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Why is New Mexico not realizing its potential?
Updated: 1 hour 56 min ago

New Mexico’s job market is improving, but our work-force participation rates remain depressed

Wed, 2015-05-06 11:22

New Mexico’s job market is finally showing signs of life in the wake of the “Great Recession” as new federal data presented here by the Rio Grande Foundation show:

Obviously, New Mexico’s job situation remains far worse than it is in any of our neighboring states, but at least there is a pulse. Unfortunately, not much was done during the recent legislative session to set the stage for continued job and economic growth, so perhaps it was inevitable that New Mexico would see some job growth after years of the State economy being flat on its back.

As the chart below clearly shows, workforce participation in New Mexico lags the national average badly (by nearly 10 percentage points). And, while the national rate has declined in the wake of the “Great Recession,” New Mexico’s has quite literally collapsed with only slight improvement having taken place since 2011.

Obviously, there are some systemic issues with New Mexico’s economy and the New Mexico Senate in particular blocked any and all significant reforms.

Plenty of Room for Improvement

Tue, 2015-05-05 13:22

The Pew Charitable Trusts has looked at the health of the nation’s metro areas, in terms of “jobless rates, housing permits averaged over three years to 2015, 2013 gross domestic product and the number of incoming residents in 2014.”

Of the 377 regions Pew ranked, here’s how New Mexico fared:

Santa Fe: 180th

Albuquerque: 204th

Farmington: 240th

Las Cruces: 275th

Not much to be proud of, is it?

Lyft bails on New Mexico: Is Michael Sanchez to blame?

Tue, 2015-05-05 12:03

In a story published yesterday, the ride-sharing company Lyft is leaving New Mexico citing “mounting legal pressure from local (New Mexico) regulators.” From the looks of Facebook comments that I found it was a mysterious “DWI lobby” that caused onerous regulations to be passed by the PRC thus forcing Lyft out of New Mexico.

In reality, the situation seems quite a bit simpler. A better set of regulations for ride-share services was introduced by Rep. Monica Youngblood during the 2015 legislative session. This bill, HB 272, passed overwhelmingly 56-8. Unfortunately, the bill, as with so many others, got killed in the Senate without so much as a floor vote.

Notably, Raymond Sanchez, the former Speaker of New Mexico’s House and current Senate Majority Leader Michael Sanchez’s brother is the lead lobbyist for the taxi industry which HATES ride-sharing.

In the wake of the Senate’s failure to pass a reasonable bill, the PRC stepped in with some onerous regulations and now Lyft is gone.

So, there you have it: a microcosm of why New Mexico remains poor and doesn’t create as many jobs and as much economic prosperity as its neighbors. Michael Sanchez is by no means the only liberal politician that likely scared the ride-share companies (AG Balderas’ calls for drug testing were likely another factor). The PRC can also be faulted for passing onerous regulations. But, when blame is assigned for Lyft (and possibly Uber) leaving New Mexico, Majority Leader Sanchez and his near-dictatorial control over the Senate’s calendar must be near the top of the list of reasons.

The RTW Advantage Continues in April

Mon, 2015-05-04 11:18

Another month, another victory for job creation in right-to-work (RTW) states.

The Rio Grande Foundation is tracking announcements of expansions, relocations, and greenfield investments published on Area Development’s website. Founded in 1965, the publication “is considered the leading executive magazine covering corporate site selection and relocation. … Area Development is published quarterly and has 60,000 mailed copies.” In an explanation to the Foundation, its editor wrote that items for Area Development’s announcements listing are “culled from RSS feeds and press releases that are emailed to us from various sources, including economic development organizations, PR agencies, businesses, etc. We usually highlight ones that represent large numbers of new jobs and/or investment in industrial projects.”

April had a somewhat surprising result — non-RTW states posted their best performance of the year, and nabbed 29.4 percent of projected job creation:

As has been the case since January 1, in April, Kentucky claimed a disproportionate share of non-RTW employment. But it should be noted that the Bluegrass State is moving in a RTW direction — compulsory unionism may be repealed at the state level, and a dozen counties have passed RTW ordinances.

April saw a number of non-RTW-to-RTW shifts, including Adecco Group North America moving its headquarters from New York to Florida, California-based Kaiser Permanente establishing an IT campus in Georgia, and T&B Tube Company relocating an Illinois facility to Indiana.

