Wednesday, August 12, 2009
Bill Says Do It In A Day; Special Budget Session On Way, Plus: US Attorney Scandal Has Wilson Scurrying, And: New State License Plate: A Keeper?
It appears the Governor will look to the state's cash reserves to plug a gargantuan hole blown in the state's budget by the Great Recession, plunging oil and gas prices, and, some say, too much spending by Bill and the Legislature during the Great Boom.
The state has reserves of about $600 million. The budget shortfall for the budget year that started July 1st could go toward $500 million when official estimates are announced Friday. State Senator John Arthur Smith told the AP he would not be surprised if the shortfall hit $450 million. Our insiders said as much last week.
In announcing a working group of bipartisan legislators to solve the budget dilemma, Bill said he would call a one day special session--likely for October--and no subjects other than the budget shortfall will be allowed on the table. He wants a deal cut before the gavel bangs the 112 solons to order. Without a pre-cut deal, there's risk of a bloody brawl. The state money pie shrinks and the hunger pangs grow louder.
The Governor specifically took note of the state's "healthy" cash reserves in making the special announcement, signaling that to avoid employee layoffs he will accept cash reserves that are less than 10 percent of the state's budget. They used to be at around 5 percent. Going back to that level won't kill us. The problem is long term. We also face a shortfall for the budget year that starts July 1, 2010. And with little reserves to cover it. But first things first.
Bill also moved to take tax increases off the table saying the 2003 tax cuts for high income taxpayers should not be repealed because that would hurt efforts to attract business here. That may be questionable, but raising any taxes right now is going to be difficult--even for the rich.
Spending more than half the reserve--$300 million--to cover the shortfall will also draw fire. Even with reserve spending, there will still have to be budget cuts, and it will be interesting to see how the Legislature gets there without getting into personnel costs. How about a hiring freeze without all the thawed out patches for political appointees?
Richardson said the giant budget shortfall is directly related to the national recession, but state spending has grown 40 percent since he took office in 2003. There was and is one whopper of an economic downturn, but before it there was a hell of a spending party going on in Santa Fe. The hangover is here.
PUSHING ON THE SPECIAL
Bill is not going to get unanimity on his argument that no taxes need to be raised to solve the budget woes. We do think he will prevail, but NM Voices for Children is first out of the gate to try to make popular an unpopular plea:
Closing tax loopholes that benefit only profitable out-of-state corporations and rolling back some of the personal income tax cuts for the highest wage earners would have little effect on average New Mexicans. The state and federal income and capital gains tax cuts of 2003, which went disproportionately to the very wealthy, did little to help the economy.
That corporate tax loophole lets giant companies like Wal-Mart and Best Buy escape some taxes on their NM profits. Would closing it cause corporations not to locate here? They are already here.
MORE US ATTORNEY SCANDAL
Former ABQ GOP Congresswoman Heather Wilson is coming with heavy cover in reacting to the latest developments in the US Attorney scandal, as speculation intensifies about whether she will seek the 2010 GOP Guv nomination. The House Judiciary Committee dumped over 5,000 pages of documents Tuesday, concluding its investigation. Committee Chair John Conyers says the firing of NM US Attorney David Iglesias was especially galling:
"Under the Bush regime, honest and well-performing US Attorneys were fired for petty patronage, political horse trading and, in the most egregious case of political abuse of the US Attorney corps--that of (NM) US Attorney Iglesias--because he refused to use his office to help Republicans win elections," Conyers said. "When Mr. Iglesias said his firing was a 'political fragging,' he was right."
The Washington Post reported that according to e-mails and interviews with people familiar with the investigation, GOP figures in New Mexico believed that if Iglesias pursued public corruption cases against Democrats, it could have helped Wilson in her run for reelection (against Dem Patricia Madrid in 2006).
So what's next? As the Politco reported:
Conyers said he has sent the material to a special prosecutor, who is investigating the firings on behalf of the Justice Department.
