Texas continues to outpace the nation in jobs and economic growth. New Mexico, on the other hand, lags dramatically behind the region and the nation.
Rather than focusing on New Mexico's woes, this week on the "New Mexico Freedom Hour" presented by the Rio Grande Foundation which airs next on Saturday, August 30, 2014 from 12pm to 1pm on 770 KKOB AM, we'll focus on understanding what Texas does so well when it comes to economic development and job growth. Of course, we'll also plug our guest for ideas on what New Mexico could do to compete with the Lone Star State.
Host Paul Gessing will interview Chuck DeVore, Vice President of Policy with the Texas Public Policy Foundation. DeVore is author of "The Texas Model: Prosperity in the Lone Star State and Lessons for America."
Listeners are encouraged not only to tune in and listen, but to call in with questions: 505-243-3333.
I recently sat down with Wally Drangmeister of the New Mexico Oil and Gas Association to discuss New Mexico's economy and how it depends on the oil and gas industry as well as potential ways to use the industry as a bridge to a more prosperous economy. The show originally aired on the Energy New Mexico Hour which airs on Sunday mornings from 10 to 11am. Take a listen here.
It's official. Tesla has broken ground at its new "gigafactory" near Reno, Nevada. While New Mexico appears to have missed out on Tesla and its expected 6,500 jobs, some legislators, when asked, seem willing to spend as much as 500 million tax dollars to lure the company to the state.
While details are by no means firm, it appears that Tesla is looking for an infusion of $500 million, not tax breaks of $500 million. The difference between the two is that tax breaks don't actually "cost" the state/taxpayers anything because Tesla would have to locate in New Mexico for any tax revenue to result from its activities. When it comes to outright spending of New Mexicans' tax dollars, those are dollars that come directly out of the pockets of average New Mexicans and the businesses already located here.
This important nuance explains why we at Rio Grande Foundation oppose payments made to the film industry which, according to a new legislative report, paid out $251 million in incentives to the film industry with $103.6 million in state and local tax dollars generated over the same basic time period. In simple mathematical terms, the state spent $147 million more than it generated from the film industry in recent years. That's called a "loss" in any other industry. Jobs were created, but the net loss really illustrates the inherent problems with the program.
The same reasoning explains why fiscal conservatives should not support outright spending of $500 million to bring in Tesla. Tax breaks are one thing, but if the company goes under, there are no "clawbacks" that will get $500 million in outright spending back.
(Albuquerque, NM) — New Mexico’s only free market think tank, the Rio Grande Foundation, is hosting an hour-long radio show on 770 KKOB starting this Saturday, August 16, from noon to 1pm. The show will air every two weeks through at least the end of 2014. The show, entitled “New Mexico Freedom Hour” will focus on economic and education issues here in New Mexico with an eye towards real solutions that have been tried in other states. The format will involve interviews of guests from across the political spectrum and phone calls from the public. The call-in number is: 505-243-3333. Said Rio Grande Foundation president and primary host, Paul Gessing, “This show offers the listeners a unique forum in which to learn about and discuss the ways in which free markets and limited government can help everyday New Mexicans lead better lives. Show topics will include labor freedom, taxation, education reform, and an economic history of New Mexico to name just a few.
(Albuquerque, NM) – The Rio Grande Foundation is one of 77 organizations in 44 states celebrating “National Employee Freedom Week” which lasts from August 10-16. The week marks an occasion to educate workers on their freedom to join or not join a labor union.
There is no more basic freedom enshrined in the United States Constitution than that of free association. That includes the choice not to be forced to join or pay dues to a union as a precondition of employment. This right is protected under “Right to Work” legislation which has been adopted by 24 states, not including New Mexico.
According to a poll of 500-502 respondents conducted by Google Consumer Surveys, approximately 84.7 percent of New Mexicans answered “Yes” to the question: “Should employees have the right to decide, without force or penalty, whether to join or leave a labor union?”
Said Rio Grande Foundation president Paul Gessing, “These poll results illustrate strong support for the basic tenets of a “Right to Work law in New Mexico. No matter how the legislative races pan out in November, there can be no doubt that an overwhelming majority of New Mexicans support the basic principles of “Right to Work.”
Concluded Gessing, “Where implemented, “Right to Work” laws not only protect basic fairness, but they have a proven track record of spurring economic growth and increased employment when adopted. With New Mexico’s economy struggling profoundly, both parties in Santa Fe must consider ‘Right to Work’ as a core component of plans to reform the economy.”
Recently, site-selection expert John Boyd was interviewed about New Mexico’s chances for getting the Tesla “gigafactory.” His comments were very enlightening. He said that manufacturing companies seek reasons to eliminate states when considering where to build major facilities, and the lack of a right to work law is at the top of the list. In the interview, Boyd again reiterated the need for right to work stating, “I can’t underscore how critical right to work status is.”
Unfortunately, despite polling data (recently released by Rio Grande Foundation) showing that nearly 85 percent of New Mexicans support such laws, they are controversial. In reality, such laws merely prohibit unions and employers teaming up to force new employees to join a union as a condition of employment.
While most people see voluntary association as an American birthright, many unions see it as a dire threat to their funding and political power. So they kill it every year in its first committee in Santa Fe.
Equally problematic is the “go-along” attitude of so many of New Mexico’s business leaders. With 6,000 Tesla jobs hanging in the balance, the need for our legislature to pass a right-to-work law should have been a centerpiece of the recent “Reinventing Our City” conference on Albuquerque’s economy, but it was hardly mentioned by the business and community leaders who spoke at the meeting. To be fair, Mayor Berry has repeatedly noted the importance of right to work in other venues.
Any serious discussion of how to turn around New Mexico’s economy must focus on big, difficult issues like right to work, serious tax reform and a dramatic rethinking of the way in which we educate our children and prepare them for the competitive 21 st century workforce.
The following article appeared in the Las Cruces Sun-News on July 20, 2014. Although legislation has passed the House (and will likely pass the Senate soon) to temporarily prop up the highway program and avoid an immediate crisis, the need for fundamental change in how America builds and maintains its infrastructure remains.
The next manufactured crisis coming from Washington, DC involves the federal highway program. According to news reports, the Federal Highway Trust Fund is on the cusp of insolvency, with a cash shortage looming before the end of July. Despite the deadline, lawmakers are at an impasse over how to replenish an account that funds the nation’s highway projects.
U.S. Transportation Secretary Anthony Foxx is warning states would, on average, see a 28 percent reduction in federal dollars to cover the costs of current needs if additional funding is not found. One potential source of funding is a hike in the federal gas tax.
In its current form, the federal highway program is financed through an 18.4 cent-per-gallon tax on gasoline and a 24.4 cent tax on diesel fuel. Unfortunately, while the gas tax more closely resembles a user fee than other taxes charged by Washington, it isn’t. If it were a user-fee, gas taxes would finance roads, bridges and other items that benefit motorists who pay the tax. Instead, over the past decade, Congress has diverted well over $55 billion of gas taxes to non-highway projects, most notably mass transit.
Whether you want more mass transit or less, the fact is that transit riders don’t pay the gas tax, rather motorists subsidize these systems nationwide. Ideally, Congress would create transportation policy under the principal of “user pays.”
Carl Graham recently sat down and talked with Fred Martino of KRWG TV in Las Cruces. The video of Graham's interview can be seen below. Feel free to fast-forward through the valentine to heavily-subsidized so-called "renewable" industry to the 5:25 mark when Graham's interview starts. After Graham's interview, there is an interesting (albeit one-sided) discussion of the land the State of New Mexico could receive due to the Organ Mountains Monument land grab.