Kevin Robinson-Avila, in today’s Albuquerque Journal, had a good overview of the state’s two permanent funds. As usual, they’re under siege by liberals who seek to siphon more revenue for “public investments.”
The two funds are mighty tempting targets. Together, they are worth nearly $20 billion — more than state government spends in an entire year.
But as the left dreams of using New Mexico’s “sovereign wealth” on another round of doomed-to-fail programs, attention may turn to another fund. The state’s budget reserve, according to the governor’s spending plan for the 2017 fiscal year, is $505 million, or 8.1 percent of “recurring appropriations.” As Medicaid costs balloon and the oil-and-gas industry continues to suffer, look for that share to dwindle, even though the Legislative Finance Committee prefers that the rainy-day kitty be kept at 10 percent.
With “new money” predicted to be just $30 million in the 2017 fiscal year, look for pols to start eyeing the budget reserve. A half-billion dollars can make a big contribution toward successful denial of fiscal realities.
The Journal’s Winthrop Quigley had an interesting column over the weekend in which he detailed how New Mexico’s history of colonization and violence make it “anti-business.” While we’ve had our disagreements with Quigley, he hits on a number of truths in his article. Nonetheless, I want to weigh in with my own thoughts here:
1) It is interesting to me that Quigley almost constantly uses “right to work” to as an entree to discussing what he believes doesn’t work in terms of economic reforms. He’d never launch into a fatalistic discussion of New Mexico’s long and challenging history by denigrating the potential of early childhood programs or Medicaid expansion. He also fails to address more than a dozen other reforms that the Republican-controlled House has passed in recent years only to be killed without so much as a vote in the Senate. He just dismisses “right to work” as “not a solution” and moves on.
2) Quigley notes the lack of trust for outsiders in New Mexico. Interestingly, free market capitalism, despite its “dog-eat-dog” reputation, requires a great deal of trust. That trust usually results in benefits for all parties involved in a free exchange, but trust is nonetheless required. Trust is indeed lacking in New Mexico due in part to its history of colonialism and political corruption.
3) Cultures change. A recent report noted that New Mexico’s corruption has been enabled by the federal government. The loss of federal spending and now, significant oil and gas revenues, mean that change is imperative. The old ways never worked particularly well. Now, they are being exposed as a total failure. It is time for New Mexicans to embrace free markets and build the trust necessary to create a robust private sector.
The story is split in two with Gessing’s story starting at approximately the 2:40 mark: