Errors of Enchantment Blog Postings

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Why is New Mexico not realizing its potential?
Updated: 7 min 29 sec ago

Federal Government Should Take a Pass on Albuquerque’s Proposed Bus Rapid Transit System

Mon, 2015-07-20 10:03

(Albuquerque) The proposed bus rapid transit (BRT) line is a solution in search of a problem, and our bankrupt federal government should steer clear of providing 80 percent of the infrastructure costs for this unnecessary project. That’s the conclusion of a new Rio Grande Foundation report, “Throwing Taxpayers under the Bus,” which analyzes the case for bus rapid transit along Central Avenue in New Mexico’s largest city.

“Throwing Taxpayers under the Bus,” authored by Rio Grande Foundation Research Director Dowd Muska, argues that the current Rapid Ride bus system along Central has been quite successful in generating ridership. Muska wonders what benefits, in terms of mobility, the new system will provide that the current system does not.

In fact, as Muska argues, in addition to the temporary construction which would tie up traffic throughout the Central corridor, the BRT would limit motorists’ left turns onto Central while removing two traffic lanes to make way for buses. The loss of traffic lanes would result in the elimination of parking along some of Central’s busiest corridors.

The cost estimate being put forth by the city today is likely to rise once construction gets underway, argues Muska. “Throwing Taxpayers under the Bus” cites Willie Brown, a former California politician, who once said, “In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”

Ultimately, as Muska notes, BRT advocates are less concerned about mobility within the Central Corridor than they are about “redevelopment” in the area. Advocates claim that so-called “Millennials” are avoiding Albuquerque in search of more densely packed urban areas.

This claim simply doesn’t hold water. As Muska points out, sprawling Western cities such as Oklahoma City, Phoenix, and Dallas are growing rapidly and attracting young people. Albuquerque’s poor job growth is the likeliest reason for the city’s ongoing struggles to draw and keep Millennials.

With Washington trillions of dollars in debt, “Throwing Taxpayers under the Bus” concludes that an Albuquerque transit project in need of a purpose is unworthy of federal taxpayer dollars.

When did “work” become a “four-letter-word” for liberals? (including Gessing testimony on Martinez food stamp proposal)

Fri, 2015-07-17 09:29

I spent July 16 driving down and back to Las Cruces to testify before the Legislative Health and Human Services Committee hearing on the Martinez Administration’s proposal to re-impose work, volunteer, or education attainment requirements for able-bodied adults without children and adults without small children.

Somehow, we have gotten to the point that asking able-bodied adults to improve their standing is simply beyond the pale because the liberal advocates that testified and all the Democrat legislators who attended spoke against the proposal.

An article from the Las Cruces Sun-News details the issue and Democrats’ opposition nicely.

Ironically, one of the main points the opponents of the work requirements repeatedly brought up was that New Mexico’s job growth is lagging its neighbors. While a true statement, one wonders if they realize that it is their policies that have put New Mexico in this sorry position. My testimony in support of the Administration’s work requirement is below:

Testimony on New Mexico’s Plan to Re-impose Work Requirement on Food Stamp (SNAP) Recipients
By Paul J. Gessing

Since 2009, New Mexico has waived federal work requirements tied to the Supplemental Nutrition Assistance Program (SNAP).

The Martinez Administration’s proposal is to reinstate the rules limiting able-bodied people to three months of SNAP benefits unless they work or attend job training classes at least 20 hours per week. The new requirements would be imposed on parents of children older than six-years to complete up to 80-hours a month of activities such as community work to continue to receive the SNAP benefits. It would also apply to teens who are not in school.

Over 21 percent of all New Mexicans receive food stamps, behind only Mississippi.
Somewhere between 26,000 and 80,000 people could be impacted by the proposal. According to a September 2014 report from the Pew Center, no fewer than 17 states were working to re-instate their work requirements.

Other states have seen dramatic effects in terms of reduced dependency from re-imposing food stamp work requirements. In 2014, for example, Maine re-imposed a three-month limit (out of every three-year period) on food stamps for a group often known as Abawds — able-bodied adults without minor dependents — unless they work 20 hours per week, take state job-training courses or volunteer for about six hours per week. The number of Abawds receiving food stamps in Maine has dropped nearly 80 percent since the rule kicked in, to 2,530 from about 12,000.