Nationally, the total number of jobs projected so far this year is 59,455 — with 81.2 percent slated for RTW states.

How long will it take for New Mexico’s elected officials to recognize that RTW is a powerful economic-development tool?

Methodological specifics:

* All job estimates — “up to,” “as many as,” “about” — were taken at face value, for RTW and non-RTW states alike.

* If an announcement did not make an employment projection, efforts were made to obtain an estimate from newspaper articles and/or press releases by elected officials and economic-development bureaucracies.

* If no job figure could be found anywhere, the project was not counted, whether it was a RTW or non-RTW state.

* Intrastate relocations were not counted, interstate relocations were.

Housing prices in NM 2nd lowest appreciation during 2014

Mon, 2015-05-04 10:58

There is nothing inherently good about housing price increases. In fact, federal policies from Fannie Mae and Freddie Mac to low interest rates created by the Federal Reserve have manipulated the American housing market for years. There are also zoning and other local government regulations at play especially on the West Coast.

However, to at least some extent, rising housing prices are caused by housing demand. Housing demand is mostly caused by economic growth. Interestingly, during 2014, New Mexico’s housing market saw the second-lowest appreciation of housing prices during 2014 as shown in the chart below (check the data below the map for all of 2014 while the map is just the final quarter of last year):

Is New Mexico’s weak economy helping to prevent a second housing boom or will New Mexicans be unable to move to other states because they can’t get a decent price for their current home? Slow growth in housing values relative to other states is definitely another sign that our State’s economy remained weak in 2014.

Recent Paul Gessing interview: the impact of low oil and gas prices on New Mexico

Fri, 2015-05-01 15:14

Natural gas prices have been down for some time but oil has rebounded somewhat in recent weeks. Here’s a recent interview I did on the issue and how the prices of these important commodities impact New Mexico.

Economic Development: New Mexico Still Doesn’t Get It

Thu, 2015-04-30 14:41

Earlier today, Albuquerque Economic Development held “Connect to Success,” a workshop to educate attendees about “available business resources.”

AED, “a private, nonprofit organization whose mission is to recruit business and industry, help local companies grow and generate quality job opportunities,” should be commended for its desire to improve the region’s economy. Unfortunately, if its roster of speakers is any indication, the organization isn’t aware of the most effective tools to boost entrepreneurship and create jobs.

Nearly the entire seminar was devoted to programs and tax credits offered by taxpayer-funded bureaucracies. AED officials Bob Walton and Dennis Houston raved about the state’s Job Training Incentive Program. Ronald Burke, of the New Mexico Manufacturing Extension Partnership, touted his group’s “strategic partnerships,” and detailed all the ways factories could obtain subsidized help. Genaro Montoya of Sandia National Laboratories described the way his employer and Los Alamos National Laboratory, via a state program, offer services to small employers. (He assured the audience that the initiative “is not in business to compete with the private sector.”) The Workforce Connection of Central New Mexico‘s Jerilynn Sans described her agency’s subsidies for worker training. John Brooks, of the New Mexico Finance Authority, instructed attendees to tell the state’s congressional delegation that NMFA needs “more money.” And Lenny Bean, of the Procurement Technical Assistance Program, whined that sequestration was “a virus” that had spread from D.C. to the Roundhouse, in the form of a failed capital-outlay bill.

Deregulation? Broad, deep tax reform/relief? Right to work? A repeal of the state’s “renewable portfolio standard? School choice? None were mentioned during the workshop.

New Mexico’s economic-development strategy isn’t working. Labor participation is low, job growth is weak, and the population is falling.

It’s time for something different.

New Mexico’s costly renewable portfolio standard

Wed, 2015-04-29 08:33

Recently, I wrote an article for the Liberty Foundation’s national publication which I have posted below the chart relating to the cost of New Mexico’s Renewable Portfolio Standard. James Taylor of the free market Heartland Institute also visited Albuquerque recently and spoke about the high cost of government energy regulations. The presentation was covered by Rob Nikolewski of Watchdog.

Electricity production has become a hotly contested political issue. This is largely the result of powerful environmental pressure groups turning man-made global warming, or more recently “climate change,” into hot-button political topics.

The controversy began to manifest itself at the state level in the late 1990s when Nevada and Texas first adopted “Renewable Policy Standards” (RPSs). These laws require electricity supply companies to produce a specified fraction of their electricity from sources deemed “renewable,” such as wind, solar, and biofuels.

