Can we afford President Bill Richardson?: A View from New Mexico

Bill Richardson wants to be President of the United States. If you’re thinking about voting for him, consider what kind of governor he’s been.

Richardson touts his experience. He’s been a U.S. Representative, Ambassador to the UN, Bill Clinton’s Energy Secretary, and now Governor of New Mexico. No argument with that.

He also touts his fiscal responsibility and free market nature: “As Governor, I have to balance budgets. I’ve balanced five.” He also calls himself “a market Democrat.” Big argument there.

As governor, Richardson did cut the top income tax rate from 8.2% to 4.9% over five years. He also halved capital gains taxes. However, Richardson increased other taxes and fees, including motor-vehicle registrations, hunting and fishing licenses, cigarette taxes, truck fees and tire-recycling fees. His tax cuts simply offset those increases.

The tax cuts did help improve the state’s poor economy: during his term, the state’s personal income levels rose from #47 in the nation to #45. However, spending rose by nearly 11% between FY 07 and FY 08 – and by a 7% average prior to that. Only New Mexico’s revenue flow from mining, oil and gas industries helped compensate for Governor Richardson’s out-of-control spending.

Now that flow is threatened, as he is doing everything possible to slaughter the cash cows that balanced his budgets. Governor Richardson backed a federal law that kicked oil and gas development out of the state’s energy-rich Valle Vidal – but not out of Ted Turner’s ranch next door, with its 500 working oil wells. Down went future tax revenues.

He also signed a state bill ceding control over energy operations on government lands to ranchers who don’t even own the lands, but just have grazing permits. This imposed hefty cost increases on oil and gas companies, and will send tax revenues further downward.

Richardson imposed stringent state renewable energy mandates. He supports pushing automobile mileage standards to 50 mpg and requiring utility companies to derive 30% of their electricity from renewable sources, supposedly to protect the environment, reduce imports and prevent global warming.

However, coupled with his anti-drilling campaign, the mileage rules would mean every gallon saved is offset by a gallon not produced here in the US. We’ll end up importing more oil. Worse, the higher mileage will come from smaller, less safe cars that cause more injuries and fatalities.

Only 6.9% of America’s energy came from renewables last year, and nearly all of that was biomass (mostly wood wastes) and hydroelectric. Wind and solar combined produced less than 0.5% of our energy – and they only work a third of the time. Moreover, wind turbines and solar panels require huge land areas. Just meeting New York City’s electricity needs eight hours a day would mean blanketing Connecticut with turbines.

Governor Richardson’s “alternative” energy is actually only minuscule supplemental energy. Killing off real fossil fuels before we have true alternatives is economic suicide, not responsible government.

Thanks to policies like these, New Mexico’s economic future is  in doubt. The Speaker of the House, Secretary of Economic Development, Legislative Finance Committee Executive Director and other key legislators realize we need rural economic development and additional tax revenue.

About half of New Mexico’s general fund, and much of its public school permanent fund, once rolled in from oil and mining industries. But the old mines are mostly played out, the oil and gas wells are drying up, and the governor’s policies all but ensure that no new ones will take their place. When they’re gone, New Mexico will remain one of the poorest states in America – worse than Juarez.

Some think the revenue shortfall can be made up by uranium mining, with its high salaries, significant capital investment, severance taxes and royalties, and related economic spin-offs. But the Governor’s Office is not keen on this either.

In fact, Bill Richardson is playing energy and revenue killer in other ways, too. He says he doesn’t think “oil and gas drilling can be conducted in the Galisteo Basin without placing our environment and water quality at risk.”

He’s talking about purely speculative harm from tiny amounts of chemicals in drilling fluids that are 95% water and clay – and supports new regulations for handling fluids that would add up to $300,000 to the cost of a single well. Meanwhile, he’s silent about policies that turn forests into tinder boxes and cause monster fires that have destroyed millions of acres of soil, streams and habitats.

State Representative James Strickler who represents the natural gas-rich Farmington area has said of the new regulations, “As a freshman legislator and 30-year veteran in the oil and gas industry, I know the regulation is poorly thought out, ineffective and a huge threat to our state economy.” If it is implemented, “legislators will be pressured to raise income, property and gross receipts taxes in an effort to replace lost revenue. Governor Richardson is trying to over-regulate us out of business for no environmental gain, and with no cost benefit analysis.”

Energy experts say 30-50% of the price of gas at the pump can be directly traced to environmental regulations. With gas at $3.00 a gallon, up to $1.50 of the price you pay at the pump is the result of regulations like these. Add in an average of $.50 per gallon in local, state and federal taxes, and as little as $1.00 of the pump price is really for gas!

We who live here know Governor Richardson’s policies are due to his ties to national environmental groups and their multi-million-dollar campaigns. One such example is a collaboration to eliminate fossil fuels – a campaign they call “No Dirty Oil and Gas,” or NoDOG. He wants their vocal support, and their cash, phone bank and canvassing contributions. And we’re paying the price.

The endless agency hearings on the new drilling rules were so discouraging that  independent producer Tom Mullins said, “I’m no longer looking to invest here. I’m looking to cut my losses.”

A company thinking about investing in New Mexico commented that Richardson’s policies send “a strong anti-business message to ALL industry and employers (both current and prospective).”

We’re hearing that all over New Mexico because of Governor Bill Richardson. How would you like to hear that all over America because of President Bill Richardson?

Paul Gessing is President of the Rio Grande Foundation, a non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.