Apples-to-Apples, New Mexico’s Government Employees Already Make More: Gov. Martinez Should Consider Vetoing Wage Hike

(Albuquerque) Prior to the 2014 legislative session, the Legislative Finance Committee called for 1.5 percent pay hikes for all New Mexico government employees. Gov. Martinez proposed more modest pay increases. Rather than seeing pay increases for all state employees, Martinez planned to boost pay for about one-third of public workers. New teachers would have received higher pay.

In a “compromise” plan the likes of which are only found in government, the Legislature-passed- budget includes 3 percent cost-of-living salary increases for state agency workers and teachers.

Judges, district attorneys, state police and motor-transportation officers would receive 8 percent raises while prison guards, juvenile-justice officers, social workers handling child abuse cases and educational assistants in schools would get 6 percent pay increases.

In other words, the Legislature took its own proposed pay hikes and doubled them…or more.

Ironically, these proposed pay hikes come at a time of conflicting evidence over whether New Mexico’s government workers are overpaid or underpaid.

According to a recent report from New Mexico’s Personnel Office, “New Mexico’s average pay for 115 of 151 (government) job classifications trailed the average pay of the nearby states. Some workers’ average pay trailed the average pay in neighboring states by more than 20 percent including plumbers, biologists, engine mechanics, and chemists.”

The Rio Grande Foundation, on the other hand, analyzed data from the federal Bureau of Labor Statistics and Department of Labor to determine the earnings and compensation differences among employees of similar characteristics, skill sets, and occupations within the public and private sectors.

Using a mathematical tool called regression analysis to isolate relevant factors relating to employee pay including education levels, time of services, and more, the Foundation produced a careful analysis of data on both total compensation and benefits. The study finds that with benefits included, public workers in New Mexico make over 8 percent more in total compensation than a similar worker in the private sector.

Said Rio Grande Foundation president Paul Gessing of the differing approaches to government employee pay, “Gov. Martinez would be entirely justified in vetoing these pay hikes which went far beyond her original budget proposal and which unnecessarily increase the compensation disparity between government and private sector workers in New Mexico.”

Incredible 31 percent of NM budget derived from oil and gas

Thanks to the show Breaking Bad, many Americans now realize that they don’t need passports to visit New Mexico. We surely appreciate the publicity. But New Mexicans have reason to be even more grateful to another industry.

The New Mexico Tax Research Institute (NMTRI) recently released a study entitled Fiscal Impacts of Oil and Natural Gas Production in New Mexico. It’s impressively researched, including detailed county-level analyses. The results show that absent the tremendous financial impact of the oil and gas industries, New Mexico would be a far different, poorer state.

NMTRI found that 31.5% of the state’s General Fund revenues—the primary source of funding for state public schools and higher education—come from taxes paid by the oil and natural gas industries. The General Fund also pays for state public welfare programs, environmental protection, tourism advertising and support, road construction and maintenance, and many other functions of state government.

Growth best cure for Income Inequality

Income inequality is a popular discussion topic these days. President Obama made it a central talking point in his recent State of the Union address and policy initiatives – most notably minimum wage hikes – have been proposed as means of reducing such inequality. Unfortunately, while inequality has unquestionably grown in recent years, there are few proven solutions and a lot of heated rhetoric.

It is worth noting that growing inequality is not unique to the United States. According to The Economist, inequality around the world has been growing since the mid-1980s in all areas except impoverished sub-Saharan Africa and the former Soviet Union. In other words, to an extent, inequality is a sign of economic development and strength. There is truth to Franklin Roosevelt’s observation that “Capitalism is unequally divided riches while socialism is equally divided poverty.”

In other words, people are not equal. Their skills and work ethics differ greatly. In a free society, we will all be more prosperous overall, but some will be much more prosperous than others.

Legislative update interview: latest from the 2014 session

I sat down with Margaret Ortiz at TBN for a discussion of the issues moving through the 2014 legislative session. Things are happening fast at this point at the Roundhouse, but this interview remains relevant as it touches on the big, controversial issues facing legislators:

Issues and Legislation Facing the 2014 Legislation from Paul Gessing on Vimeo.