During the early 2000s, the adoption of RPSs spread to a number of other states. One of these was New Mexico, which initially adopted such standards in 2004. Today, according to the Database of State Incentives for Renewables and Efficiency (DSIRE), 29 states have legally mandated standards and 9 states have voluntary goals.

Not all RPSs are created equal. In fact, they tend to evolve somewhat dramatically over time. New Mexico’s RPS took its current form in 2007 when the Legislature and Gov. Bill Richardson amended the original RPS requirement that utilities get 10 percent of their electricity needs by 2011 from renewables. Under the 2007 law, utilities must use renewables to obtain 15 percent of their electricity by 2015. That requirement will grow to 20 percent by 2020 absent further legislatively enacted changes.

Also in 2007, New Mexico’s Public Regulation Commission (PRC) issued an order and rules requiring that Investor Owned Utilities (IOUs) meet the 20 percent by 2020 target through a “fully diversified renewable energy portfolio.”

This regulation micromanages how utilities meet the legislature’s standard, requiring at least:
• 30 percent of the RPS requirement be met using wind energy,
• 20 percent from solar power,
• 5 percent from other renewable energy technologies, and
• 1.5 percent from “distributed generation” renewable energy technologies for years 2011 through 2014, rising to 3% in 2015.

Renewables mandates drive up electricity prices, which is why they are mandates. If the renewable technologies required were cost effective, utilities would adopt them on their own. The combination, in 2007, of the legislature increasing the overall RPS and the new regulation further micromanaging utilities sparked a rise in New Mexico electricity prices.

The rapid increase in New Mexico electricity prices was both predicted and is likely to accelerate in the years ahead. According to a 2011 report by the Rio Grande Foundation and the American Tradition Institute, “Over the period of 2011 to 2020 these laws (New Mexico’s RPS) will cost New Mexicans an additional $2.3 billion over conventional power.” That price shock was predicted to be most pronounced in 2020 as the RPS is reaches the 20 percent level. According to the report, “consumers will pay $619 million more for power in 2020.”

PNM’s request includes the cost of new pollution controls and elimination of two units (half of total capacity) at its coal-fueled San Juan Generating Station near Farmington. This has nonetheless generated a great deal of controversy among environmental groups who want the facility completely and immediately shut down.

Camila Feibelman, executive director of the Sierra Club’s Rio Grande Chapter, told the PRC in recent testimony, “We agree with shutting down two units at the plant, but we’re concerned that PNM’s plan will still lock us into continued use of coal for another 30 years.”

Needless to say, the political battles over electricity at the state level are heated and they are just getting started. No matter what happens with the Obama Administration’s proposed federal “Clean Air” regulations, New Mexico and other states that have aggressive RPSs in place will continue to see electricity prices rise as the “low-hanging fruit” of relatively cheap and easy renewable generation is achieved and more costly, less economical renewable projects are embarked upon in order to fulfill those standards.

In other words, for rate payers in New Mexico and elsewhere, the pain from the state’s RPS will only get worse in the years ahead.

Time for GPS Monitoring of State Employees?

Tue, 2015-04-28 10:49

Governor Martinez is charging 243 state employees with taking “administrative leave” to vote on Election Day … and not voting.

According to the Albuquerque Journal, the accused “could face disciplinary action ranging from a reprimand and repaying the state to more serious sanctions, such as suspension.”

Kudos to the New Mexico State Personnel Office auditor who conducted the investigation. Government employees, all but free from the pressures of competition and customer scrutiny, need better oversight. Last week, KRQE revealed that a “Children, Youth and Families Department worker is under investigation after she was caught on camera speeding down a highway in a state car with two young kids in the backseat.”

Earlier this month, The Philadelphia Inquirer reported that New Jersey tracks hundreds of its employees, “gathering data from their cellphones about when they clock in, where they are at any given moment, what route they take to get there, how fast they drive, and whether they make unauthorized stops.” Field Force Manager, an application introduced by Verizon Wireless in 2006, is also used by municipalities in the Garden State.

Wal Mart: we hate you, now please come back!

Mon, 2015-04-27 14:49

Liberals generally don’t care for Wal Mart. In fact, egged on by the left-wing Green “Chamber of Commerce,” the Las Cruces City Council recently rejected a proposal to rezone some land for a Wal-Mart.

