant on the success of one company. Rather, batteries are a growth industry and even in the absence of Tesla, the factory will likely be useful.

5) Where Nevada could really do well is in the spinoff industries that will likely locate near the gigafactory. These businesses will pay full-freight mostly in terms of taxes and should be plentiful.


Could the Nevada Legislature have driven a harder bargain and gotten a better deal? Probably. Will Nevada ultimately come out just ahead in the Tesla deal despite the very generous subsidy package? I’d also say “yes.”

Can New Mexico make the policy changes necessary to make itself competitive with states like Nevada and Texas? I hope so.

Top States for Doing Business 2014

Fri, 2014-09-12 13:42

According to Area Development Magazine, 9 of the top 10 states for doing business in 2014 are Right to Work.

Unfortunately, the report only ranks the top 10 states, but New Mexico is nowhere to be found in any of the sub-rankings leading me to believe that we’re towards the bottom.

When will NM get in the game?

Tom Udall’s assault on the First Amendment

Fri, 2014-09-12 08:37

The following is from Common Sense with Paul Jacob. Given that New Mexico Sen. Tom Udall is the lead sponsor of this amendment to undermine the First Amendment, I felt it was worth posting in its entirety:

Yesterday’s somber thirteenth anniversary of the 9/11 terrorist attacks was marred by a brand new and savage act of violence against the very essence of America: the First Amendment.

Who orchestrated the attack? Responsibility was not claimed by ISIL or ISIS . . . or North Korea’s Kim Jong-un . . . or even Dennis Rodman.

The culprits? A majority of the United States Senate.

Fifty-four Democrats voted to scratch out the words “freedom of speech” from the First Amendment to be replaced by giving Congress new power to regulate the spending, and thereby the speech, in their own re-election campaigns.

Conflict of interest, s’il vous plaît?

The assault was only thwarted because a simple majority falls short of the two-thirds required to send the constitutional amendment to the House.

Dubbed the “Democracy for All Amendment,” supporters and their many cheerleaders in the media pretended Senate Joint Resolution 19 would overturn the Supreme Court’s Citizens United decision and get big money out of politics. Certainly an amendment could do that, explicitly, but this one would have done no such thing.

Instead, SJR 19 would have empowered our despised Congress to regulate as it pleased, with such sweeping power that the amendment’s authors felt the need to reassure supporters (such as the New York Times) by stating in the amendment that, “Nothing in this article shall be construed to grant Congress or the States the power to abridge the freedom of the press.”

Let’s hope that, for the 54 Senators who voted to repeal freedom of speech, this goes down as a suicide attack . . . politically.

This is Common Sense. I’m Paul Jacob.

My own article on Udall’s assault on the First Amendment can be found here.

This week on the New Mexico Freedom Hour

Thu, 2014-09-11 14:57

The New Mexico Freedom Hour is presented by the Rio Grande Foundation. It next airs on Saturday, September 12, 2014 from 12pm to 1pm on 770 KKOB AM. This week we’ll take on two important subjects relating to New Mexico’s economy:

• In the first half hour, host Paul Gessing will talk about New Mexico’s underfunded government employee pension system which was found to be the most underfunded system among any of the 50 states according to a new report by the Competitive Enterprise Institute (CEI). We’ll discuss the report, what makes New Mexico’s pension system so dire, and what needs to remedy the problem with Aloysius Hogan, a Senior Fellow with CEI.

• In the second half hour, Gessing will interview site selection expert John Boyd about the Tesla decision, why he thinks Tesla chose Nevada over New Mexico, and what New Mexico should consider doing to make it more attractive as a business destination in the future.

Listeners are encouraged not only to tune in and listen, but to call in with questions: 505-243-3333.