New Mexico
New Report Shows How To Boost New Mexico’s Economy
Backpacker at the top of Sandia Peak in New Mexico. USA.
New Mexico is not known as an economic powerhouse. Despite being one of the sunniest states in the country, its population has hardly grown over the last decade. Meanwhile, the populations of its biggest neighbors—Arizona, Texas, and Colorado—have grown rapidly. Economic growth in the region follows a similar pattern, with New Mexico’s growth trailing its neighbors. In a new report, author’s Matthew Mitchell and Paul Gessing link New Mexico’s weak economy to its lack of economic freedom.
New Mexico is the fourth sunniest state in the country. It has cooler summers than Phoenix and warmer winters than Denver. Research shows that people are attracted to places with nice weather, yet New Mexico’s population only grew by 1% from 2013 to 2022. Meanwhile, Arizona’s grew by 12%, Colorado’s by 11%, and Texas’s by 14%. Employment growth, real GDP growth, and income growth all follow the same pattern (see figure below), with New Mexico trailing its neighbors over this period.
Income growth in the Southwest
New Mexico’s favorable weather should be a plus, yet there is something holding the state back. In their new report, Mitchell and Gessing make a convincing case that a lack of economic freedom is keeping New Mexico from experiencing the same success as its neighbors.
Economic freedom is the degree to which individuals are allowed to make their own economic choices. Choices about where to work and on what terms, and how to invest their time and money. Places that allow more economic decisions to made by individuals have more economic freedom.
Dozens of studies show that places with more economic freedom, whether it be countries, states, or cities, tend to have better economic outcomes, including more job growth, higher incomes, less poverty, and more business creation. New Hampshire is the freest state according to the latest edition of the Fraser Institute’s Economic Freedom of North America index, while New Mexico ranks 47th, well behind Arizona (32), Colorado (14), and Texas (5).
Even worse, New Mexico is the only state where economic freedom declined over the last 40 years. Yes, you read that right—in every state but New Mexico, economic freedom increased from 1981 to 2022 (the latest available data).
New Mexico’s lack of economic freedom is contributing to its poor economic performance. As the report notes, if New Mexico increased economic freedom by 10% to a level like that of Maine (which is not that free at 38th overall) its per capita GDP could increase by as much as 5%, or about $10,000 for a family of four. This is a non-trivial increase in output that requires relatively modest policy changes.
A state’s overall economic freedom score is composed of scores from three areas—government spending, taxation, and labor market regulation. New Mexico ranks 49th in government spending, 36th in taxation, and 49th in labor market regulation. Each of these scores is the lowest in the Southwest, as shown in the figure below.
Economic Freedom scores in the Southwest
One of the first things New Mexico should do to increase economic freedom is lower its taxes. It has the highest top marginal income tax rate in the region at 5.9%, more than double Arizona’s 2.5% flat rate. Texas has no personal income tax. It also has the region’s highest corporate income tax rate, also at 5.9%. Worse, its corporate income tax is not indexed to inflation. This means more and more companies will pay the higher rate as inflation pushes their income over the minimum threshold, despite their profits not being higher when inflation is accounted for.
New Mexico policymakers should lower their top personal and corporate income tax rates to make them more competitive with their neighbors. A lower, flat rate like Arizona’s 2.5% rate would incentivize work and investment. New Mexico can also afford a lower rate since the state’s oil and gas industry is bringing in billions of dollars in tax revenue each year. The report notes that New Mexico has had a run of $3.5 billion surpluses in recent years.
Policymakers in New Mexico should also make it easier for people to work. Mitchell and Gessing point out that New Mexico has some of the most onerous occupational licensing regulations in the country. The state places a particularly large burden on occupations that often serve as an entry into the labor market. For example, HVAC contractors and sheet metal workers are required to spend four years in training before they can obtain a license. Drywall installers must train for three years before they can get a license. Barriers like these make it difficult for younger and less experienced workers to earn a living and support a family. Reducing these and other unnecessary licensing regulations would improve New Mexico’s economic freedom score and increase opportunity for the state’s residents.
New Mexico’s economy is lagging its neighbors and has for years, but it does not have to be this way. New Mexico policymakers can improve the state’s economy by lowering tax rates and reducing barriers to work. Such changes would increase economic freedom in New Mexico, and increasing economic freedom is a proven path to prosperity.
SANTA FE, N.M. (KFOX14/CBS4) – The New Mexico Department of Health says it will continue to recommend the full schedule of childhood vaccines.
State officials announced the move Tuesday, directly defying a new federal policy that scaled back routine immunization guidance.
The announcement comes after U.S. Health and Human Services (HHS), under Secretary Robert F. Kennedy Jr., reduced the number of vaccines it recommends for all children.
The New Mexico Department of Health stated the federal changes were “not based on new scientific evidence or safety data.”
“New Mexico will not follow the federal government in walking away from decades of proven public health practice,” said Governor Michelle Lujan Grisham. “Our recommendations remain unchanged.”
State health officials sought to reassure parents, emphasizing that vaccines remain widely available and covered by insurance.
“We know this is confusing for parents, but the science is clear: vaccines are safe, effective, and save children’s lives,” said Dr. Miranda Durham, chief medical officer for NMDOH.
All childhood vaccinations will continue to be covered under programs like Medicaid and the federal Vaccines for Children Program.
The state encourages parents to consult their healthcare providers using the American Academy of Pediatrics’ immunization schedule.
RECOMMENDED: CDC cuts childhood vaccine list, sparking healthcare professionals’ concerns
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SANTA FE, N.M. — Former New Mexico Public Regulation Commissioner Jim Ellison is running for governor as a Republican, he announced on social media Tuesday.
Ellison is running on affordability, opportunity and trust in government as the key points of his campaign. His experience includes serving on the NMPRC in 2023 and 2024.
“New Mexico deserves leadership that listens, acts, and delivers results. Our state has enormous potential, but too often that potential is held back by policies that don’t serve everyday New Mexicans,” he said on his website. “I’m running to bring practical solutions, honest accountability, and a renewed focus on the public interest.”
A Georgia native, Ellison has lived in New Mexico for 20 years and currently lives in the Albuquerque area with his wife and two children.
Ellison is aiming to get 5,000 signatures by Feb. 2, to appear on the primary ballot with at least three other Republicans who have announced their candidacy.
Ultra Health CEO Duke Rodriguez announced his campaign in December and recently confirmed to KOB 4 that he received enough signatures to appear on the primary ballot. Rio Rancho Mayor Gregg Hull and New Mexico State Sen. Steve Lanier are also running.
Three Democrats are running – Bernalillo County District Attorney Sam Bregman, Former Interior Secretary Deb Haaland and Former Las Cruces Mayor Ken Miyagishima.
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