The article below ran at the newly-relaunched NMPolitics.net which is managed by the indefatigable Heath Haussamen. We are thrilled to have Heath back at the helm of NMPolitics.net. Check out the site for more content provided by the Rio Grande Foundation and other political and policy voices from across the political spectrum.
During the 2015 legislative session various proposals were put forth, ostensibly with the goal of improving New Mexico’s roads. One proposal by Senate Finance Committee Chairman John Arthur-Smith would have increased the State’s gas tax by fully 10 cents per-gallon while tying future increases to inflation.
Smith’s plan, if passed, would have represented a 59 percent increase in New Mexico’s gas tax (from 17 to 27 cents per-gallon). It is one thing to claim that we need to spend more on infrastructure and to raise revenues accordingly. It is another thing entirely to claim, as Smith did in an opinion piece, that spending an “additional $140 million annually for road jobs” will be an economic boon.
Before we hike taxes and spend another $140 million on roads, it is important to ask whether New Mexico needs more money for roads in the first place. That is an open question. Certainly, anyone who drives around New Mexico has their “pet” pothole, bottleneck, or bumpy road that they wish could be addressed, but relative to other states, New Mexico’s roads are pretty good.
According to the Reason Foundation’s (Reason is a free market organization that does a great deal of work on infrastructure issues) latest national analysis, New Mexico’s highway system ranked 7th among the 50 states for performance and cost-effectiveness. Each of our neighbors scored lower. New Mexico’s best marks came in maintenance disbursements per mile (1st), capital-bridge disbursements per mile (6th), and rural arterial pavement condition (6th).
Of course, our roads can always be better, but that doesn’t necessarily require higher taxes. We could use the resources we have more efficiently. The simplest way to make our road budget go further would be to eliminate New Mexico’s “Davis-Bacon” law which artificially raises labor costs on public works projects. The House passed a reduction in those rates during the 2015 session. It should eliminate “prevailing wage” laws entirely and allow construction workers to be paid market wages.
A report done by Ohio’s Legislature found that eliminating a similar provision on school construction in that state led to a 10.7 percent reduction in the total cost of each school. Similar savings would likely be experienced by paying market wages on roads as well. Eliminating New Mexico’s “prevailing wage” would give us 15 percent more road construction and maintenance.
The U.S. Supreme Court is poised to issue its decision in King v. Burwell in June. The ruling could have tremendous consequences for the health care law commonly known as Obamacare – and more importantly, it could have a huge impact right here in New Mexico.
King v. Burwell was argued before the Supreme Court in March. The case hinges on an interpretation of the Obamacare law. The plaintiffs argued that the text authorizes premium subsidies for people in “exchanges established by [a] State.” A separate section describes the creation of a federal exchange by the Secretary of Health and Human Services for states that do not create their own exchanges.
An IRS rule issued in 2012 allowed premium subsidies to be paid through exchanges established by the secretary. The plaintiffs argue these subsidies are illegal, since there is no congressional authorization for the spending. If the justices concur, states that have not created exchanges under the law could see some dramatic changes.
(Albuquerque) In an effort to improve government transparency throughout New Mexico, the Rio Grande Foundation has requested and published payroll data for the 32 largest cities throughout New Mexico.
Some cities including Albuquerque and Rio Rancho post payroll information online. However, these were the laudable exceptions as few city websites have a comprehensive listing of payroll data. Find city data here. A few cities demanded nominal payment for the data and one city, Socorro, was unwilling to provide the data at all.
Said Rio Grande Foundation President Paul Gessing of his organization’s role in releasing the data, “The Internet in its current form is now more than 20 years old; it is time for governments at all levels to leverage this inexpensive tool to make data more readily-available to citizens.”
Under New Mexico law, employee salary data is already public information, available on request from the county or city government. Now, thanks to legislation passed during the 2011 legislative session, this and other data must be made available in a format preferred by the requestor.
Responding to the most likely critique of having this information online, Gessing said, “Having salary information online is not a privacy threat. The Rio Grande Foundation has had similar information posted for cities, counties, and institutions of higher education online for years and we have not heard any specific complaints.”
“We at the Rio Grande Foundation believe strongly that transparency and openness are keys to achieving a more limited, fiscally-responsible government. Information on who is hired to do what and how much they are being paid is information that must be available and accessible to the public” said Gessing.
Socorro (refused to comply)
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):
(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.
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 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.
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.