Our blogging of the historic oil reserves discovered in the SE corner of the state and the $1.1 billion state budget surplus already generated by the oil boom there drew an unusually large amount of e-mail.

For a minute we thought we were being spammed by the Sierra Club since so many of the writers damned the oil discovery and the oil surplus because of the climate risk of fossil fuels. So in contrast to what one reader dubbed our "giddiness" over the oil discovery and the state surpluses being generated, we proceed to Reader Vox Populi

Reader Greg Smith writes:

Joe, Take a deep breath. Think about the Permian basin discovery in the context of climate change. Sadly, NM needs the cash now. It would be foolish to cut back our state's oil production today and let other producers make up the difference while global demand stays so high. That would simply shift money without helping the climate. However, the world needs to leave roughly 80% of proven oil and gas reserves in the ground. The time is fast approaching when the world must agree to act accordingly. So let's not count on perpetually pumping Permian. Let's plan on being ready to cooperate with the rest of the world, starting on a time scale measured in years--not decades--and then ramping it down to zero

Reader Alan Schwartz says:

Joe, When I moved here 22 years ago a different group of "experts" told us that the Albuquerque aquifer was the size of Lake Michigan. I guess we just have to hope that this latest group of experts has done a better job.

Reader "Crockagator" writes:

Hey, Joe. If we are on the road to many, many dollars from the oil discovery who needs a top bond rating? We just need to pay for everything with cash plus pre-pay all outstanding bond debt. The Crockagator. 

Actually, Crockagator, the state House Speaker is now suggesting that many upcoming construction projects be paid for with the cash surplus--not bonds.

Reader Bruce Shah writes:

I guess for me the irritation is that not one of the policy players in the oil boom added a climate caution. I agree completely with your comment about our state's critical needs. But we have an $18-billion reserve in the form of the Land Grant Permanent Fund. A tiny portion of that could do the trick--at the same time we slowed the drilling. 

Any bets on Senate Finance Committee Chairman John Arthur Smith hiding behind the Permian estimates and again stonewalling dipping into the reserves? Not sure I am accurate but we are last--or second to last--in every social index and first, second or third in reserves.

Well, Bruce, you didn't have to wait long. The top legislators dealing with finance are all putting up warning flags about spending the surplus on other than one time expenses and most of them also continue to oppose using a small portion of the Permanent Fund for early childhood education. It's not easy getting rid of a poverty mentality, even as the riches pile up in front of them.

ANONYMOUS BUT QUOTABLE

An anonymous reader from ABQ writes:

I am in complete agreement with you and your “no bullshit economists” about the need to invest in people to improve our state’s economy. However. I despair at the lack of discussion about the conflict between the source of the surplus and the need to reduce emissions of greenhouse gases, and the lack of discussion about targeting a significant part of the investment in people toward reducing emissions and our state’s dependence on them. While doing the basic reinvestment so desperately needed in our schools and our support services for children, we also should be looking at things like:

--Tax credits for investment in renewable energy and in improving the energy efficiency of both public and private buildings;

--Replacing transportation vehicles with others that reduce fossil fuel consumption 

--Economic development that does not rely on producing or using fossil fuels;
making our state more resilient in anticipation of continued climate change (reduced snowpack and precipitation, increased risk of drought/heat waves/fires).

Yes, New Mexico is an economically poor state, and we need to take advantage of the economic opportunity that has landed in our lap. And the oil and gas is likely to get extracted and used no matter what our state does alone. But we need to bear in mind that this is all being done on the back of our climate and the long-term health of the natural systems we depend on (and that make New Mexico the place so many of us love).

Good stuff, Mr. Anonymous. Why didn't we write that?

BOOM AND BUSTS

Longtime reader Norm Gagne writes:

The discovery of huge oil and gas reserves in the Permian Basin has many counting and planning the spending of enhanced state revenues far into the future. While we surely could use a financial boost for a cash starved state budget today and tomorrow, the collective huzzahs overlook sobering facts. As surely as dawn follows the dark, oil busts follow oil booms. While increased U.S. production has decreased the impact of unscrupulous and less politically stable suppliers, worldwide supply of oil still depends too much on the likes of Russia, Venezuela and the Middle Eastern countries. 

The increasingly dire reports of climate scientists highlight the urgency of moving away from carbon fuel energy sources. The lessons, it would seem, are to spend the new money wisely, to meet vast unmet needs to be sure, but with a significant chunk devoted to developing a non-carbon based future economy for New Mexico.

Larry Gioannini writes:

I'm dismayed and disappointed by your giddiness over the Permian Basin oil boom. Either of the two most likely outcomes of this are disastrous. If the rest of the world acts quickly and responsibly with regard to Climate Change New Mexico will be among those possessing the largest stranded asset of all time. If we don't act quickly enough to limit the damage from Climate Change, New Mexico will contribute significantly to the ever accelerating and underestimated climate disasters bring misery to billions of people. Really not a time for Champagne and cigars.

Thanks, Larry. But we remain giddy (and unapologetic) about the good that extra money could do in making New Mexico a better place in which to live. We're with you on climate change but the youth of today who are being shortchanged certainly qualify as a stranded asset. As for champagne and cigars, is there ever a bad time for them?