According to an editorial from the Las Cruces Sun-News, the City Council denied the re-zoning even though the change had been approved 6-0 by the Planning and Zoning Commission, and even though the nature of that part of town is clearly changing from farmland to growing neighborhoods in need of retail services.

So, Las Cruces is now too good for Wal Mart. Of course, Albuquerque’s City Council made a similar anti-Wal-Mart decision a few years back, so perhaps it is just a generally anti-business attitude that permeates this state and makes us poor? Nah, couldn’t be.

Elsewhere, however, labor unions are positively IN LOVE with Wal Mart. A to the story, the unions are asking the National Labor Relations Board to force Wal-Mart to reinstate employees at five stores, accusing the retailer of closing the locations to retaliate against workers for attempts to organize for better pay and benefits.

Wal-Mart Stores had announced that it was temporarily closing five stores in Texas, Oklahoma, Florida and California to fix plumbing issues.

Another story about the closed Wal Marts made it seem like the city of Pico Rivera, CA, would wither away if their now-closed Wal Mart doesn’t reopen. According to the LA Times, the Mayor Gregory Salcido said:

“It’s a severe blow to our community, certainly, with the local economy, the homes and families, in terms of those people that were counting on those paychecks.”

With 530 workers, the Wal-Mart store is the city’s second-biggest employer, topped only by the El Rancho Unified School District. Pico Rivera’s nearly 64,000 residents have a median household income of almost $57,000, about average for the county.

Salcido estimated that Pico Rivera receives about $1.4 million a year in tax revenue from the retailer, potentially 10% of the city’s sales tax revenue. City officials, he said, are trying to figure out how to deal with the lost revenue if the store remains closed for at least six months, as Wal-Mart Stores Inc. has announced.

Of course, the unions aren’t benevolently attempting to reopen the store to help the town of Pico Rivera. They believe that Wal Mart fired the workers for attempting to unionize.

Perhaps this would be an appropriate place to note that Wal Mart is indeed good for workers.

New Mexico Senate Leader Happy with Status Quo

Mon, 2015-04-27 08:59

There is a battle under way in New Mexico over whether to be happy with the status quo or to enact free market reforms that will improve our state. Based on his efforts this session and his recent attack on me and my organization, it is clear that Sen. Michael Sanchez is in the former camp and I and my organization are in the other.

Sanchez seems to believe that he and his liberal allies will regain total control of New Mexico’s political system again soon and that this recent spate of political competitiveness is temporary. Unfortunately for Sanchez, increasing numbers of New Mexicans see that surrounding states with free market policies in place are generating jobs and prosperity for their citizens. They wonder why we can’t have the same here.

Young people wonder why they have to leave New Mexico to find a decent job. Parents wonder why they are forced to spend $11,000 per pupil annually (more than the US average according to the NEA) while their children attend schools that dramatically underperform those in other states.

Between January of 2009 and the end of 2014, Texas, a state that has “right to work” and lacks an income tax, grew its already robust employment base by 13 percent. New Mexico grew by just 1 percent. Each of New Mexico’s more economically-free neighbors generated far greater job growth during the same time frame. Our state has consistently underperformed its neighbors despite significant advantages in terms of federal investment and oil and gas resources.

The definition of insanity is often said to be “doing the same thing over and over and expecting a different result.” Sanchez’s “Ready to Work” plan was merely the same old big government policies that have led our state to the bottom of most good lists and the top of many bad ones. Despite decades of liberal control over our State’s public policies, New Mexico, according to the liberal Center for Budget and Policy Priorities, is the most unequal in the nation. (“Pulling Apart,” November of 2012)

Inequality wouldn’t be a problem if ours was a wealthy, growing state, but the public policies enacted by the Legislature over the years have made our state among the poorest.

My colleagues at the Rio Grande Foundation and I saw Sanchez’s “Ready to Work” plan (raise the minimum wage, increase the gas tax, more government spending) as misguided expansions of government. Interestingly, it appears that Sanchez’s fellow Senate Democrats were only lukewarm on the proposals as well.

The Senate passed only 9 of the 58 bills in their “Ready to Work” proposal. An astonishing 49 of their 58 “critical measures” never got to the Senate floor while 15 were never even scheduled for a hearing. Even a minimum wage hike proposed by Democrat Sen. Clemente Sanchez failed in Committee.

