Economy

Low teacher pay in New Mexico and the growing K-12 bureaucracy

A recent report by New Mexico's Legislative Finance Committee has found that teacher pay in our state is too low to keep good teachers. Interestingly, according to the NEA, New Mexico's per-pupil spending on education is about average (25th according to the chart on p.54), but our teacher salaries are ranked 43rd in the nation (page 18).

What gives? For starters, New Mexico is known for having high capital spending when it comes to our public schools (7th-highest in the nation according to the chart on p. 58). Also, as data compiled by the Friedman Foundation and presented below by the Rio Grande Foundation shows, bureaucracy and administrative staffing levels have grown dramatically in recent years:


Sen. John Arthur-Smith does make a good point in the original Albuquerque Journal article about how teacher pensions may be unsustainable (teacher pay is essentially back-loaded to retirement). This means seniority is valued over competence as young people are scared away from a 20+ year commitment in order to get their "return on investment." Perhaps Smith would introduce legislation to transfer teachers (on a voluntary or mandatory basis) from defined benefit pensions to defined contribution 401K-style programs?

As seen in the map below from NCSL, this is an option that is in place in several other states (and is becoming increasingly-popular):

RGF Policy Brief: What King v. Burwell Could Mean for New Mexicans

(Albuquerque, NM) – The health care law known as ObamaCare remains controversial, not just among the population at large, but among legal experts and in the courts. The latest decision relating to the health care law popularly known as “ObamaCare” was heard by the US Supreme Court in March of this year. The decision could impact the flow of hundreds of billions of dollars in Obamacare subsidies as well as taxes and mandates under the law.

A new report from the Rio Grande Foundation, “New Mexico and King v. Burwell What Kind of Exchange Are We? What does that Mean for Citizens and Policymakers” finds that New Mexico’s “hybrid” exchange would likely be impacted by a US Supreme Court finding for the plaintiffs in a decision that is expected to be handed down this summer.

To date, Amy Dowd, the director of the New Mexico Health Insurance Exchange, has claimed that “the case isn’t likely to have a bearing on New Mexico because the court is looking at the federal, as opposed to state, exchanges. But, in discussions with health care experts and research on the law, Paul Gessing, president of the Rio Grande Foundation found information to the contrary.

NM should avoid higher gasoline tax

Some New Mexicans have convinced themselves that the challenges facing the state's highways require a higher gasoline tax. They're wrong, and here's why.

First, the true condition of New Mexico's roads contrasts with the oft-heard claims that they are "crumbling" and "in disrepair." In the Reason Foundation’s latest national analysis, the overall performance and cost-effectiveness of New Mexico’s highways ranked seventh. States graded worse included our neighbors Texas (11th), Arizona (19th), Oklahoma (22nd), Utah (29th), and Colorado (33rd).

New Mexico scored its best marks in maintenance disbursements per mile (1st), capital-bridge disbursements per mile (6th) and rural arterial pavement condition (6th).

Still there's no denying that the revenue needed to build and maintain highways is stagnant. Autos are becoming more efficient, and Millennials do not drive as much as previous generations. Between the 2009 and 2014 fiscal years, New Mexico's road fund rose from $371.1 million to $380.6 million. Adjusted for inflation, the increase became a small decline.

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

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.

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

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.

New Mexico Senate leader Sanchez happy with status quo

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.

Why infrastructure borrowing won't fix a weak economy

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.

James Taylor presentation: Affordable Energy Threatened in New Mexico

On April 8, 2015, James Taylor of the Heartland Institute visited Albuquerque to discuss policies that are negatively impacting New Mexicans' access to affordable, reliable energy (especially electricity). You can watch his full presentation below and access his powerpoint slides here:

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