Paul Sandman writes:

Joe, With all the talk about oil and gas, what about the conversation in Poland about getting rid of all fossil fuel use? The protests outside the House Minority Leader's office by fellow Dem’s shows their determination.

SAVE IT ALL

Kevin Garcia writes:

Joe, in regards to the projected budget surplus of $1.1 billion, you sure sound like many of the politician's in the past who have argued for over fifty years to spend the corpus of the Permanent Funds on recurring outlays! Since these revenues are from a Extractive and Depleting revenue source, we would be prudent to spend funds on education and other critical programs, but we should also continue to work to build the corpus of these Permanent Funds for future generations! What would be so wrong in building these funds up to $50 or $100 billion over time before the oil runs out and thus thereby securing a permanent source of investment revenues for future generations of New Mexicans? Given a projected earnings rate of 7% a permanent recurring revenue source of $3.5 to $7 billion for programs could be our legacy for the education of future generations of New Mexicans! 

The state's two large permanent funds now hold $24 billion.

NOT PERSONAL, JOE 

Cheryl Haaker writes:

"Massive and historic reserves of oil and natural gas." The need and the greed preclude New Mexico and Texas from doing the right thing, which is leaving the stuff in the ground. It's actually shocking that these discussions centering around money will totally avoid the global warming/climate change aspects of producing and burning this oil and gas. I would like to see every initiative to drill or frack be paired with an initiative to increase the supplies of renewable energy sources. Charge higher royalties for existing and new production to further equalize and tilt the playing field. Global climate change doesn't stop just because you turn to the financial pages.  Don't take this rant personally. I really appreciate the way you've helped us understand La Politica. It's just that the pervasive blindness towards climate change frequently gets to me.

No offense taken, Cheryl. We are not unaware of the paradox the oil discovery presents--a potentially huge gift for the aspirations of our people today--in this moment--and the potential danger of fossil fuels to future generations. Previous reader suggestions are helpful--that today we embrace our good financial fortunes to help resolve the state's long-standing social conditions crisis but also lay plans to gradually wean ourselves from oil dependency.

RICH AND/OR DEAD

Deryle Perryman writes

Interesting predicament presented in your column, eh? If those reports of the oil bonanza are anywhere near likely, apparently we're being presented the option of becoming "rich" and/or dead.

ART ATTACK

Charles Knoblauch writes of ART, the boondoggle rapid transit project for ABQ's Central Avenue:

Joe, for reasons I can’t quite figure out, there has been no real noise about the switch of the ART vehicles from electric to diesel. One of the great selling points was the non-polluting buses. Now that has been jettisoned with no outcry to have the heads of the city council members, former Mayor Berry, or the planners. We are now stuck with an unnavigable Central, belly up businesses, unnecessary new buses, and a big ass bill.
Maybe the problem is the lack of yellow vests in NM. Just a thought.

For those unsure about the "yellow vest" reference, check your Paris news feed.

Thanks for the mail. Social media sites such as Facebook are full of comment and opinion and while often entertaining. it's not always thoughtful. That's why we look forward to Reader Vox Populi and that's why. . . .

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Darn. It's only $1.1. billion. No matter. The projected state budget surplus could be triple that and still the hawks that control the Legislative Finance Committee would urge that most of it be hidden under the mattress.

And that's what happened Monday as the surplus projection from state economists for the budget year that begins next July 1 came in lower than expected in some quarters but is still a massive $1.1 billion or 17 percent of the current $6.3 billion state budget.

That enormous number was a bit of a letdown because state House Speaker Egolf threw out the possibility of $2 billion and Senate Finance Committee Chairman John Arthur Smith mentioned $1.5 billion. Still, it is the largest projected dollar surplus in the history of the state. No one is sneezing at it and it could still go higher.

The LFC bean counters immediately warned that spending a substantial portion of the money on recurring programs (like public education) would put the state at risk and urged much of it be saved.

They advocate that any new spending be mainly on one time projects like road work etc. Never mind that New Mexico has been at risk for the past decade with stagnant economic and population growth, rampant crime and horrific child abuse and murders stemming from an economic and social decline that has caused untold suffering and kept the state in the gutter in the important national rankings.

The point that the LFC economists continue to miss and that those on our list of "No Bullshit Economists" get--including Dr. Chris Erickson and now retired Dr. Jim Peach of NMSU--is that an investment in people is now critical to reversing the state's poor economic and educational standing. Not taking that investment risk is the real risk New Mexico has taken and it continues to stare at the depressing consequences.

A COMING CLASH

The austerity hawks desire to squirrel away even more cash and shy away from recurring spending will clash somewhat with the views of incoming Governor Lujan Grisham who said during the campaign increased spending on public education and upgrading the beleaguered Children, Youth and Families Department is essential. But it remains to be seen how aggressive she will be and whether the hawks will corner her. And also whether she will be satisfied with base hits that the spin doctors will try to frame as home runs.

IT'S DIFFERENT NOW

Not unexpectedly, the LFC economists downplayed the enormity of the surplus. They characterized it as being "similar" to ones over a decade ago and that ultimately disappeared in an oil bear market, leaving the state with a big budget hole because of increased spending.