The House on the other hand, passed a variety of free market measures, many of which were based on my Foundation’s research. Aside from “right to work” these included school choice tax credits, alternative teacher certification and teacher licensure reforms, reduction in worker’s compensation for drunk/stoned workers, a regulatory framework for Uber/Lyft ride-sharing companies, and increased penalties for dealing food stamps.

None of these received floor votes in the Senate despite often receiving bi-partisan support in the House. And, while bi-partisan support for “right to work” was limited to one House Democrat, according to 2014 polling by Gallup 65 percent of Democrats nationwide support it. My organization’s ideas are common-sense and much-overdue reforms. Adherence to free market principles hasn’t made New Mexico poor, politicians’ embrace of big government has.

If Sanchez is so sure that reforms like “right to work” and school choice are unpopular and bad for New Mexico, he should have had the courage to put senators of both parties on the record by holding public votes. My suspicion is that more New Mexicans – and their representative – want change than Sanchez thinks.

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

Unemployment Insurance: Another Missed Opportunity

Fri, 2015-04-24 12:45

The Pew Research Center reports that unemployment-insurance funds “are still clawing their way back to solvency,” with “many state officials and labor analysts … concerned about what will happen to jobless benefits once another economic downturn arrives.”

Last month, Carol Wight of the New Mexico Restaurant Association explained that New Mexico’s UI fund “is inadequate even though many employers’ premiums have more than tripled this year.” Between March 2008 and March 2014, the balance plunged from $557 million to $49 million. It’s recovered a bit in the last year, but a downward trajectory will return if layoffs intensify in the state’s oil-and-gas sector.

HB482 was drafted to address the UI challenge. It would have reduces a claimant’s benefit from 53.5 percent to 45 percent of the average wage earned, and reduced the “total wage factor formula” to the percentage used by Arizona and Colorado — which is still more generous than Utah and Texas.

But the bill failed, and not because of State Sen. Michael Sanchez (D-Belen). It was voted down, 39-25, in the GOP-controlled House of Representatives.

New Mexico’s civil asset forfeiture success

Fri, 2015-04-24 08:36

By Paul J. Gessing | Watchdog Opinion

They say it’s better to be lucky than good. Of course, it’s even better to be lucky and good! That is exactly what happened in New Mexico during the 2015 legislative session with regard to reforming the process of civil asset forfeiture.

To recap, during the 2015 legislative session, New Mexico’s deeply-divided Legislature unanimously supported significant reforms to the state’s civil asset forfeiture laws. That bill was signed by Gov. Susana Martinez, a former prosecutor. The new law now represents the “gold standard” in terms of state efforts to rein in the much-abused process of civil asset forfeiture. It does so in the following ways:

  • A criminal conviction is required before property can be forfeited;
  • Provides additional due process protections to property owners, such as codifying an “innocent owner” presumption;
  • Places forfeiture proceeds in the general fund (as opposed to local law enforcement budgets);
  • Requires additional reporting and transparency to allow better oversight of forfeiture process;

So, what conditions made New Mexico, a state not typically known for policy innovation, the model for civil asset forfeiture reform?

A unique, left/right coalition: The Rio Grande Foundation is New Mexico’s free market policy think tank of which I am the head. We typically work on economic policy issues and even drew the wrath of union supporters and liberals during a debate over “right to work” earlier in New Mexico’s 2015 legislative session, but gave plenty of cover to Republicans.


Our institutional support was fortified by Hal Stratton, a Rio Grande Foundation board member, former New Mexico attorney general, and former legislator who was involved in passing the bill setting up the state’s civil asset forfeiture program in the 1980s.

The national public interest law firm Institute for Justice assisted with model legislation and a great deal of technical and strategic support.

The American Civil Liberties Union and Drug Policy Alliance were the more traditional supporters of civil asset forfeiture reform. Both, despite being national groups, have significant operations in New Mexico, and were able to rally grassroots support and provided the lobbying muscle to get the asset forfeiture bill scheduled and passed despite a very small window of opportunity.

A field general with deep knowledge of the issue: Brad Cates left New Mexico in the 1980s to work as a federal prosecutor in Texas and eventually become director of the Justice Department’s Asset Forfeiture Office in Washington from 1985 to 1989. He knows the civil asset forfeiture system and its history front and back. It didn’t hurt that he was counsel to the House Judiciary Committee during the 2015 legislative session, and that the sponsor of the bill was Zach Cook, chairman of that committee. Cates put his knowledge of civil asset forfeiture and its many abuses and problems to work there.