Maine’s requirement has been in effect for about a year now and I have heard no reports of even a single person starving as a result of this policy change.

The truth is that food stamps were meant to provide a bridge for people who are between jobs or have fallen on hard times. They are not a way of life. Completely removing oneself from the work or volunteer forces hurts the very people that SNAP is supposed to help. Sitting at home watching television or waiting for the phone to ring is no way to look for work.

Indeed, while unemployment rates in New Mexico remain somewhat higher than the national average at 6.2%, the rate in neighboring Texas is currently 4.2% which economists consider to be “full employment.” Even New Mexico’s largest cities have reasonably-low unemployment rates with Albuquerque at 4.9%, Santa Fe at 4.2% and Las Cruces at 5.2%.

It would seem that the only thing one truly needs to do to get a job in New Mexico is to move to one of her major cities. Absent that, there are opportunities aplenty in neighboring Texas.

The Martinez Administration’s proposal is eminently reasonable and encourages self-reliance rather than dependency which is very important. What doesn’t work is spending $80 billion a year on a rapidly-expanding program and imposing little or nothing in the way of requirements.

Lastly, food stamps are not an economic stimulus. The money has to come from somewhere and dollars that are taxed away and spent on food stamps can no longer be invested in our economy. Welfare programs do not stimulate the economy. Average New Mexicans working every day and honing their skills will make our state better and more prosperous.

Thank you for your time.

‘Celebrating’ Nine Years of Choo-Choo Craziness

Fri, 2015-07-17 08:59

The New Mexico Rail Runner Express threw itself a birthday party today. Riders in Albuquerque and Santa Fe enjoyed “snacks and giveaways,” as the rail line marked its ninth anniversary.

“Trax” was at the Downtown ABQ Station, distributing hugs.

“Free” luggage tags!

In a press release announcing the festivities, the Rio Metro Regional Transit District listed some “fun facts” about the Rail Runner, including the “number of bicycle lockers at NMRX stations” and “Veterans Annual Passes issued to VA veterans from November 11, 2014 to July 1, 2015.”

One number that went unmentioned: 9.9. That’s the percentage of the Rail Runner’s 2014 operating costs that were covered by fares.

Who paid for the rest of the expenditures? Look in the mirror.

It’s Not the Costs — So What Is It?

Tue, 2015-07-14 18:59

The Tax Foundation’s latest look at “the real value of $100 in each state” should generate more frustration for New Mexico’s economic-development establishment.

Costs in the Land of Enchantment are 21 percent cheaper than in New York, 18 percent cheaper than in California, and 8 percent cheaper than in Virginia. With the exception of Oklahoma, a hundred bucks goes further in New Mexico than it does in each of its neighbors.

Great weather, friendly folks, stunning scenery, a strategic location, and low costs — the Rio Grande Foundation has long maintained that New Mexico has the potential to be an economic powerhouse.

But excessive occupational licensing, an all-powerful PRC, no right-to-work law, a cumbersome tax on gross receipts, a work-ethic-sapping welfare complex, too much federal control over land and employment, and trendiness-driven corporate welfare as economic development? It all adds up to a spectacularly ineffective prescription for wealth creation and job growth.

Tom Palmer’s “Government Control v. Self Control” presentation in Albuquerque

Tue, 2015-07-14 16:16

The Rio Grande Foundation hosted Tom Palmer of the Atlas Network for a luncheon talk. Palmer was on his way back from giving a similar talk at FreedomFest in Las Vegas. Palmer travels the world assisting free market think tanks. His Albuquerque talk is below:

New Mexico County Payroll Listing 2014

Tue, 2015-07-14 10:48

(Albuquerque) In an effort to improve government transparency throughout New Mexico, the Rio Grande Foundation has requested and published payroll data for all New Mexico Counties.

Unfortunately, several counties were unable or unwilling to comply with the request. We hope that residents of those counties will put pressure on them to make information available to the public. New Mexico’s largest county, Bernalillo, is a leader in providing transparency.

