Paul and Dowd have a lively discussion with Dean Stansel. Dean is a research associate professor at the O’Neil Center for Global Markets and Freedom at Southern Methodist University. He is the is primary author of the Economic Freedom of North America 2018.
This annual report provides an economic freedom index for states and provinces in North America. Hear how New Mexico fares in the report compared to our neighboring states, what are the best opportunities for improvement, and what improvement in the index would it mean to New Mexico.
The Albuquerque Public Schools are looking for a 19% property tax increase. At a cost of $1 million a special mail-in election will be held in early February of 2019. Anyone living in the district can vote.
The thing is that it is hard to see how APS needs more of our money. Based on 2016/2017 school year data, APS spends a lot more money than other major school districts in neighboring states. We get the $16,000 plus figure by dividing the $1.34 billion annual budget by the number of students in the district (83,019 according to the most recent budget).
And, while property taxes are dedicated to capital outlay spending, it is worth noting that New Mexico schools as a whole spend much more per student than any other neighboring state. This calculation was made using data available from the National Education Association (yes, the union). This number came about from dividing capital expenditures (p. 58) by average daily attendance (p. 45). APS is by far the largest school district in New Mexico so it is likely that capital outlay expenses at APS track or even exceed those of New Mexico as a whole.
On this week’s show Paul and Dowd briefly discuss the results of the race in Congressional District 2 in which Yvettte Herrell lost after being ahead on election night. Also, Dowd and Paul provide a recap of the Foundation’s event with transportation expert Randal O’Toole.
APS School board is looking to raise property taxes by 19%. New Mexico’s economy finally has as many jobs as it did 10 years and 7 months ago. Oil prices are dropping.
In a further blow to economic diversification Honeywell has left Albuquerque continuing the decline in aerospace employment
Finally, special interests claim that New Mexico government spending has been “slashed” and “cut” under Gov. Martinez. Dowd Muska crunched the numbers and found that not to be the case.
At the Rio Grande Foundation we focus on good public policy reforms and we’ll be doing that again when the new Legislature convenes in January. That said, New Mexico relies heavily on oil production and, in case you haven’t been paying attention, since early October prices are down dramatically from the mid-$70 range to the mid-$50 range.
Michelle Lujan-Grisham has some big spending plans, but will she have the money to carry them out? Markets are volatile and time will tell, but it just shows that creating “permanent” new spending programs based on rapidly-changing prices in a volatile market is not a good idea. It also points to the need for tax reform and other measures to diversify the New Mexico economy.
So, so, so many cuts.
Listen long enough to the big spenders who populate the Land of Enchantment’s political establishment, and you might become convinced that for many years now, Santa Fe has “slashed” spending on “vital public services,” putting New Mexicans’ safety at risk while failing to adequately “invest in our children.” Whether blamed on Susana Martinez (a hardy perennial), the Great Recession, inadequate fedpork, or the state’s rollercoaster-ride on the vicissitudes of the oil market, the message is always the same: We must ratchet up government expenditures, to account for all the austerity New Mexico has been forced to endure over the past decade.
The problem with that narrative is … there’s no evidence to support it.
Earlier this month, Errors of Enchantment took a look at spending on a few of liberals’ favorite programs and subsidies, such as “early childhood education” and Medicaid. But exploring all spending, adjusted for both inflation and population, confirms that Santa Fe’s spending machine has not been throttled back. The chart above depicts all-funds expenditures — everything from roads/highways to colleges and universities, prisons to museums, government “authorities” to interest on debt. The data show that the decade between the 2007 and 2017 fiscal years saw per capita spending expand by 7.9 percent.
And if we had figures for the 2018 and 2019 fiscal years, that 7.9 percent “gain” would likely be significantly larger. The 2017 fiscal year ended on June 30, 2017 — more than 16 months ago. (We won’t have final numbers on fiscal 2018 until the Department of Finance and Administration issues the comprehensive annual financial report for the year — and the bureaucracy’s CAFRs are consistently late.)
So before state legislators and New Mexico’s new chief executive rush to blow that $2 billion, not-likely-to-be-recurring surplus, a dose of fiscal reality might be in order. The harder you look, the harder it is to find the “cuts.”
Errors of Enchantment has repeatedly documented how “all the corporate-welfare schemes implemented to promote aerospace in the Land of Enchantment [are] yielding zilch in results.” But more bad news arrived yesterday, when Honeywell Aerospace “told employees at its 500,000-square-foot plant … that all Albuquerque-based aerospace work would be relocated to … sites in Arizona, Florida and Puerto Rico over the next year.”
No details have yet emerged about how many jobs will be lost, but employees told the Albuquerque Journal that “the workforce totals up to 500, including those working for Bendix King, a subsidiary that does not appear to be affected.”
Whatever the number of layoffs, the corporation’s decision follows a clear trend. As the chart above shows, New Mexico employment in the sector the U.S. Bureau of Labor Statistics calls “Aerospace Product and Parts Manufacturing” has dropped 64 percent in the last decade. Crony capitalism, “investments” in preschool, and subsidies from Washington don’t appear to be getting the job done. Maybe it’s time for a different approach?
RGF president Paul Gessing attended the APS board meeting at which the tax hike was placed on the ballot (and spoke against the tax hike). This would be a 19% tax hike in APS’ share of property taxes.
Gessing spoke to KOB TV Channel 4 and that interview is below:
Gessing was also quoted in the Albuquerque Journal piece as well. An illustration of the financial implications of the APS tax increase which will result in a mail-in election this February.
A Democratic Party blue wave swept through New Mexico’s 2018 elections. Paul, Dowd and Wally analyze what happened and what it may mean for New Mexico public policy in coming years. The “election analysis team” also takes a look at how their election predictions fared in the bright light of the actual results.