A national groundswell with local angles: In November of 2014, the New York Times reported on remarks by Harry S. Connelly Jr., then city attorney of Las Cruces. Connelly made several outrageous remarks before a meeting of local police agencies on the issue of civil asset forfeiture including, “We could be czars. We could own the city. We could be in the real estate business.” Connelly described in detail in his remarks how police should target more expensive goods for seizure.


There was also the 2010 case of the Skinners, an African-American father and son from Chicago who were traveling to Las Vegas, Nev., to rehab a house owned by a family member and do some gambling. The men were harassed by police on their trip through New Mexico and eventually had their cash seized and were unceremoniously dropped off at the airport with only enough money to fly home to Chicago.

The ACLU of New Mexico represented the men and was able to get their money back while also generating significant publicity about the abusive process.

A governor with aspirations: New Mexico Gov. Susana Martinez, a former district attorney in Las Cruces, was likely not predisposed to sign civil asset forfeiture reform. She waited until the last moment to sign the bill, doing so without public fanfare or ceremony. Her signing statement contains more criticism than praise for the legislation. But she signed it.

Now, her state is a national leader in restoring 5th Amendment protections for its citizens.

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New Mexico’s Corporate Income Taxes Remain High

Thu, 2015-04-23 16:29

While some on the left claim that Gov. Martinez’s tax cutting strategy has “failed,” the reality is that the corporate income tax reductions enacted a few years ago are only partially phased in as seen in the above map provided by the Tax Foundation.

As the map clearly shows, New Mexico’s corporate income tax rates remain the highest in the region.

Of course Winthrop Quigley of the Albuquerque Journal is correct in noting that tax cuts alone, especially temporary gimmicks enacted by business-unfriendly New York, won’t turn around the economy by themselves. Quigley fails to discuss what regulatory reforms (like Right to Work) might be able to actually reform New Mexico in the absence of tax cuts, but just because tax cuts are not a panacea doesn’t mean they can’t help spur economic growth.

Liberty on the Rocks – Albuquerque: Thursday, April 22nd 6 – 7:30pm

Wed, 2015-04-22 16:38
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. Liberty on the Rocks will take place on Thursday, April 23rd 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!

Viewpoint: Why Infrastructure Borrowing Won’t Fix a Weak Economy

Wed, 2015-04-22 10:42

In New Mexico, old economic-development habits are hard to break.

The pressure for a special legislative session to pass a capital-outlay bill exemplifies the political establishment’s inability to understand the policies that foster a dynamic and diversified economy. Republicans and Democrats, architects and artists, businesses and unions are complaining the 2015 regular session failed to appropriate hundreds of millions of dollars for what Sen. Michael Sanchez, D-Belen, called “critical community infrastructure.”

Construction/maintenance of roads, highways, libraries, airports, hospitals, museums and schools is reflexively viewed as an unalloyed good. But it’s important to remember that capital expenditures are funded not by a magical money tree, but income redistribution. Whether the infrastructure projects are paid for by the statewide property tax (general-obligation bonds), levies on natural resources (severance-tax bonds), the gas tax (transportation bonds), or general-fund revenue, there is no free lunch.

According to Edward Glaeser, an economics professor at Harvard, “Infrastructure investment only makes sense when there is a clear problem that needs solving and when benefits exceed costs.” But New Mexico’s capital outlays are not selected by an impartial panel of experts charged with pursuing the highest return on taxpayer investment. An investigation by the website New Mexico In Depth discovered that the Land of Enchantment “appears to be the only state that allows lawmakers to divide a set amount of money in a method often known as ‘pork-barrel politics.’” Reporter Sandra Fish spoke to the dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago, who averred that New Mexico’s system “certainly wouldn’t be in the textbooks about how to do capital improvement planning. In fact, it would be the illustration about how not to do capital improvement planning.”

At the close of the regular session, Gov. Susana Martinez charged that the failure to pass a capital-outlay bill “killed many jobs throughout the state.” But as a job creator, infrastructure consistently disappoints. A 2013 paper by George Mason University’s Mercatus Center found that unemployment for “those with the skills to build roads or schools … [is] often relatively low. Moreover, it is unlikely that an employee specialized in residential-area construction can easily update his or her skills to include building highways.”