To find the data for your county, just click on the link below:

Bernalillo County

Catron County

Chaves County

Cibola County

Colfax County (not available)

Curry County

De Baca County (not online)

Doña Ana County

Eddy County

Grant County

Guadalupe County

Harding County

Hidalgo County

Lea County

Los Alamos

Lincoln County

Luna County

McKinley County

Mora County

Otero County

Quay County

Rio Arriba County

Roosevelt County

Sandoval County

San Juan County

San Miguel County

Santa Fe County

Sierra County

Socorro County

Taos County

Torrance County

Union County

Valencia County


Friedman Legacy Day 2015 – New Mexico’s Demographic Dilemma

Mon, 2015-07-13 21:28

Rio Grande Foundation's Friedman Day 2015 Breakfast Discussion of New Mexico's
Impending Demographic Challenges
and How Policymakers Can Cope
Presentation by Matthew Ladner Free Registration Form

New Mexico's elderly population is set to explode in the years ahead according to new demographic research by Dr. Matthew Ladner. According to Ladner, New Mexico's working age will shrink as a percentage of the total population, with the Land of Enchantment projected to have the highest total age dependency ratio in the nation in 2030.

In New Mexico's case the increase in the total age dependency ratio projects to be entirely due to a near doubling of the elderly population between 2010 and 2030.

Unfortunately, despite reforms enacted under Gov. Susana Martinez and some modest improvements in students' educational performance, New Mexico's school age population continues to under-perform.

What does New Mexico's demographic situation – driven by an aging population – mean for the state in the years ahead? Is New Mexico's workforce adequately trained to support a growing group of dependents? What can realistically be done to eases this demographic transition?

Celebrate Dr. Milton Friedman's birthday with us at a special breakfast event on what would have been Dr. Friedman's birthday, Friday, July 31.

  • Where: Auditorium of the Albuquerque Museum which is located at 2000 Mountain Road NW.
  • When: 7:30am to 8:30am.
  • Cost: There is no charge for this event and we will have coffee and donuts. Please register online by clicking here. It's quick and it's free!
  • Who: Dr. Matthew Ladner is Senior Advisor of Policy and Research with the Foundation for Excellence in Education. He previously worked with the Rio Grande Foundation to bring the “Florida Model” for education reform to New Mexico.

Dr. Matthew Ladner is the Senior Adviser of Policy and Research for the Foundation for Excellence in Education. He previously served as Vice President of Research and Goldwater Institute. Prior to joining Goldwater, Dr. Ladner was director of state projects at the Alliance for School Choice.

Dr. Ladner has written numerous studies on school choice, charter schools and special education reform. Most recently, Dr. Ladner authored the groundbreaking, original research Turn and Face the Strain: Age Demographic Change and the Near Future of American Education, outlining the future funding crisis facing America's K-12 public education funding. He also coauthors the American Legislative Exchange Council's annual Report Card on American Education: Ranking State K-12 Performance, Progress and Reform.

Dr. Ladner has testified before Congress, the United States Commission of Civil Rights and numerous state legislative committees. He is a graduate of the University of Texas at Austin and received both a Masters and a Ph.D. in political science from the University of Houston. Dr. Ladner is a Senior Fellow with the Foundation for Educational Choice. He lives in Phoenix, Arizona.

Free Registration Form

Checking in on New Mexico’s Electricity Architecture

Mon, 2015-07-13 17:54

Natural gas may now be the most common fuel for electricity generation nationally, but in New Mexico, coal is still king. (Don’t tell the Sierra Club.)

Last week, the U.S. Energy Information Administration released 2013 data for state-level electricity pricing, generation, and fuel sources.

Slightly more than two-thirds of all power generated in New Mexico in 2013 originated in coal-fired plants. Natural gas supplied 25 percent of our juice. Wind produced 6.1 percent. The contribution of solar, in the fourth-sunniest state? A whopping 1.1 percent.

As for regional competitiveness, the retail price for a kilowatt hour in New Mexico was 9.25¢. Not the costliest, but there’s room for improvement. Neighbors Oklahoma (7.87¢), Utah (8.15¢), and Texas (8.66¢) were cheaper, while Colorado (9.88¢) and Arizona (10.14¢) were more expensive.

