Gov. Martinez has given her final “State of the State” address (you can read it here). In general, given the partisan divide in Santa Fe with Democrats in control of both houses of the Legislature, it is hard to see much in the way of economic reform happening in the 30 day session, but there were several notable points from the RGF perspective:
According to the Gov. New Mexico now has $330 million in “new money.” That’s up from the previous number of $200 million released just a few weeks ago. That is good news and it largely reflects the rise in both oil prices and oil production (especially in the Permian). With that it seems even harder to justify raising taxes as Gov. Martinez proposed in her budget and several Democrats wish to do.
Even more interesting was her statement with regard to that new revenue that, “Maybe we should give a big chunk of that back to the taxpayers.” That would imply cutting, not raising, taxes. I doubt that is in the cards this session and I’m not sure how an additional $130 million shifts us from a tax hike scenario to a tax cut scenario, but it is good to hear even an oblique reference to tax cuts from Martinez.
Martinez spent much of the rest of her economics discussion touting various successes and policies. Unfortunately her love for corporate welfare programs like LEDA and JTIP remains in full bloom. The Gov. also touted New Mexico’s growth in tourism and urged more spending on it, but there is little evidence that building a state economy on tourism is good thing, nor are taxpayer-financed tourism agencies key to the success of tourism.
Cue some kind words about Facebook, another corporate welfare “success story” and a brief, laudable statement about efforts to reduce reliance on Washington and much of the rest of the speech was about crime. The Gov. does spend a fair amount of time dealing with education issues and rehashing the debates of recent years while also making one last push for needed reforms to teacher licensing.
Several important points, unfortunately the only area for bi-partisan agreement economically seems to be to keep the money flowing to JTIP/LEDA and tourism.