However, the series of annual surpluses that were presided over by Governor Richardson--and led him to rebate some of the money directly to taxpayers--were in the hundreds of millions--not over $1 billion--and they were not accompanied by technology that has made oil drilling profitable in the Permian Basin even if prices go into the low 40's. Not to mention that the Permian is now found to hold some of the largest oil reserves on the planet. Things do change.

The risk is that the economists are overplaying the Bear market scenario for New Mexico. And, of course, we could be downplaying it. That's the argument going forward.

FORWARD OR STATIC?

We and others who see the cup half full and a great opportunity to begin the long march in reversing the state's dismal social conditions with aggressive budgeting are not going to bang our heads against the wall. The point has been made over and over again for the past eight years. If New Mexico wants strategic investments in its people it can now do so with that $1.1 billion surplus and a small portion of the $18 billion Land Grant Permanent Fund. It's that simple.

If Lujan Grisham and the Legislature want the incrementalism of the Richardson years--when the state was a much different place and not nearly as plagued with the menacing issues that it is today--that's their call. From this corner that looks like a recipe for continued failure. There's really not much more to be said.

THE BOTTOM LINES

In a first draft Monday we had the projected state surplus for the budget year that goes to next July 1 at $900 billion. Of course, we meant $900 million. And in the new budget projections released Monday it went up to $950 million.

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The discovery of massive and historic reserves of oil and natural gas in the Permian Basin of Texas and SE New Mexico could recast the narrative of the state's financial future and its standing at the bottom of most national rankings for education and social achievement.

The discovery is truly epic and in the decades ahead will generate tens of billions of dollars for the state, money totals beyond the imaginations of even the most optimistic:

The federal government has discovered a massive new reserve of oil and natural gas in Texas and New Mexico that it says has the “largest continuous oil and gas resource potential ever assessed.”  Two underground layers in the Delaware known as the Wolfcamp Shale and Bone Spring Formation contain 46.3 billion barrels of unrecovered oil and 281 trillion cubic feet of natural gas, the DOI announced. That’s the largest oil and gas reserve the U.S. Geological Survey has ever discovered.

The discovery could very well upend the conversation over the state's Land Grant Permanent Fund (aka Permanent School Fund) that receives funds from oil and gas leases and royalties. The fund, currently at $18 billion, now appears destined to grow even more enormous and unimpeded for years and years.

A thorny question for austerity hawks is how do they continue to warn that the future of the fund is uncertain because oil and gas exploration is uncertain and, therefore, the fund should not be tapped for current urgent needs such as very early childhood education?

The continued growth of the fund is now as certain as the geologic formations in the Permian Basin containing those billions of barrels of oil. Only occasional down markets in the years ahead will interrupt what will truly be game changing surpluses. Also, any downturns could be less punishing because even in weak markets production will be declining from record-setting levels.

Ryan Flynn, executive director of the NM Oil and Gas Association and not known as a flaming liberal, reminds us that the Permian is already booming and is the major factor in the budget surplus for the fiscal year starting next July 1 that will be $1.1 billion, according to the latest budget forecast released Monday. And he thinks that is only the beginning:

That surplus has the potential to become the norm, not the exception, as we move forward.

There in a nutshell is the argument that will dominate the legislative session that begins in January. Is it time to treat most of the surplus as "the new normal," meaning the state can use it to fund "recurring" budget items such as teacher pay hikes, rebuilding CYFD, and most important the overall public school budget?

Surely, the discovery of this oil treasure lends credence to the spenders and not the savers. That's especially so with the state ranking so far down the ladder nationally and a district court ruling hanging over its head that says it's violating the Constitution by not providing equal education opportunities for public school students.

LIBS LIKING IT

Ryan Flynn

Ironically, it will now be the liberals citing conservatives in oil and gas who are forecasting something akin to a permanent bull market. They will use that to advance their case for a constitutional amendment to tap the Permanent Fund for early childhood education and to pump up spending in other programs. Back to Flynn:

. . . The new USGS estimates mean New Mexico will benefit from continued production for many years to come, Flynn said. . . "Even for someone who understands the resources and potential of the Permian Basin, I can’t help but be surprised by the sheer enormity of what the USGS has reported. The Permian resources shared by New Mexico and Texas make this area one of the most important places in the world in terms of oil production. Those are very important pieces of the basin, but it’s not the whole thing. That’s what makes this report so surprising, even for us."

That declaration will likely be too much for the austerity hawks to overcome. There are already signs, according to House Speaker Egolf, that they will come to the table when it comes to appropriating money for public education to get into compliance with the court order.

COMING UP SHORT

Spoiling the party some was the December oil and gas lease sales by the Feds. Senate Finance Committee Chairman John Arthur Smith had speculated those could contribute another $150 million to the state budget surplus. But the sale went off at only $39 million. Still, the state gets about half that cash.

HISTORY REPEATS

In 1928 the first major New Mexico oil discovery was announced near Hobbs in Lea County. It was an history changing event. 90 years later an announcement of equal if not even more far reaching ramifications includes not just Lea but also Eddy county, both of which are now part of the largest oil and gas reserve in US history.

LUNDSTROM’S OUTLOOK

Before the stunning news about the Permian discovery, Dem Rep. Patricia Lundstrom, chair of the Legislative Finance Committee as well as the House Appropriations Committee, wrote in the LFC newsletter that the budget surplus for the current budget year that ends July 1 is forecast at a very hefty $900 million for a general fund budget of $6.3 billion. That means reserves will be more than restored and that the state's bond rating will be solid. Eighty percent of the surplus money coming into the state is directly from the oil fields, says the state.

