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New Mexico should strengthen, not weaken, anti-donation clause

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Paul J. Gessing

There are many important questions on New Mexican ballots as early voting begins Oct. 22. Amendment 2 has not received the same attention as Amendment 1 which concerns pre-K and early childhood spending, but voters will be asked to vote on this important issue as well.

Amendment 2 would, if passed, further weaken New Mexico’s “anti-donation clause” by allowing the legislature to “appropriate public funds for infrastructure that provides services primarily for residential use – such as internet, electricity, natural gas, water and sewage”.

The anti-donation clause dates back to the founding of New Mexico. At that time and in the decades that preceded it, the railways were among the country’s dominant economic interests. Prior to the adoption of the anti-donation clauses, government bonds were often donated to railroads. These often failed, leaving states and municipalities in debt while enriching the railroad “robber barons” of the day.

Those days are behind us, but special interest groups are always finding new ways to scam taxpayers out of more of their hard-earned money.

While infrastructure includes the aforementioned “infrastructural” elements, as with all constitutional amendments, the legislature will finalize the text of the law if it is accepted by voters. Allowing taxpayer funding for personal purposes could create problems, especially leading to what most New Mexicans would call corruption.

In 2005, the Santa Fe New Mexican reported that a state senator slipped $50,000 into that year’s Christmas Tree (capital expenditures) bill to pave a private road in Pecos where his friend, a registered lobbyist, lived. San Miguel County and the Village of Pecos did not request the appropriation and protested that it is illegal to use public funds to pave a private road.

This kind of shady deal will no longer be illegal if Amendment 2 passes. On the contrary, because the state’s legislature and residents will have expressed their support, this type of activity could quickly spread throughout the New Mexico government.

Rather than further weakening New Mexico’s anti-donation clause, we would like to see it strengthened and restored. Over the years, the clause’s effectiveness has been undermined by bipartisan corporate welfare advocates. Specifically, the legislature authorized local governments to “provide land, buildings, or infrastructure for facilities to support new or expanding businesses.”

While the theory behind “corporate welfare”—that is, giving corporations special benefits to get them to come to New Mexico—may sound like a good way to bring corporations into the State, economists of all political stripes agree that such efforts end up hurting taxpayers. , lead to corruption of officials and are inefficient and therefore prone to failure.

New Mexico has a long history of failed “corporate welfare” efforts. Remember Eclipse Aviation getting $100 million in your taxes under Bill Richardson just to go bankrupt? Spaceport America was built for the express benefit of billionaire Richard Branson’s Virgin Galactic and received $250 million in taxpayer subsidies. The facility has been open for 11 years now and has yet to launch a single paid space tourism flight.

When given the opportunity, voters often oppose corporate welfare. Last November, Albuquerque voters rightly viewed the New Mexico United stadium project as nothing less than corporate welfare and overwhelmingly rejected taxpayer funding at the polls. Now the team is moving towards building their own stadium, probably with private funding.

New Mexico’s anti-donation clause is an important protection for New Mexico taxpayers against the unholy alliance of powerful special interests and big government. The government already has many tools to generate economic development, including the adoption of better fiscal and regulatory policies for all. Amendment 2 would take New Mexico in the wrong direction.

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Paul J. Gessing is president of the Rio Grande Foundation of New Mexico.