Tuesday, December 11, 2018

State Projects Budget Surplus At $1.1 Billion Setting Up Battle Between Spending And Saving 

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.


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.


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.


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.


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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Monday, December 10, 2018

BOOM! Fed Study Discovers Biggest Ever Oil Reserve In SE NM And TX; State Stands To Reap Billions; Line Forms As New Mexico's Finances Morph From Pain To Pleasure; Our Complete Coverage, Plus: Pearce Takes Charge Of NM GOP 

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.


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.


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.


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.


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.


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.


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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Thursday, December 06, 2018

Battle Over Pearce: Foes Look For Last Minute Longshot Upset To Deny Him Party Chair Position; Meeting This Saturday, Plus: About That Sixth Racino; Do We need It? Where Should It Go? Racing Commission Decides Today 

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.


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. 

Richard is right. There are other cities in contention for the racino but we see Clovis as the most natural location:

Five bidders are competing for the sixth and last New Mexico racino license permitted under tribal compacts. Three of the five bids propose a racino in Clovis; the two other projects are proposed for Tucumcari and Lordsburg. The State Racing Commission is expected to make a decision – which could include opting not to issue a license – on Thursday.

The operators of the current five racinos have written a letter asking the commission to nix the awarding of any license, pointing out what Randles argued:

The decline of the horse breeding industry here and nationally will make it difficult to find animals to race on a sixth track; attendance at live races and those that are simulcast are already falling; and the presence of a sixth track would cannibalize revenue generated by the existing racinos, among other concerns.

They have a point but the proposal from Las Vegas developer Full House Resorts does seem promising. The company is already listed on the NASDAQ so it should be able to secure the necessary capital to make it work. Full House is currently valued at about $78 million. Their proposal for a $200 million racino includes a moving grandstand at the racetrack which is also intriguing. Not that they don't have their problems, as this article examines.

Most important, of all the proposed locations Clovis would finally do what gambling supporters have claimed would happen but hasn't--a Clovis racetrack and casino would attract many of its gamblers from out of state--from Texas. A Clovis racino would actually help end the cannibalization that we are seeing in the NM gaming industry and bring in new players and new money.

Let the Texans come here and drop those taxable dollars and finance the New Mexico jobs and then take their problems home with them. That's what makes Las Vegas such a success--the tourists--and Clovis could be a mini example of that.

It's true that New Mexicans are over gambled with five racinos and a bevy of tribal casinos. There's a good argument to be made that no racino should be authorized by the commission. However, if we're going to do it, a Clovis racino holds out the promise of being the most lucrative by tapping into the hefty piggy banks of those Texans only a few miles from Clovis and who are itching to bring their gambling dollars to New Mexico.


As for the decline of horse racing and the difficulty in finding horses to race, that problem belongs squarely in the laps of the existing racinos that continue to reap millions from the slots, a portion of which is pledged to advance horse breeding and racing in the state. Even though they are not making what they once did, the racinos are still very profitable. And improving the breeding and racing industries was a key reason why the state authorized racinos in the first place. Can't they do better for New Mexico's young horsemen and women? Shouldn't they be doing better?


The racino proposal is attracting a true cast of lobbying characters. Look at the names trying to influence the racing commission to give their clients the deal at today's meeting. From one of the Alligators:

Republicans Darren White, Pat Rogers and Joe Thompson have been working for L&M Entertainment, a joint venture of Laguna Development and an Illinois company that wants to build a casino and track in Clovis area. Former NM House Speaker Raymond Sanchez and former state House Majority Leader Michael Olguin are in with Full House Resorts, which also wants to build in Clovis. Rob Doughty, attorney and Gov. Martinez appointee to the UNM Regents,  is representing Shaun Hubbard, Johnny Cope et al in a third proposal for Clovis racino. Quite a cast of characters, eh?

A real cast of characters indeed. No wonder Netflix is coming to ABQ.


Thanks to the NM Association of Counties for having us to their meeting at the downtown ABQ Hyatt this week to moderate a panel of media aces who provided advice and fielded questions from newly elected county officials from across the state.

From left to right in this photo is KRQE-TV investigative reporter Gabrielle Burkhart; veteran PR man and journalist Gerges Scott of Agenda; your blogger; Rebecca Long, president of the NMAC and a Lea County Commissioner; Melissa Perez, the public information for Sandoval County and crack Santa Fe New Mexican government reporter Andrew Oxford. There was no fake news in that bunch. Fun stuff.