Lundstrom sees the upcoming political clash the way we do. She says:

There will be a scramble for the surplus but the real (fight) will be for the new money, the amount of ongoing revenue over the prior year appropriations that can be used for expanding state services. That money will bring out virtually every advocacy group in the state – from those who fight for children’s services to those who fight for business tax breaks.

The state has been so famished in recent years that $1.1 billion (or more) will be sucked up faster than you might think. Lundstrom opines:

Budget drafters will be faced with court-ordered education reforms. . . growth in Medicaid, multiyear waiting lists for certain services for the disabled, way below-market wages for state employees, proposed expansions of successful early childhood services to all families who qualify. . . and pent-up demand in state agencies that have been hanging on for years, trying to provide services with reduced staffs and limited funds. That group includes the program that protects children from abuse, where caseload growth has continued to outrun staff increases.

The good news is that if Flynn and others have it right, we are only in year one of many, many years of budget surpluses. The party pooper, as always, would be a crash in oil prices. However, there's even some good news there. Because of advanced technology companies are now able to turn a profit even if oil drops to the low 40's per barrel. So the crashes in price and volume will have to be deeper than the past to dramatically disrupt the state's cash flow.

ENVIRONMENT CONCERNS

It goes without saying that the incoming administration is going to have crack the whip when it comes to patrolling the environment around the Permian. Problems are already being red flagged by outgoing Land Commissioner Aubrey Dunn, but with a boatload of enviros clamoring to get on MLG's bandwagon, she's not going to lack for policy advice on keeping the boom within its proper boundaries.

And the folks in Lea and Eddy counties need the new Guv (who did not carry their counties) and their legislators to bang the drum hard for immediate road improvements in Lea to overcome traffic hassles. And the state and the oil boys need to work together to keep adding pipeline capacity to ship the oil out. It's not going to finance a New Mexico education turnaround if it stays in the ground.

PEARCE TAKES PARTY

It's probably difficult for foes of Rep. Steve Pearce to envy him over his overwhelming win of the chairmanship of the NM Republican Party at Saturday's GOP Central Committee meeting in ABQ.

Pearce faces a Herculean task in turning the party around, after its crushing defeats in the midterm that included Pearce's loss of the governor's race to MLG and a loss of GOP House seats that took the Dem majority in the state House to 46 to 24.

If Pearce and the R's can't put it into high gear, 2020 could be just as bad. It's assumed Trump will be the GOP nominee for President and that he will lose New Mexico. The question is by how much.

And can Pearce find a viable opponent for Senator Tom Udall, who is signaling a re-election run? That could help bring out Republicans and help them recapture some of the state House seats that were lost in November.

And then there's the state Senate where Republicans once thought safe could be threatened by yet another blue wave as the state continues to drift to the Dems.

And then there's Pearce insistence on keeping open the possibility of trying to reclaim his southern congressional seat which he gave up to run for Governor and that is now occupied by Dem Xochitl Torres Small.

It's "way too early" he said when questioned about whether he will make another run. Insiders say his wife Cynthia is not keen on a return to DC, but Pearce isn't shutting the door. If he runs, he will have to begin raising money soon. That would in effect bring his chairmanship to an end as he pursued his personal ambition, not that of the party.

We'll know soon enough if Pearce's pursuit of the chairmanship is the real deal or simply a cover to feed a DC addiction.

Pearce beat businessman John Rockwell 276 to 101, a 73 percent victory. But looking at what he faces the win might fall into the category of "be careful what you wish for."

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Gov. Martinez's political machine is making a last gasp effort to thwart the rise of Steve Pearce to the chairmanship of the state GOP, but it appears to have little chance of success when members of the Republican Central Committee meet Saturday to replace outgoing chairman Ryan Cangiolosi.

The machine candidate is ABQ businessman John Rockwell, who says Pearce represents the status quo and that a new face is needed. But this is Rockwell's third time running for chairman, having been soundly rejected in his past two efforts. In addition, his critics say he has done little to advance his business credentials which are key in raising the millions of dollars the party will need going forward. On the other hand, Pearce is both a veteran congressman and oilman who has the biz connections needed to raise the cash.

The Martinez faction had former NM GOP House Speaker Don Tripp issue an endorsement of Rockwell over Pearce. But Tripp served only one term as speaker during which he did little to advance the GOP's chances of holding on to the majority in the chamber. They promptly lost to the Dems after only one term under Tripp.

The Machine appears to have flipped one R who has become prominent in recent months--Michelle Garcia Holmes. She was an unsuccessful independent ABQ mayoral candidate in 2017 and Pearce's running mate in his unsuccessful Guv run. She has now turned on Pearce and announced her support of Rockwell. But she is a newcomer to the party and has little influence with the central committee.

Meanwhile, Pearce has secured the endorsement of incoming state House Minority Leader James Townsend of Artesia and State Rep. Yvette Herrell of Alamogordo who lost her bid for Congress.

It will be interesting to see how many votes will go against Pearce. Another argument against him is that he has not sworn off any 2020 run for the southern congressional seat he gave up to run for Guv. But Pearce brings to the table money--lots of it--and he has enough of his own so he won't be forced to kneel before the altar of Martinez acolytes like former GOP National Committeeman Pat Rogers who was ousted by much of the same central committee that will pick the new chair.

Pearce may not represent a change to Rockwell, who is still clinging to the skirts of outgoing Governor Martinez, but he is a seismic shift away from that Governor and her notorious political consultant Jay McCleskey who have made so many enemies in the party. Ultimately it is that change that most insider Republicans hunger for and which Pearce represents.

ABOUT THAT RACINO

The State Racing Commission Thursday tabled a decision on the proposed sixth racino until pending litigation over it is resolved.

This week we pointed to a possible racino (slot machines and horse racing) in the Clovis area as providing a potential kick start to the 2019 economy on the east side. Reader Richard Randles responds:

You must have good info not to mention the other cities besides Clovis that are in contention for the racino. I have no opinion other than NM does not have the horse inventory for another track per a very reliable source who has been in racing over 40 years nationwide. 

The price of oil continues to hug the low 50's, which is around the $55 mark that the bean counters at the Legislative Finance Committee are counting on to give the state a budget surplus in the vicinity of $1.5 billion and perhaps more.

The oil price is almost as critical to the success of Governor-elect Lujan Grisham as her Election Night victory. Without that surplus you're pedaling in place. With it you're off to the races.

The increasing talk of a possible national recession brought about by jittery markets is worrisome for New Mexico policy makers. The old paradigm that New Mexico is largely immune to national downturns is long gone. It was only this week that it was announced the ABQ metro finally inched past the employment levels it had in 2007. That's 12 years of digging out of a deep, deep hole while our neighboring states were booming.

Much of the employment gains have been in the nongovernmental sector, with low-paying service and hospitality jobs making up a large share. The construction industry has rebounded on the strength of the Los Lunas Facebook build out.

A national recession here would hit those who are least prepared to weather it--those in the service and hospitality industry making low wages. Those businesses would naturally slow as consumers shied away and tourism contracted.

Until the Great Recession took hold a decade ago good paying government jobs (and government contracting jobs) were the stabilizing force. But we lost many of them through federal budget cuts. The economy here is now more dependent on national trends.

Still, there is an argument to be made that another recession might not be as severe as it would be elsewhere. But that's because our state has already lost so much in the way of jobs, economic development, stagnant home prices and population that there is essentially much less to lose.

Given the iffy economic backdrop the projected giant state budget surplus looms large. It could finance an array of projects that would create jobs and provide some economic stimulus that could soften the blow of a downturn.

ECONOMIC DRIVERS

There are some but not many economic drivers outside of the booming oilfields that could give 2019 a boost.

--The Netflix deal with ABQ is set at $100 million a year in production for ten years.

--If the NM Racing Commission approves a racino for the Clovis area that would draw Texas tourists to that region. The commission will decide by the end of the year.

--The aforementioned Facebook build out in Los Lunas should continue, recession or no recession.

--The incoming administration in Santa Fe is expected to boost employment levels in critical agencies like CYFD where jobs have been cut. That will give the Santa Fe area a pop.

--The City of ABQ is working to add hundreds of police officers to its force. Thanks to a tax increase those are now well paying jobs. If a good share of them are not simply lateral transfers from other metro police agencies they will add to the economy.

ECONOMIC WORRIES

As usual, there are many things to fret over when it comes to advancing the state and metro economy.

--The ABQ International Balloon Fiesta--the state's premier tourist attraction that brings tens of millions into the economy--appears to be wobbling. Attendance has peaked, which is to be expected, but management execution is also lagging, as witnessed by this year's park and ride fiasco. It wasn't the first time and if they can't get it fixed the damage could be irreversible. The Fiesta has already permanently lost thousands of paying fans because of the incompetence.

--Crime is reported to be coming down some in ABQ but nowhere near fast enough to make the metro more economically attractive. The levels reached here have been atrocious, so you will need stunning drops to reverse the perception of outsiders. So far, we have not seen that kind of decline or any inkling of it.

--Education performance lags badly, another key driver in attracting good paying jobs for the locals. If Lujan Grisham and company can't give a convincing presentation on how and why that will fundamentally change, there will be more folks pulling up their stakes and moving on.

THE BOTTOM LINES

Longtime GOP State Senator Carroll Leavell has resigned. The 82 year old has been battling cancer for a number of years. He was first elected to his Eddy and Lea county seat in 1996. The county commissions of those two counties could recommend a replacement (s) to Gov. Martinez whose term expires at month's end but the new governor would get the appointment if the process goes past Jan. 1. Democratic Senator Pete Campos offered these thoughts on Leavell of Jal:

He has a sharp intelligence that guided us through tough financial times, an uncanny ability to present the most complex insurance matters and assure his colleagues that the legislative purpose was written for the common good, and presented himself in the most humble and dignified fashion which earned our confidence that “his word was his bond.” State Senator Leavell, you are a great statesman and confidant. God’s speed to you and Bobbie in all that you do.

The NM Senate Republican Office came with this tribute.

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Anxious progressives are eyeing the upcoming legislative session, with one of those in the forefront of the movement admitting that uncertainty prevails. That's despite the sweeping election victories posted by Democrats in the state House and the gubernatorial race.

Former ABQ state Senator and City Councilor Eric Griego, 52, now state director of the progressive Working Families Party, says conservative Democrats who often plot with Republicans in the state Senate still represent a formidable obstacle to the progressive agenda.

Legislation we favor will rush through the House where Democrats are not as split but the real test will be when those bills hit the Senate. That's where the intrigue begins.

Griego says the first signal on whether the long-standing conservative coalition will acknowledge the election results could be the proposal to raise the minimum wage. He says progressives would like $15 an hour but would be happy if they can pop it from $7.50 to $10.

Governor-elect Lujan Griham supports a $10 minimum now, with a bump to $12 an hour in several years and she wants it indexed for inflation.

Griego thinks the House will go for the $10 or more with no restrictions. Then. . .

Grants area Senator Clemente Sanchez of the conservative coalition will probably again be key. He sponsored an increase in the minimum to $9 last year but it had attached an $8 an hour "training wage" for the first two months of employment. And unlike the minimum wages already on the books in Santa Fe, ABQ and Las Cruces, the bill did not contain any future adjustments for inflation. Griego said those are deal breakers for the progressives and adds:

The House is likely to send over a clean $10 an hour bill without those provisions--a straight up increase. Will Senator Sanchez and others in the coalition go for that or not? That will be a critical moment that will tell us much about the course of this post-election legislative session. 

MURKY OUTLOOK

Eric Griego

Griego thinks one item on the progressive check list has a decent chance of passing--same day voter registration which is being advocated by Secretary of State Toulouse Oliver.

But the outlook is murky for other progressive favorites such as firm state regulation of methane leaks in the oil and gas fields. That will have to come from the state regulatory process under the Governor.

On the proposed constitutional amendment to tap a small portion of the $18 billion Land Grant Permanent Fund for early childhood programs, Griego says there are already efforts to water it down dramatically or in the case of the coalition prevent passage of any amendment. Lujan Grisham says she supports the amendment but has differed with progressives who want a full one percent per year of the Fund to go to early childhood education.

Initial comments from Senators Sanchez and John Arthur Smith remain unfavorable toward the amendment which would require voter approval. Senators George Munoz, Mary Kay Papen and John Sapien are the other Dems who coalesce with the R's in thwarting the progressives and have consistently opposed the amendment.

Griego says with the state moving increasingly toward the blue column the outcome of this session could hinge on whether any credible candidates begin to emerge to challenge the coalition Democrats in the 2020 primary elections.

If folks start putting their pictures in the window that could make a big difference.

Meanwhile the uncertainty and intrigue over the conservative Senate coalition will continue, only to be answered by the 60 days of lawmaking that will commence in January.

PASSING ON PAT

Councilor Davis

Speaking of progressives, the year is ending on a sour note for one the more prominent members of that tribe. ABQ Dem City Councilor Pat Davis, coming off a June primary defeat for the ABQ US House nomination, made it 0-2 Monday when the nine member council unanimously chose Dem Klarissa Pena as their new president for the next year.

Davis was campaigning behind the scenes for the post--his second attempt at it since he joined the council--but it was not to be. There were no sympathy cards coming his way from the 11th Floor. Mayor Keller and Councilor Davis have tangled on a variety of mostly low-key matters in Keller's first year at the helm. Davis as President could have slowed his honor's mo.

There is some irony here because it was progressive Davis who was thought to be the most natural ally of Dem Keller when the new mayor came in last year and that the three moderate west side councilors--Pena, Sanchez and Borrego--would be the big thorns in his side.

What's next for Davis? Well, he's up for re-election next year to his liberal SE Heights district but has not yet said if he will run again. Now that there's a Democratic Governor could he end up in her administration? He left his job as head of liberal grassroots group ProgressNow NM when he made his congressional bid.

 STEPHANIE SAYS. . .

State Land Commissioner-elect Stephen Garcia Richard was scored by one of the Alligators here Monday for going silent when asked to respond to media inquires about potential regulations for methane. In a newsletter following that blog, Garcia Richard lists her priorities and said this about methane:

On average, the people of New Mexico lose at least $100,000 a month in revenue that should fund our schools and hospitals from industry leaks and intentionally flaring methane. A series of rules must be implemented to require the capture and accurate reporting of methane.

She also announced a public tour prior to the legislative session that includes a December 15 meeting in Silver City and sessions in Las Cruces, Santa Fe and ABQ. So there you go Gators, Stephanie speaks!

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What will Governor-elect Michelle Lujan Grisham do for Bernalillo County? It's not as if something special shouldn't be in store. The final certified election results reveal just how pivotal Big BernCo was to MLG's victory and thus the expectation that while she serves the entire state, the ABQ metro has a special calling card with the soon-to-be 32nd New Mexico Governor.

For starters, she carried the state's largest county by a margin of 62% to 38% over Republican Steve Pearce. That landslide translated into an astounding margin of victory of 58,259, the largest here in gubernatorial history. Put another way: Lujan Grisham won the governorship by100,277 votes statewide. If only her BernCo victory remained intact and her lead outside the county had completely vanished she would still be headed to the Fourth Floor. That's BernCo power talking.