Television interview: 2015 New Mexico Legislature special session recap

Fri, 2015-07-10 15:25

Rio Grande Foundation president Paul Gessing recently sat down with KNAT TV to discuss the results of the 2015 special legislative session and its passage of a capital outlay bill and a small tax cut package.

New Mexico’s Fiscal Fitness: Not Impressive

Fri, 2015-07-10 11:43

“Ranking the States by Fiscal Condition,” just issued by George Mason University’s Meractus Center, offers a valuable survey of revenue and expenditures in New Mexico. As one might expect, the news isn’t pretty. The state isn’t in the company of such perennial deadbeats as New York, Connecticut, New Jersey, and Illinois, but there’s plenty of room for improvement.

Author Eileen Norcross analyzed five “dimensions of solvency” in order to determine overall fiscal condition:

* Cash solvency looks at whether a state can “pay bills that are due over a 30-to-60-day horizon.” New Mexico fares well in this category, ranking 19th.

* Budget solvency examines “whether the state can meet its fiscal year obligations.” The Land of Enchantment performs quite poorly here, landing in 46th place.

* Long-run solvency is determined by three metrics: net asset ratio, long-term liability ratio, and long-term liabilities per capita. New Mexico achieves it best score in this category: 14th.

* Service-level solvency “attempts to capture how much ‘fiscal slack’ states have by measuring the size of taxes, expenses, and revenues relative to state personal income.” The results for New Mexico are abysmal — only two states fare worse.

* Trust fund solvency is an estimate of “total indebtedness in the form of bonded debt, risk-adjusted pension liabilities, and [other post-employment benefits]. Ditto here, with a downright scary rank of 48th.

Overall, New Mexico ranks 36th in fiscal condition. Not surprisingly, each of our neighbors posted a superior score: Arizona (32nd), Colorado (22nd), Texas (19th), Utah (11th), and Oklahoma (9th).

In June, RTW Scores Another Victory

Wed, 2015-07-08 18:05

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.”

Last month, of 18,316 projected jobs, 13,275 — 72.5 percent — were slated for right-to-work (RTW) states:

Eighteen domestic companies based in non-RTW states disclosed investments in RTW states. Just two announcements went the other way.

There were three domestic relocations from compulsory-union to RTW states. Zero RTW-to-non-RTW moves.

It was another big month for foreign direct investment. Here again, the disparity was wide. Twenty-eight investments were made in RTW states, but only nine in non-RTW states.

Marquee RTW wins included Sealed Air’s relocation from New Jersey to Georgia (1,200 jobs), a big expansion for Switzerland-based UBS in Tennessee, and California-based Google’s decision to build a data center in Alabama.

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.

Sandoval Co. Treasurer using taxpayer dollars for office trinkets, pamphlets

Wed, 2015-07-08 10:43

Public officials should use taxpayer dollars for the benefit of the citizens they serve, not for self-aggrandizement. I spoke to Chris Ramirez at Channel 4, KOB TV on what certainly seem to be some issues in the Sandoval County Treasurer’s office.

Further thoughts on “free trade” and the recent debate over “Trade Promotion Authority”

Tue, 2015-07-07 16:49

I recently wrote this article in which I made the case for free trade (broadly-speaking) as well as the export of crude oil and liquefied natural gas. The case for crude exports is relatively simple and I should have mentioned that New Mexico Congressman Steve Pearce has been an outspoken advocate for ending the decades’-old ban on exporting American crude. President Obama could, with the use of his pen, end the ban on crude exports.

The recent votes on behalf of “Trade Promotion Authority” was quite a bit more nuanced. As I noted, Congressman Pearce voted against it, but that does not make him hostile to free trade. Rather, Pearce and 53 of the most conservative Republicans joined most Democrats in opposing the bill which passed the House narrowly. Final vote here. The split was significant among conservative policy organizations with Americans for Tax Reform and National Taxpayers Union supporting TPA and the respected Heritage Foundation and some “Tea Party” groups opposed giving President Obama such negotiating authority.