That's it for now kids but we'll be here Saturday to update the results of the race for the NM GOP chairmanship and later today we'll update the blog with whatever the state racing commission decides on that sixth racino.

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Wednesday, December 05, 2018

On The Econ Beat: Market Jitters Prompt Recession Talk; Where Does NM Stand? Plus: Some Economic Drivers And Worries 

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.


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.


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.


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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Tuesday, December 04, 2018

Anxious Progressives Eye Upcoming Session; Big Election Win Vs. Conservative Senate Dems, Plus: Taking A Pass On Pat And Stephanie Speaks  

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. 


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.


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.


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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Monday, December 03, 2018

Will BernCo Benefit From Posting A Blow-Out Win For New Guv? Plus: Silent Stephanie; Land Commissioner-Elect Stirs The Alligators, And: More Political News From Indian Country  

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.


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.


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.


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.


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.


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.


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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Thursday, November 29, 2018

Lujan Secures Top House Post As Udall Preps Senate Re-elect Bid, And: Navajo Gator Reports On And Analyzes Rez Election Outcome  

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.

Fringe candidate Gavin Clarkson, who was the GOP nominee for Secretary of State, is preparing a run which sounds like Mick Rich take two.

If circumstances remain apathetic we could have a repeat of the bust that happened this month in the Senate race that saw Dem Martin Heinrich re-elected. GOP nominee Rich was written off from the start and Libertarian Gary Johnson fizzled faster than a firecracker in a rainstorm. Obviously, Udall, 70, is hoping for something similar as he embarks on a campaign for what could be his final US Senate term.

If pressed, insider R's will throw out the name of Lt. Governor John Sanchez, but unconvincingly. Sanchez's star has faded along with that of Gov. Martinez who once was talked up as a potential Udall foe.

The last competitive Senate race featuring an incumbent was way back in 1994 when Republican Colin McMillan ran unsuccessfully (54-46) against Dem Senator Jeff Bingaman. And the last incumbent Senator to lose their seat was Republican Jack Schmitt back in '82 when Bingaman tripped him up.

On the other hand, when we had an open Senate seat in '08 we had a pretty fair campaign between Udall and GOP nominee Steve Pearce. And when Bingaman retired the match-up for his vacant seat between Heinrich and R  Heather Wilson was a race to watch.

A Senate campaign is a great platform for a vigorous debate over the national scene and the state's role in it, but not so much when the seat is filled with an incumbent. The R's will need to get going if they are going to make a serious try to overturn that history.


The possibility that Udall would not seek another term had the juices flowing among the new generation of Democrats who saw their names prominently mentioned as possible replacements. Now you wonder what will become of them. With Udall seeking re-election and Dem Michelle Lujan Grisham in the governor's chair, there are few higher office options for the trio of Attorney General Hector Balderas, ABQ Mayor Tim Keller and BernCo District Attorney Raul Torrez.

There is one long shot possibility that the trio will watch for--if a Dem president is elected in 2020 there is a chance that Sen. Heinrich could make a play to join their cabinet as Secretary of Interior. If that happened then the Governor would appoint a replacement to fill out his term. Of course, the Governor could appoint herself, again foiling the higher hopes of our stranded trio.


We still have a bit of clean-up to do from the midterm election and we get to it with the able assistance of Navajo Gator, who files this report direct from Indian Country:

Joe: The Navajo Nation is preparing to inaugurate its newest president after a landslide victory by Jonathan Nez, the current vice president. Nez defeated former Navajo President Joe Shirley, 39,783 to 20,146 votes, with about 64 percent voter turnout in Arizona, New Mexico and Utah. This election marks the end of the one-term presidency of Russell Begaye, brother of former NM Rep Ray Begaye, both of Shiprock. 

Nez will be joined by his vice president/running mate Myron Lizer, who is half Navajo and Comanche, a Baptist minister and Republican. There is a cloud of suspicion over the new administration, as President Begaye has charged that his vice president has taken personal travel on the tribal dime, hence calling for an investigation into Nez’s spending.  

Meanwhile, the Navajo Council has some substantial changes, with only 9 councilors winning re-election. There are now two additional women councilors, increasing to three the number of women on the 24 member Navajo Council. It will vote for its new Speaker after the tribal inauguration day January 15, 2019. 