KRQE story based on RGF research: Generous perks at NM community colleges

The Rio Grande Foundation released a report in December of 2013 detailing the benefits given to presidents at New Mexico's community colleges. This report caught the attention of Katie Kim at Channel 13, KRQE who put together a major investigative report on the issue. Kim's report aired last night and can be viewed below:

Time to update NM broadband regulations to encourage competition

Other than Marty McFly’s time-traveling DeLorean, 1985 is the distant past in terms of technology. Yet some of New Mexico’s phone carriers are still regulated under a law passed that year – before the World Wide Web was created and before wireless broadband connectivity became the norm for our multitude of digital devices. Carriers are governed under different sets of rules, leading to an overly-complicated regulatory mix that hampers competition among carriers and discourages private investment in the state’s telecommunications infrastructure.

SB 152, which has been introduced in the 2014 Legislative Session seeks to harmonize the regulatory scheme, holding all carriers to the same standards. It enjoys bipartisan support from Governor Martinez (R) and Democrats such as bill sponsor Sen. Phil Griego and House Business and Industry Chair Rep. Debbie Rodella. The bill would hold all incumbent phone carriers to the same standards and apply the benefits of a 1999 rural incumbent telephone law evenly throughout the state.

New Mexico's telecom regs need to be modernized

Antiquated telecommunication regulations are holding New Mexico back. According to the 2013 Mercatus Center report "Freedom in the 50 States," New Mexico suffers under some of the heaviest regulatory burdens of any state. The Rio Grande Foundation has spent a great deal of time researching and exposing many of these burdensome regulations, which can undoubtedly improve the economic climate in New Mexico at no cost to the taxpayer.

New Mexico's broadband regulations are a classic case of overregulation that should be addressed for the good of our rural economy. Greater competition inevitably leads to lower prices and greater choice for consumers. Antiquated land line phone service providers remain regulated by a 1985 law that dates before implementation of the internet and smart-phone technology. This outdated regulatory scheme has hindered investment in rural broadband resources throughout our state. Having high-speed Internet access throughout the isolated communities of New Mexico will remain integral, if not a necessity, to spurring the rural economic growth everyone desires, while simultaneously increasing statewide effective educational opportunities.

During the current legislative session, a bi-partisan bill has been introduced that will modernize and improve these regulations in a positive and productive manner to encourage greater private sector broadband investments. A 30-day legislative session is brief, but this modest regulatory improvement of New Mexico's stale broadband regulations can be one commonsense reform that both Republicans and Democrats can agree on.

I urge all New Mexicans to support SB 152.

Tom Mullins
Board Member, Rio Grande Foundation
Candidate foro US Congress, 3rd District

New Mexico’s Unionized Public Employees Earn More than non-union Counterparts

(Albuquerque) As the Legislature discusses the budget during the 2014 legislative session, pay hikes for State and local government workers are on the table. The Legislative Finance Committee has proposed relatively ambitious pay raises ranging from 1.5 percent to more than 3.0 percent. Gov. Martinez, on the other hand, has proposed more modest pay hikes targeted at teachers. Martinez’s plan would result in small raises for about 7,000 of the state’s roughly 22,000 workers.

With these competing proposals on the table, it is worth looking at the data to better understand the compensation premium that’s already enjoyed by government workers in New Mexico. New research conducted for the Rio Grande Foundation, documented in “New Mexico’s Unionized Employees earn more than their non-union Counterparts” demonstrates the source of that premium: In unionized sectors of New Mexico government, employee pay is higher than it is for government workers who aren’t union employees. In other words, taxpayers pay more than they have to for basic public services.

Economists from the University of Miami (OH) and Trinity University conducted a study of 819 public employees in the state, and found that collective bargaining in the state leads to less-affordable services for the taxpayers and artificially-inflated pay for unionized government employees.

Noted Rio Grande Foundation President Paul Gessing, “Around the state, government employees who are working under a union-negotiated collective bargaining contract cost taxpayers 7.4% more in total compensation – the “union premium” – for services the taxpayers could be getting more affordably from a non-unionized counterpart.”

When discussing across-the-board pay raises for public sector workers, it is important that policymakers and the Legislature have a full understanding of public employee pay and benefits relative to their private sector counterparts.

Concluded Gessing, “New Mexico desperately needs to improve the health of its private sector. While a growing private sector economy can support a growing and better-compensated public sector, this is not currently the case in New Mexico.  

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