The ABQ metro which former Mayor Marty Chavez dumbed the "economic engine that drives the state," has many needs and problems after a grueling decade long recession/stagnation. Crime and drugs top the list; a mostly listless economy is a close second. Here's a list of projects the city council is planning to propose for state funding,

Will MLG effectively team with Mayor Keller and the metro's legislative delegation and think big for the state's big city? There are 58,259 reasons why she should.

COUNTIES CARRIED

If the Guv election were decided by the number of counties a candidate won, Republican Pearce would be the one announcing transition team members. Pearce carried 19 of the 33 counties. Those numbers reveal the widening split between the rural areas of the state and the major population centers on the Rio Grande--ABQ, Santa Fe and Las Cruces that went heavily for MLG.

BANNER COUNTIES

Taos, also on the Rio, was her banner county, giving her 81 percent of the vote. Pearce's home county of Lea was his sweet spot. He corralled 78 percent of the vote in his home county.

NOT QUITE RIGHT

We glanced at a newspaper article that put the total voter turnout for the November election below 700,000 and the projected state surplus for the next budget year at about $1 billion. But the SOS reports the final turnout number is 701,654 and the budget surplus projection is actually at $1.2 billion and expected to increase when the next projection is made.

STEPHANIE'S SILENCE

The woman about to become the next state land commissioner has clammed up and that has one of the Senior Alligators out on patrol. Look out. Here comes a Gator strike:

Concerning the transition of Democrat Stephanie Garcia-Richard to Land Commissioner. Why is she standing silent on the methane regulations when the out-going Republican Land Commissioner Aubrey Dunn is shouting from the rooftops about egregious environmental violations, the lack of enforcement and the lack of cleanup by oil companies? Why did she have no comment in the front page story about NM ranking at the bottom in methane emissions control? Her silence is not only curious but deafening.

Could it be that Patrick Padilla, former NMOGA employee and EOG Resources (an oil and gas company in Midland) lobbyist is driving the ship and is a key member of her transition team? Why the change of heart from her progressive policy of clean up and clean energy to a retreat to the status quo of what oil and gas wants, oil and gas gets?

Well, we don't know if Stephanie is retreating but she is pretty darn quiet for a candidate who had some of the loudest environmental supporters on the campaign trail. And they gave her big money while her GOP foe was mostly financed by the oil boys.

Her mum is the word stance might be okay if she were still a state representative, but won't cut it when you're in charge of the state's second most powerful constitutional office:

Garcia Richard has not responded since the election to repeated ABQ Journal inquiries by phone and email to discuss her position.

One would expect Garcia Richard to soften somewhat her most ardent progressive stances as she is now supervising a once in a generation explosion in oil production that will add billions to the state's coffers in the coming years. But the folks who brought her to the party still want to dance, not watch her play wallflower.

And there you have your first Gator strike, Stephanie. Congrats, or something.

INDIAN COUNTRY (CONT.)

Leonard Tsosie

Our coverage of the Navajo Nation election brought news to our e-mail that former Dem NM State Senator (1993-'07) and Navajo Nation Council delegate Leonard Tsosie was defeated in his bid for re-election to the council Nov. 6. Tosise, 63, was first elected to the council in 2006. So what went wrong? We call once again on Navajo Gator:

Joe, his opponent Daniel Tso had previously served on the council and has been very active with the progressive arm of the Democratic Party, opposing drilling near Chaco National Park and fracking. Tsosie has also made enemies on the council by objecting to issues on the council floor, most notably trying to raise the council salary by referendum. It’s been interesting to see Tsosie become more alienated from his peers and having his home chapters see him as an obstacle. Moreover, he just seemed to lose the passion for his place on the council, hence his haphazard campaign— few radio ads and a few signs posted near his chapters. A new rumor: Tsosie is running for his old NM senate seat held by Bennie Shendo.

Shendo vs. Tsosie would be a 2020 Democratic primary. No R's need apply in the heavy Dem district.

MORE FOUR CORNERS

From reader Gordon Glass in Farmington, we get this:

Joe, Thank you for mentioning the Navajo influence on Democratic election successes in both NM and AZ. I encourage you to comment on how the Senators, US Reps and even the new local State Rep. Anthony Allison might immediately address the challenges of declining coal and related power production including a shift to renewables. These candidates received strong support AND need to work together in visible ways to address these difficult challenges that also affect the Hopi people as well.

Thanks for the note, Gordon. Dem Rep.-elect Allison, a retired electrician, pulled off one of the biggest Election Night upsets when he defeated fellow Navajo and popular three term GOP State Rep. Sharon Clahchischilliage in the Four Corners district as the blue wave flowed over and around the Rez.

As for the switch to renewables, PNM is set to close down its coal-fired San Juan Generating Station in 2022 which will mean hundreds of lost jobs. Reader Glass is involved in the San Juan Citizens Alliance, an enviro group working to limit the economic damage that will be caused by the closure.

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As we left you yesterday Rep. Ben Ray Lujan was about to become the fourth ranking Democratic leader in the US House of Representatives. And it happened. He was chosen without opposition as Assistant Democratic Leader.

And as we speculated, that means he holds the highest leadership post ever held by a NM US House member.