The Navajo Nation has been credited with solidifying a lot of Democratic victories in New Mexico and Arizona, like Governor-elect Lujan-Grisham and Rep Ben Ray Lujan, but most profoundly in its support of Arizona US Senator-elect Kyrsten Sinema and US Rep. Tom O’Halleran. The Navajo electorate also aided the Democratic switch in the NM House race in which Republican State Rep. Sharon Clahchischilliage of Cudeii was defeated by Democrat Anthony Allison of Shiprock.

I hope this is helpful.

Thanks, Navajo Gator. Very helpful and insightful. We cover all the angles around here, and that's why. . . .

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Wednesday, November 28, 2018

Ben Ray Set To Rise To Top Leadership Ranks In US House; Key Meeting Today, Plus: Pearce Doubters Want Him To Nix Any Election Plans Before Taking GOP Chair Slot  

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.


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.


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.


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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Tuesday, November 27, 2018

Dr. No Joins Yes Crowd On Budget Surplus; Says $1.5 Billion Extra Is "In Ballpark", Plus: State Senate 2020: Early Foe Surfaces For GOP Senator In ABQ Swing Seat  

Recent volatility has the worry warts fretting over the price of oil and what that could mean for the big projected state budget surplus. However, "Dr. No" is not among them.

In fact, Dr. No, aka, conservative Senate Finance Committee Chairman John Arthur Smith, is with the yes crowd and predicting that when lawmakers gather for a sixty day session in Santa Fe come January they should have at least an extra $1.5 billion on the table. That's up 25 percent from from the $1.2 billion that the state has been projecting:

"We’ve been anticipating $1.2 billion in new money for next year, but we could get another shot in the arm from next month’s lease sale,” Smith said. “I’m guessing it could generate $250 million more for New Mexico, putting us near the $1.5 billion ball park.”

Dem House Speaker Brian Egolf told us last month the surplus would total anywhere from $1.4 billion to $2 billion, a mammoth increase, considering the entire current General Fund budget is about $6.3 billion.

Dr. No could still be on the low side, but regardless of where the surplus ends up the argument will be the same: How much of that cash can be spent on budget items that will "recur" each year. For example, public school spending such as teacher pay hikes or adding state employees.

While the austerity hawks want much of the surplus to go for only one time spending, what if they're overly cautious and the budget surpluses accumulate at these levels for four years or more? What is the plan then? You can't put that kind of money away for a rainy day unless you think you're going to get a storm that would sink Noah's Ark. Surely that's something for the Governor-elect and her new budget team to think about.


Alan Hall
It's not too early for prospective hopefuls to be eyeing the 2020 races for state Senate.

Our speculation that GOP senators in the ABQ metro could be vulnerable because of the blue wave that washed through the area this year has already surfaced a Dem challenger to one of those R's. He's Alan Hall, an attorney with the Rodey law firm:

Joe, you speculated about the 2020 re-election prospects of Republican state senators in the Albuquerque area. I am going to run for the District 10 seat, currently held by Republican Senator Candace Gould. I am ready to invest a fair amount of money, and a great deal of time.

Hall, 65, practices in the areas of municipal bonds and general corporate work. He's been practicing in in the state for nearly 30 years.

His quest to unseat Sen. Gould, 60, who was elected to her first term in 2016, is no pipe dream. Look how close her contest was with Democrat David Simon in the swing district that takes in a  chunk of the liberal ABQ North Valley and extends into the city of Rio Rancho:

Gould 50.92% 10,530
Simon 49.08% 10,151

Sen. Gould
Sen. Gould, the executive director of the Heart Gallery of NM which helps foster children, is married to lobbyist Leland Gould, 62, whose chief client is Andeavor, parent company of Western Refining. The company makes generous donations to legislators.

In 2013, the Goulds made the blog news when they hosted a high dollar New Year's Eve party for Governor Martinez. They have remained close to her political machine, although with the Dems taking over the lobbying corp is sure to be more cozy with them.

It wouldn't take much of a blue wave for Gould to be ousted. If Trump is the presidential nominee and the metro remains negative on him, that alone could be enough.

Gould is not known as a hard right conservative but she is conservative nonetheless. Will she (and the other metro GOP senators) soften some now that attorney Hall has put his picture in the window and other Dems may be waiting in the wings?

We'll be watching.