The Heritage Foundation’s James Sherk believes that arguments for infrastructure as job creation and economic development “have little empirical justification.” Nationally, the labor analysts noted, “just over 300,000 Americans work in highway, street or bridge construction — less than the population of Wichita, Kansas.”

Employment once projects are completed can fail to meet expectations, too. Costly and underused, Spaceport America serves as a bitter reminder that the political process frequently produces unwise infrastructure.

Perhaps the most frustrating aspect of the public-infrastructure fetish is its failure to recognize a role for the private sector. As the Cato Institute’s Chris Edwards observed, “Before the 20th century … more than 2,000 turnpike companies in America built more than 10,000 miles of toll roads. And up until the mid-20th century, most urban rail and bus services were private.” Globally, there’s a back-to-the-future trend — for-profit entities are increasingly engaged in infrastructure, providing relief to taxpayers and impressive performance for users. Sometimes, full privatization is implemented. In other cases, businesses compete for management contracts of government-owned assets. It is neither a partisan nor an ideological development. Even the Center for American Progress, the White House’s favorite think tank, believes that “private investment is critical to improving the country’s infrastructure.”

At $3,470, New Mexico’s per capita indebtedness in 2013 was higher than each of its five neighbors. Yet the borrowing boom has not reversed the state’s struggles. We have yet to regain the number of jobs we had before the Great Recession, and the Census Bureau recently documented that New Mexico is losing population.

The failure to pass a capital-outlay bill in 2015 is not a crisis. Rather, it offers a moment of clarity for rethinking how and why the state borrows money for infrastructure projects. It also presents New Mexico’s policymakers with an opportunity to turn their attention back to tax reform, deregulation and a right-to-work law — cost-free and proven economic-development measures that promise far better results than “public investments.”

D. Dowd Muska ( is research director of New Mexico’s Rio Grande Foundation, 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.

Steve McKee Luncheon – What Reagan Didn’t Realize – Albuquerque

Tue, 2015-04-21 14:10

Rio Grande Foundation Speaker Series Event:
What Reagan Didn't Realize

Click here for registration form.

Please join the Rio Grande Foundation for our first speaker of 2015, Steve McKee. Steve is president of McKee Wallwork + Company an integrated marketing firm that specializes in revitalizing stalled, stuck and stale brands. He has also been a long-time columnist at

He is a long-time resident of New Mexico.

In his first inaugural address, Ronald Reagan famously said, "Big government isn't the solution to the problem. Big government is the problem.”; In his presentation, McKee will argue that while Reagan was right, even he may not have fully appreciated the breadth and depth of the reasons why.

In this provocative address based on a decade of proprietary nationwide research, McKee will illuminate the destructive undercurrents that take (and keep) organizations of all types down, and point out how the organizational dynamics that bedevil private industry make effective big government effectively impossible.

  • Location:  Marriott Pyramid 5151 San Francisco Rd NE, Albuquerque, NM 87109
  • When:  Thursday, May 14, 2015, 12:00 noon to 1:00pm
  • Cost:  $25 until Monday, May 11, 2015; $35 after the 11th

Steve McKee is the author of When Growth Stalls: How it Happens, Why You're Stuck and What To Do About It, an award-winning business book now published in four languages, and Power Branding: Leveraging the Success of the World's Best Brands. A marketing strategist for nearly thirty years, Steve has held executive positions at notable agencies including NW Ayer, Della Femina, and a division of McCann-Erickson Worldwide.

His firm made the Inc. 500 list of the fastest-growing private companies in America its first year of eligibility, has twice won the prestigious Effie Award for marketing effectiveness from the American Marketing Association, and has been recognized by Advertising Age as one of ten top small agencies in the nation. Steve has been published or quoted in The New York Times, USA Today, Advertising Age, Adweek, Investor's Business Daily and The Los Angeles Times, among others, and he has appeared on CNBC, ESPN2, CNNfn, Bloomberg, and network television affiliates across America.

Click here for registration form.

How did Transparency Fare in the 2015 New Mexico Legislature: column for NM InDepth

Tue, 2015-04-21 11:25

How did transparency and open government fare during New Mexico’s 2015 legislative session? Prior to the 2015 session, I urged legislators to consider a variety of reforms. Some of my ideas were discussed and acted upon while others were ignored completely. Change comes slowly in politics and that is doubly true in Santa Fe.