Trade Promotion Authority is a tool that Congress has granted presidents dating back to 1975 for the purpose of negotiating trade agreements with Congress having an “up or down” vote on the issue (as opposed to individual members of Congress “negotiating” the agreement by tacking special interest provisions onto each agreement, thus killing them. Of course, the Obama Administration has been less-than forthcoming about a wide variety of uses of executive power and conservative opponents of TPA including Pearce expressed concern over Obama’s “near reckless disregard for the rule of law.”

So, to be clear, Congressman Pearce had a significant portion of the conservative community with him in opposing TPA. It is a close call. We at the Rio Grande Foundation certainly appreciate the fact that conservatives don’t have a lot of faith in President Obama negotiating an agreement that benefits American businesses and consumers, especially when he has sat on the crude export issue for so long. We applaud Congressman Pearce for his principled stand regardless.

Fearing Another BRAC Attack

Tue, 2015-07-07 13:28

New Mexico’s heavy — and unsustainable — reliance on federal largesse was well illustrated by Curry County Commissioner Tim Ashley’s recent trip to D.C. for “At a Crossroads: The Future of Defense Communities and Installations.”

The three-day conference was sponsored by the Association of Defense Communities, a taxpayer-subsidized organization that “unites the diverse interests of communities, state governments, the private sector and the military on issues of base closure and realignment, community-military partnerships, defense real estate, mission growth, mission sustainment, military privatization, military families/veteran support and base redevelopment.”

Before leaving for Washington, Ashley told the Clovis News Journal that the association was “instrumental” in helping Cannon Air Force Base escape the last round of the Base Realignment and Closure (BRAC) process. The Pentagon wants another dose of BRAC, but eternally vigilant about preserving their fiefdoms, politicians in the Senate and House of Representatives have been able to block the proposal.

As government expenses go, Ashley’s trip wasn’t large. It cost taxpayers $2,673.03 in total, including $1,127 for airfare and $1,325.91 for three nights of lodging. But it did reveal that a reflexive desire to preserve — if not expand — federal facilities continues to infect New Mexico’s elected officials.

Fighting the military’s desire to unload surplus and/or duplicative installations is useful for securing votes and boosting the image of economic-development bureaucracies. But it’s a disappointing distraction from the need to pursue policies that foster a vibrant, growing private sector in the Land of Enchantment.

More Gloom for the Boondoggle-in-the-Desert

Mon, 2015-07-06 16:03

If it weren’t for bad news, Spaceport America wouldn’t have any news at all.

June brought a number of dismal developments for the taxpayer-funded facility:

1) A KRQE report found that New Mexico’s boondoggle-in-the-desert has “a serious competitor chomping at [its] heels from a private spaceport in far West Texas.” After years of secrecy, Jeff Bezos, the Amazon billionaire, is promoting “his personal rocket company, Blue Origin.”

2) Alabama’s governor announced “a series of preliminary studies to assess the feasibility of landing Sierra Nevada Corporation’s Dream Chaser spacecraft at Huntsville International Airport.”

3) Houston Spaceport earned licensing approval from the FAA, and the city’s airport bureaucracy “now turns its attention toward securing partnership opportunities with leading companies operating within the aerospace industry.”

4) Diana Alba Soular of the Las Cruces Sun-News reported that the yet-to-be-completed southern road to Spaceport America “will be delayed because surveying work … didn’t align with the corridor studied in a key environmental review.”

Isn’t it time for New Mexico’s politicians to admit that Spaceport America is a failure, and hire a liquidator to get taxpayers back some of their “investment”?

Americans Are Moving — Just Not to New Mexico

Thu, 2015-07-02 10:41

Last week the Pew Research Center’s “Stateline” website noted some good news for U-Haul: “Americans are picking up and moving again as the recession fades, personal finances improve and housing markets recover. Counties in Nevada, Arizona, eastern California and Tennessee also saw some of the nation’s biggest growth in movers last year.”

We already knew that New Mexico was one of only six states to lose population between 2013 and 2014. But Pew’s granular analysis reveals the extent of the problem. Twenty-four of the state’s 33 counties lost population. Doña Ana County neither gained nor lost residents, so just eight counties saw positive migration. Growth in Bernalillo County, where about a third of New Mexicans live, was a dismal 0.1 percent.