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Monday, November 26, 2018

One Year Of Mayor Keller; How's He Doing? Perspective Offered And Grades Assigned  

One Year Ago
ABQ Mayor Tim Keller marks his first year in office this Saturday. So how's he doing? Down at the Alligator pond where they keep a close eye on all things La Politica the fresh-faced, energetic 41 year old earns a grade in the B to B+ range. Here's how it shapes up, starting with the positives:

--Unfortunately the crime wave rolls on but Keller and APD have stabilized it somewhat. Sure, it's hard to see how crime could have soared any higher as the city already ranked at or near the top of the nation in the stats, but stabilizing the rate is an important first step.

--Like it or not, Keller pushed through the city council a tax increase that is bringing in $50 million a year or more to city coffers with most of it pledged to the crime fight, including hiring more cops. That tax will be crucial to any future success he has on the crime front and which will ultimately determine his political fate.

--APD is making incremental progress as it operates under the Justice Department consent decree. Gone are the days under Mayor Berry when he and his minions brazenly thwarted implementation of the decree.

--On the economic front Keller had a big catch with Netflix. It announced a ten year, $1 billion investment here in film production. His administration doesn't get all the credit but it gets enough. In one fell swoop the talk of a profitable "creative economy" became a reality with the Netflix deal. Weeks later, however, government contractor Honeywell Aerospace announced it was pulling up its ABQ stakes and laying off hundreds, again revealing the fragility of the city's economy.

--Changing the psychology of the city after the failed eight years of Republican Mayor Richard Berry was essential if ABQ was to look more hopefully at the future. Keller, a peripatetic politician who loves the camera, has been accused of showboating but his cheerleading has the city thinking more positively about itself,  an important aspect of executive leadership. His One ABQ campaign has been criticized as trite and political sloganeering, but this past decade the city has been severely fractured both economically and socially. From that perspective and as the city continues to grow even more ethnically diverse, the One ABQ pitch resonates.

--ART. There are positives and negatives to how Keller has handled the ignominious, scandal-ridden transit plan. The most bungled public works project in city history was left on his desk by Mayor Richard Berry like a rancid sandwich. He is now embroiled in a high-risk legal tempest with the providers of the electric buses for the project. ART could still cause Keller to stumble, but his first foray at trying to make sense of the mess have been, well, sensible. This is truly a no-win situation and containing the damage is the best that can be expected.


So why doesn't  Keller get an A or A plus from those Alligators watching over their fair city? Well, perhaps he will get there in the years ahead but in the first year. . .

--Keller and APD still have major issues. Early in his term he and his police chief mishandled a high profile case of a sexually abused 7 year old girl and appeared to be attempting a cover up of APD incompetence. That Keller was buying into the culture that brought down the department was startling. And it was one of several instances that raised issues about his dedication to transparency. (He walked back his support of the policing in the case of the 7 year old).

--That tax hike the Mayor engineered worries the Gators as they look at the still off-the-charts overtime that many at APD are receiving. The administration will argue it's because of the cop shortage but a cop doing PR and pulling down close to $200,000 a year is a major optics issue and raises the question of whether Keller will efficiently spend the hundreds of millions in new tax money. And does he have command and control of APD or do they have it of him?

---Keller's APD pay package to resolve the cop shortage is attracting officers from Rio Rancho and other area cities. Does that undermine the overall safety of the metro? And will those officers have a strong commitment to APD cultural change that first time officers would? Critics argue it was the hiring of "laterals" from other police departments  that caused much of the problem we had with fatal police shootings that forced the Justice Department to come in here and that has cost the city tens of millions in lawsuit settlements.

--While crime has leveled off in some categories, ABQ remains a very violent city. Murders continue to hold at or near record levels and citizens continue to complain of repeat burglaries at their businesses and homes. Complaints are also heard that the city/county jail, once overcrowded, is now too empty. Keller and APD Chief Geier remain vulnerable to the "not tough enough" on crime message.

--The Topgolf veto. Keller's veto of subsidies for this project was unanimously overridden by the City Council. His boots in cement approach didn't do him any favors and cost him political capital. But his relationship with council has been a bit better since that fiasco. Write it off to a rookie mistake?


Mayor Keller faces a city with a soft underbelly of crime, violence, poverty and drugs that continues to hinder economic development and encourages the city's best and brightest to head for the state line. These are the same problems that bedeviled the previous administration but were left to fester and worsen.

The city ached for change and a new face when it elected Keller in a landslide last November. His first year put to rest concern that he would be overwhelmed by the job as he demonstrated a basic and sometimes elevated competence. He and the city he leads still face a long road ahead in remaking ABQ into a more economically vibrant and safer place but he has taken the first steps of the journey.

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