Prior to the session, I argued for a formal institutional process of recording and archiving committee hearings. Gov. Martinez’s office has handled this task with legislators taking varying degrees of umbrage at the Executive Branch’s seeming intrusion on Legislative priorities. Unfortunately, the very fact that the Governor’s office has handled this task became the latest excuse for some legislators to avoid taking it on themselves.

We hope that as Gov. Martinez moves into the latter part of her 2nd term in office (without guarantees that future governors will wish to record and archive committee hearings), that the Legislature will take action to formalize its recording and archiving procedures.

Unfortunately, the bad news is committee archiving was the only consideration that my pre-session recommendations relating to government openness and transparency received. Prior to the session, I approached some legislators urging them to address the onerous number of signatures required for 3rd party candidates to run for the Legislature.

New Mexico is the only state that forces the nominee of a qualified party to submit a petition to achieve ballot access and the signature requirement for Libertarians, Greens, and other third parties is several multiples that for Republicans or Democrats.

Lest you think these signature requirements are not onerous, according to Ballot Access News, New Mexico had fewer third party candidates on the ballot for the last 13 years than any other state. This, despite the fact that “independent” is the single-largest (and fastest-growing) voting bloc in our state.

Unfortunately, asking McDonald’s and Wendy’s to make it easier for Burger King to set up shop is just as difficult as it sounds. Legislation to make the ballot access process fairer for third parties was not considered in 2015.

Another transparency issue that other states are considering and adopting while New Mexico stands flat-footed is the allowance of remote legislative testimony. Two large, Western states, Alaska and Nevada, have allowed remote testimony before legislative committees for years. Washington State and neighboring Colorado have recently adopted remote testimony for legislative hearings.

Since New Mexico is the 5th-largest state in land area and among the least populous states, allowing witnesses to testify remotely After all, not everyone has the time or freedom to spend a day or two to drive from Hobbs or Las Cruces to attend legislative hearings. There are also plenty of expert witnesses around the nation whose schedules don’t permit them to travel all the way to New Mexico to spend between 5 and 30 minutes testifying on a bill.

Shouldn’t New Mexico legislators have the best information available to them from top experts and concerned citizens, not just from those who can get off from work for a day?

Lastly, prior to the session, I urged legislators to consider adding the names of all government workers to the Sunshine Portal listing of government employees and salaries. This was the case prior to a judge’s 2012 ruling (at the behest of the AFSCME government employee union) which required the names of non-exempt government workers’ names to be pulled off of the Portal.

As with these other issues, nothing happened with this issue during the 2015 session. Dozens of other states and literally hundreds of local governments post this (publicly-available) information online. Again, Gov. Martinez has taken it upon herself to post this information elsewhere on the Internet at: However, a judge ruled that the law did not provide for this public information to be posted on the Sunshine Portal. That should change.

On several other issues, the Legislature took important actions on transparency during 2015, but when it came to these priorities as outlined by the Rio Grande Foundation and other groups, not much was achieved.

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. The views in this column do not reflect the views or opinions of New Mexico In Depth.

New Mexico to Retirees: Drop Dead

Mon, 2015-04-20 11:40

According to Kiplinger (hat tip to Albuquerque Business First), only one state — California — is a worse place to retire than New Mexico.

In a new analysis, the business and finance publisher warns, “When it comes to taxes, the Land of Enchantment presents a lackluster reality to its retired residents.”

The gross receipts tax was singled out as a villain. The rate for New Mexico’s peculiar form of sales taxation is 8 percent or higher in some locales, and is obviously a deterrent for cost-conscious senior citizens.

Kiplinger’s conclusion: “If you’re eyeing the Southwest for its sunny climate and multicultural vibe, check out Arizona, one of our 10 most tax-friendly states for retirees, instead. The Grand Canyon State does not tax Social Security benefits … and its top income tax rate of 4.54% is lower than New Mexico’s 4.9%.”

The profound silliness of “divesting” UNM from oil and gas

Mon, 2015-04-20 10:03

I recently brought up a variety of ridiculous aspects relating to divesting UNM’s investments from the oil and gas industry. Mark Mathis, a film maker and someone who “gets” oil and gas, had a very humorous column in the Albuquerque Journal mocking the efforts.

The effort to divest is being pushed by the profoundly radical which is the creation of the radical environmentalist Bill McKibben.

Unfortunately for McKibben and his radical allies, Americans are less concerned (and rightfully so) about the state of the environment, than in years past (according to Gallup):