And he's probably the highest ranking NM leader ever in either the House or Senate. We've had powerful Senate committee chairmen but none that we are aware of in the upper ranks of the senatorial leadership. You can read more about Lujan's new role on the Wednesday blog. Now on to today's action.

Giving US Senators a stiff re-election challenge just doesn't seem to be in the DNA of La Politica. With Dem Senator Tom Udall indicating he will seek a third term in 2020 and prepping his fund-raising machine, there is nary a peep of even a rumor about what name Republican will surface to take him on.

Rep. Ben Ray Lujan is about to secure the highest leadership post in the US Congress apparently ever held by a New Mexican. And if the stars continue to align for him he could reach even higher in a few short years. From DC:

The Democratic Caucus will meet (today) to nominate a speaker candidate for the Jan. 3 floor vote and to elect its other leaders for the 116th Congress. The races for the top four posts are uncontested, making it all but guaranteed that current Minority Leader Nancy Pelosi of California will be nominated for speaker, Minority Whip Steny H. Hoyer of Maryland will be elected majority leader, Assistant Democratic Leader James E. Clyburn of South Carolina will be elected majority whip and Democratic Congressional Campaign Committee Chairman Ben Ray Luján of New Mexico will be elected assistant leader.

Lujan, 46, represents a new generation of Democrats. He will be by far the youngest of the top four US House Dem leaders, the rest of whom are approaching 80 and presumably retirement.

That means when Pelosi and the others do retire Lujan could very well aspire to a higher leadership position, such as majority leader or majority whip. A Senior Alligator games it  out:

The Assistant Democratic Leader position is the fourth ranking leadership post. It means he will have a toehold in the leadership. He will be at the major meetings where policy is decided and the day to day floor schedule is decided. This is his opportunity to advance further in leadership. And that's where the real power is. He is the right age and he represents a heavy Hispanic district--a key constituency for the future of the Democratic party.  

In his new job Lujan will work with the various Dem caucuses and serve as a leadership liaison to the powerful appropriations committee.

His election success as chairman of the Dem Congressional Campaign Committee made possible his rise in the leadership ranks. That and a solid relationship with Rep. Pelosi. Also, his own political instincts, honed under his father, the late NM House Speaker Ben Lujan, have obviously served him well.

The impact on New Mexico that Lujan's rise in the leadership ranks will have is not immediately clear, but he will be well positioned to protect the state's interests and perhaps advance it by pushing for certain legislation to go to the floor. In the event a Democrat takes over the White House in 2020, he would be even better positioned.

Lujan was first elected in 2008 and in November was easily re-elected to his sixth term to his northern US House seat.

We said Lujan will "apparently" hold the highest leadership position ever achieved by a NM congressman or senator. That's to the best of our knowledge and that of other longtime observers. If we hear different, we'll let you know.

PEARCE'S PLAY

And some news on an outgoing congressman. That would be Republican Steve Pearce, who gave up his southern congressional seat to run for Governor but lost. His congressional term runs out in January. Pearce, not ready to retire, has announced he will seek the chairmanship of the NM GOP at its December 8 meeting. He is heavily favored to win, but. . .

There is grumbling that Pearce is not rejecting the possibility of making another run for the southern congressional seat in 2020. His doubters say if he is really serious about being party chairman and not just trying to resurrect his own political career he should state that he will not be a candidate.

The seat was won by Dem Xochitl Torres Small and she can be expected to seek re-election in 2020. But Pearce critics think that ABQ businessman John Rockwell, his opponent for the chairmanship, could pick up some steam if he presses the issue of Pearce's future political plans. The argument being that Pearce should be serving one master--the state GOP--not himself. The GOP Central committee meets December 8 to elect the new chair.

VOTE FINALIZED

Voter turnout in the November midterm was higher than just about anyone expected. The Secretary of State has counted 701,654 votes. Only one of our predictors here got it right. ABQ radio talk show host Eddy Aragon said turnout would go over the 700k mark. That's about 56 percent of the registered--way high for a midterm. Good call by Aragon. The rest of us fell far short. And from the SOS:

New Mexico’s State Canvassing Board met Tuesday in Santa Fe and unanimously certified the official results of the 2018 general election. The Board also officially ordered automatic recounts in two electoral contests, with another recount scheduled to be ordered when the Board reconvenes on Friday of this week. The official, certified results for every 2018 general election contest except those with pending recounts can be viewed on the Secretary of State’s website. . . The three members of the State Canvassing Board – Governor Martinez, Secretary of State Maggie Toulouse Oliver, and Chief Justice of the New Mexico Supreme Court Judith Nakamura –were all in attendance. 

At the meeting, Susana and her GOP lawyer buddy Pat Rogers raised questions about online absentee ballot requests. They're upset that Dem Xochitl Torres Small beat Republican Yvette Herrell for the southern congressional seat. But even if all those online ballots were invalidated Torres Small would still have won.

THE BOTTOM LINES

A number of readers point out that attorney Alan Hall, whose Dem candidacy for the ABQ area state senate seat held by Republican Candace Gould we blogged of Tuesday, is married to Democratic Public Regulation Commissioner Cynthia Hall. That raises this question: Will a Hall dynasty of Alan and Cynthia replace the Gould dynasty of Candace and her lobbying powerhouse husband Leland Gould? Stay tuned. . .

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