Of Groceries, Ray Guns, and the Gross Receipts Tax

Wed, 2015-07-01 13:21

Happy New Fiscal Year. Ready for higher taxes?

Starting July 1, furniture, haircuts, toys, shoes, lawn care, and milkshakes will be more expensive for most New Mexicans. The gross receipts tax (GRT), the dominant source of local-government revenue, will rise in many communities, including Albuquerque, Rio Rancho, Las Cruces, Roswell, Las Vegas, Deming, and Silver City.

In Santa Fe, the rate is slated to increase from 8.1875 percent to 8.3125 percent. But not if the city has its way. A few weeks ago, the City Different filed a taxpayer-friendly lawsuit to block the GRT hike the county adopted in March. Citing state statutes, Santa Fe — as well as Española and several local businesses — allege that “within the boundaries” of incorporated Santa Fe County municipalities, the tax should not apply.

It’s up to the courts to decide the validity of the lawsuit. What’s not in dispute is that the the city-county faceoff would not exist were it not for governors’ and legislators’ never-ending tinkering with the GRT. When Santa Fe’s commissioners adopted the one-eight-of-a-cent tax increase three months ago, it was justified as a way to raise money to compensate for funds the state would no longer provide. The soon-to-be-ended subsidy was created to ease the fiscal pain of the 2005 removal of groceries from the GRT.

A bit confused? It’s understandable. The GRT is less a revenue-raising system than a political plaything, a mechanism for elected officials to perpetually penalize and reward behaviors, purchases, and investments in the Land of Enchantment. Boosting jobs, growing incomes, luring entrepreneurs, providing tax relief for the poor — it’s all achievable, we’re told, if visionary politicians make the proper adjustments to GRT rates, deductions, and exemptions.

Every New Mexican buys groceries, but very few of us acquire ray guns. The Pentagon does, and with growing interest in directed-energy weapons, the recently completed special legislative session produced a GRT deduction for receipts earned from producing armaments that use “the frequency spectrum, including radio waves, light and x-rays.” The perk will benefit defense contractors, and presumably, “attract new projects and employers to New Mexico and increase high-technology employment opportunities” — boilerplate language for the economic-development schemes frequently embraced by both political parties in New Mexico.

Directed-energy devices might be the future of defense. But perhaps they’ll prove to be of limited value to warfighters. Are state legislators qualified to make the right call? If history is any guide, the answer is no. Unintended consequences are inevitable when politicians fiddle with the tax code.

That brings us back to the GRT and groceries. In 2013, Dick Minzner, a former secretary of the New Mexico Taxation and Revenue Department, and Brian McDonald, a former director of UNM’s Bureau of Business and Economic Research, concluded that the effect of the food-tax exemption “has been the opposite of that intended,” because “by providing “only limited benefit to the poorest … of our households, combined with a tax increase on all other purchases, [it] probably made our tax system more regressive by most measures.”

The rates for New Mexico’s GRT are far too high. And the levy’s broadness induces pyramiding, which legislative analysts noted “occurs when the GRT is applied to business-to-business purchases of supplies, raw materials, equipment, creating an extra layer of taxation at each stage of production.” But as a policy brief written by the left-wing organization New Mexico Voices for Children advised more than a decade ago, “Piecemeal tax policy doesn’t work because tax systems are more than the sum of their parts.” Exactly. The GRT has been meddled with enough. It’s time for a simpler, more affordable, and pro-growth gross receipts tax.

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.

Freer trade would be good for New Mexico’s economy, oil and gas industries

Mon, 2015-06-29 16:15

No matter what one thinks about recent battles over Trade Promotion Authority and the Trans Pacific Partnership, freer trade would be good for New Mexico’s main private sector industry (oil and gas). In this case, as I argue below, freer trade would impact the industries from different angles.

When it comes to New Mexico’s economy, there are no bigger players than the oil and gas industries which, combined, contribute 31 percent of the general fund. Natural gas prices remain at historically-depressed levels. Since spiking during the winter of 2014 when the East Coast of the United States saw a series of cold snaps, the Henry Hub price has been on a steady decline. Throughout 2015, prices have been below the historically-low $3/mmbtu line.

Oil prices on the other hand, were elevated until July of 2014 when prices began a steep slide from $100/barrel to less than half that price by January of 2015.

Unfortunately for the industry and contrary to the beliefs of many Americans (at least when prices are elevated), oil and gas producers have little control over the price point at which they sell their product. Collectively, the oil and gas industries can (and have) cut production, but this is a painful and unappetizing process.

The best solution for the oil and gas industries (and New Mexico’s economy) is the opening of new markets for these products through freer trade. Expanded trade could add stability and economic health to the oil and gas industries in New Mexico.

The best long-term opportunity for natural gas producers involves a trade agreement with eleven other countries with ties to the Pacific Rim: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam known as the Trans-Pacific Partnership (TPP).

Interestingly, given what the TPP could mean for New Mexico’s economy, especially natural gas producers, New Mexico’s Congressional delegation did not support trade promotion authority (TPA) which allows presidents to negotiate an agreement with an up-or-down vote in Congress on approval. After being rejected once by the House, was narrowly approved. This approval came despite the fact that Republican Steve Pearce joined New Mexico’s liberal Democrats in the House in voting “no.”

TPP could have a significant, positive impact on American natural gas producers. Japan, for example, which is party to the TPP, is a huge potential market for producers. Natural gas prices are triple or more those in the United States.

“The TPP,” as the Sierra Club which is hostile to exporting liquefied natural gas notes, “would mean automatic approval of LNG export permits—without any review or analysis—to TPP countries. And many TPP countries would likely be quite interested in importing LNG from the United States…”

There are some philosophical arguments to be made even by staunch free market advocates against regional trade agreements, but when it comes to the long-term future of New Mexico’s natural gas producers, there are few better opportunities on the horizon than Japan. TPP is the best near-term entrée into that market.

New Mexico’s oil producers could gain access to lucrative new markets with nothing more than a stroke of President Obama’s pen.

As American oil production has skyrocketed in recent years, the prohibition on US exports of crude oil adopted in 1975 has become an anachronism. While the US oil market is complex, the new, “tight” oil being produced is lighter and sweeter [3] than what has previously been refined in American refineries. Those refiners now can’t find enough refiners to process it. Exports would allow the appropriate oil to reach the international market where it could be processed and sold.

According to the group Producers for American Crude Exports (PACE), allowing oil exports would generate nearly 1,000 new industry jobs in New Mexico by 2018 adding an additional $46 million annually to the State’s economy. Of course, while New Mexico is a significant oil producer, the US as a whole could see many times that amount in terms of economic benefits.

The arguments against exporting crude simply do not hold up under scrutiny. Even radical environmentalists should desire that scarce oil resources be put to their most efficient use. And, because of the disconnect between the grades of oil that are refined in the US relative to what is now being produced, the impact on American motorists in terms of higher prices would be minimal or non-existent.

Free trade is a good thing for America. The oil and gas industries are no exceptions.

Gessing is president of the Albuquerque-based Rio Grande Foundation

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Steve McKee’s talk: How New Mexico Can Beat Texas for Real

Fri, 2015-06-26 09:10

New Mexico businessman and entrepreneur Steve McKee was the keynote speaker at a recent Rio Grande Foundation luncheon. He gave an optimistic and detailed talk about the ways in which New Mexico policymakers can turn our state around and even beat Texas in the process. Check out the informative and even inspirational talk below:

In Vino Taxitas

Thu, 2015-06-25 09:50

The invaluable Tax Foundation has released a map that exposes another disturbing policy reality about New Mexico.

The Land of Enchantment imposes a higher wine tax than four of its neighbors: Texas, Oklahoma, Arizona, and Colorado. (Utah, along with four other states, controls alcohol sales within its borders.)

But the full story is a bit more complex. New Mexico’s economic-development bureaucracy touts the “preferential tax rate” the state offers to winemakers. Converting from liters, New Mexico imposes a tax of 38¢ per gallon for its smallest vintners. Mid-range winemakers pay a tax of 76¢ per gallon. The largest enterprises — more than than 2.1 million gallons of crushed grapes produced annually — pay the full tax of $1.70.

The lesson: Vintners in the Land of Enchantment are welcome to be successful — just not too successful.