Economy

RGF's Gessing weighs in on de la Cruz Cannes "Economic Development" trip: Eye on New Mexico

On this week's "Eye on New Mexico" on Channel 4, KKOB, Chris Ramirez talked to Commissioner de la Cruz and Marcos Gonzales of the Bernalillo County Economic Development Department about economic development and the Commissioner's trip to France. My interview starts at the 4 minute mark and de la Cruz defends the $20K spent on the trip after that.

So far, the Commissioner admits that no specific projects have resulted from the trip. I'm sure we'll be notified if that changes.

Putting oil/gas off-limits bad move for wrong reasons

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Given the challenges facing New Mexico’s economy — and with the price of gasoline on the rebound — we at the Rio Grande Foundation expressed our view that the citizens and political leadership in Sandoval County should have given SandRidge Energy a fair hearing over their desire to drill an exploratory well in the county. Unfortunately, that did not happen and SandRidge left.

Now, out-of-state environmental groups including Food and Water Watch, the Sierra Club, and Environment New Mexico are pushing a complete moratorium (five years in duration) on oil and gas drilling within Sandoval County. These groups are philosophically opposed to the traditional sources of energy that fund one-third of New Mexico’s budget. There are no unusual issues with drilling for oil and gas in this part of Sandoval County, rather there is a political opportunity to capitalize on fear of the unknown to advance their anti-energy agenda.

It is time for the citizens of Sandoval County to push back against any such ban and support jobs and economic opportunities for their friends and neighbors.

The oil and gas industries in Sandoval County alone generated $25.8 million (according to 2013 data from the New Mexico Tax Research Institute). That’s the production value alone, not including the so-called “multipliers” and other follow-on impacts.

The anti-frackers nearly hyperventilate in opposing the use of “hydraulic fracturing” in order to access new sources of oil and gas, but must rely on fear and ignorance to generate public opposition.

State has many opportunities to reduce spending

Journal columnist Winthrop Quigley seems to believe that what New Mexico’s struggling economy needs right now is higher taxes. We at the Rio Grande Foundation couldn’t disagree more and believe raising taxes would have further deleterious effects on our economy.

Disagreements aside, we do share agreement with Quigley that New Mexico’s tax structure must be reformed. The gross receipts tax is uniquely harmful to the growth and development of small businesses. It also encourages businesses to lobby the Legislature to lobby for exemptions or outright subsidies before locating here. The Legislature must act to reform this harmful tax structure.

It is a myth that New Mexico is a low-tax state. According to the Federation of Tax Administrators, our tax burden as a percent of personal income is ninth-heaviest in the nation. This is far heavier than the tax burdens of our more economically successful neighbors : Arizona ranks 39, Colorado 45, Oklahoma 37, Texas 44 and Utah 31.

Now for the (substantial) disagreements.

Rio Grande Foundation Launches NEW Radio Show “Tipping Point New Mexico” This Saturday, April 9 from noon to 3pm

The Rio Grande Foundation is launching a new radio show on a new home, “The Rock of Talk” 95.9FM and 1600AM. The show called “Tipping Point New Mexico” will air Saturdays weekly from noon to 3pm.

Hosts will rotate but will include RGF's Paul Gessing, Dowd Muska, and Burly Cain.

Issues addressed on the show will include New Mexico's economy and the importance of 2016 in turning our state around. If you want to participate in the discussion, you can call in at: 505-550-5500.

This week we'll talk about Albuquerque Rapid Transit, the push by some to raise taxes in New Mexico, and more.

 

 

 

A Dubious Bet on College and Economic Development

This op-ed ran in The Santa Fe New Mexican on March 20th.

This year marks the 20th anniversary of New Mexico's Legislative Lottery Scholarship Program.

Unfortunately, there isn't much to celebrate.

A well-intentioned attempt to boost access to higher learning in the Land of Enchantment, the program was crafted by a Democratic legislature and Republican governor. But it suffers from a serious, if seldom-discussed, flaw.

Lottery scholarships certainly don’t have a popularity problem. A report by the New Mexico Higher Education Department found that between 2000 and 2014, the number of program recipients doubled. Expenditures, of course, ballooned as well, rising to $66.8 million in the 2014 fiscal year.

By law, the New Mexico Lottery Authority is required to set aside 30 percent of monthly gross revenue for scholarships. But solvency has been an issue for years -- in 2014, gamblers supplied just 61 percent of the program's funding. A slumping economy and a decline in "scratcher" sales sent legislators and the authority scrambling for cost savings and new monies. Eligibility was tightened, and the number of semesters covered for a four-year degree fell from eight to seven. Tobacco-settlement revenue has been transferred to the tuition fund, and special appropriations have been made. In 2014, legislators began to divert a portion of the revenue stream from New Mexico’s excise tax on liquor. In the just-completed session, lawmakers required the lottery authority to devote unclaimed-prize cash to scholarships. (Governor Martinez vetoed the bill.)

Robert Zubrin's Presentation "Merchants of Despair"

Author and scientist Robert Zubrin discusses his book "Merchants of Despair" which connects the modern environmental movement all the way back to the eugenics movement of the early 20th Century. His presentation is available below and his slides are here.

Grow economy, don’t mandate sick leave

The aftermath of the 2016 Legislative session is still being discussed and parsed, but the liberal New Mexico Voices for Children think tank is already clamoring for the next expansion of New Mexico government. The issue this time is paid sick leave. Naturally Voices, which views every societal “nail” in need of a government “hammer,” has a government-driven solution.

New Mexico private sector workers are, according to a new report, offered sick leave at a lower rate than similar workers in any other state. To be honest, we at the Rio Grande Foundation share the concerns expressed by Voices on this. We’d like to see more workers paid better and offered employee benefits.

The difference lies in our proposed solutions to the problem.

We view the issue through the lens of recent news reports that an astonishing 10,000 people applied for 290 job openings at the new Cheesecake Factory in Albuquerque. Obviously, there is an over-supply of relatively low-skilled labor in both Albuquerque and New Mexico as a whole. This is a market reality driven by New Mexico’s historical over-reliance on federal dollars and extractive industries.

SandRidge Decision Another Blow to Economic Development in New Mexico

If you haven't already heard, SandRidge Energy which had applied for a permit to drill in Sandoval County, has pulled its application. Certainly, low oil and gas prices may be an issue, but so was strident and vocal opposition.

As I wrote in an opinion piece published awhile back in the Rio Rancho Observer, "it’s not like New Mexico can afford to simply kick investors out. We have the nation’s highest unemployment rate. The state budget is flat due largely to the decline in oil and gas prices. And, in recent years, despite the self-evident beauty of our state and its great weather, New Mexico has seen more people — especially young ones — leaving than are coming in."

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Recently, investors looking to do business in New Mexico, bringing jobs and economic development to our state, received a harsh lesson in NIMBY (Not in my backyard) politics.

Unfortunately, while we’ve come to expect anti-oil and gas hysteria in places like Mora and Santa Fe counties, relatively conservative Rio Rancho and Sandoval County are apparently not immune.

I’m referring, of course, to SandRidge Energy’s plans to drill an exploratory well in the county on privately-owned land west of Rio Rancho. The NIMBY crowd was out in full-force with one man saying he “only” lives eight miles from the proposed site and that it was simply too close.

Yes, oil prices are down right now. And, SandRidge Energy will probably give the mob what it wants and walk away from the project.

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