We haven't heard much about that federal probe, but the lawyer for Steve Bell, the former chief of staff to Senator Domenici who accepted a reprimand from the Senate Ethics Committee for his role in the scandal, confirms that Bell has been a witness, but is not a target of the federal grand jury. It is meeting over the firing of Igleisas and other US Attorneys.
We've been talking a lot about the federal grand jury probe into Big Bill's administration and whether there will be any pay-to-play indictments. But we should probably add to our grand jury watch list the US Attorney probe and how that could impact Wilson going forward. One of our Legal Beagles reports that Special Prosecutor Nora Dannehy is close to wrapping up the probe. Will there be indictments? Will the US Attorney scandal keep Wilson out of the Guv race?
The TPM blog has extensive--and we mean extensive--coverage of the latest on all this. And here is the link to all the documents released by the Judiciary panel.
The document dump released Tuesday raises the question of whether then-Attorney General Madrid was being investigated by the FBI in 2006. Madrid said she had no knowledge of any official probe, but Heather Wilson said she was contacted by the FBI in June 2006 about Madrid's involvement with a political action committee called Justice for America. US Attorney Iglesias said he was never pressured to go after Madrid. Anyone in politics is going to raise eyebrows when they read this statement from Heather:
I was aware that the FBI was making inquiries about Mrs. Madrid in 2006 because the FBI asked for my help at the time. While making the matter public at that time would almost certainly have benefited me politically, doing so could have interfered with the work of the FBI. I chose to remain silent unless asked.
Can't the FBI clear this up? The issue is several years old and there is no active investigation. It would be helpful to know what the official record says.
NOT RELATED AND NO BOOTS
Elizabeth Martin, the executive assistant to Public Regulation Commissioner Sandy Jones, is not related to Attorney General Gary King. We went with the info Tuesday from one our Alligators because we knew the maiden name of Alice King was indeed Martin. We should have double checked. Elizabeth Martin, according to the AG's office and several readers, is not related to Gary King. We regret the error and apologize to Gary and Elizabeth Martin. We will administer to ourselves the traditional ten lashes with the wet noodle. The offending Alligator is banned from the blog for a period yet to be determined.
The newspaper reported Tuesday:
PRC Chairman Sandy Jones reinstated his executive assistant, a twice-convicted felon whose hiring has come under question by a former commissioner.
Meanwhile, because of constant commissioner problems, the issue of appointing, rather than electing the five member panel has arisen yet again.
STOP THE PARTY?
Senate Majority Leader Harry Reid will be taking note of some good political news as he holds a re-election fundraiser in ABQ today. GOP US Rep. Dean Heller has passed on a challenge to Reid. The R's say Reid's numbers are so weak any credible Republican challenger will give the senate leader a hard time, but Heller was their top choice. The fundraiser for Reid today is sponsored by NM Dem Senators Udall and Bingaman. It goes for $500 a head, but with no Heller running do ticket buyers get a discount?
UNM: BLOAT OR NOT BLOAT?
We again had our say on the salaries of the UNM President David Schmidly and chief operating office David Harris on our Monday blog. We said together they take down over a million a year. Not quite, retorts UNM spokeswoman Susan McKinsey:
(UNM President) David Schmidly's base salary is $387,600 and he gets $120,000 in deferred comp. That is $507,600, not nearly the $600,000 you reference. David Harris' base salary is $293,500 and he gets $75,000 in deferred comp. That is $368,500, again not nearly the numbers you quote. As for the UNLV President, we went to the Chronicle of Higher Education website and found the total compensation for the previous president, David B. Ashley, not including car and house allowance, was $431,316. I don't imagine the new president took a drastic pay cut. University presidents in Nevada are paid with public and private funds and also get retirement and expense accounts...totals not reflected in the news story you referenced.
We appreciate the precise UNM figures which have moved around in media reports we have seen. But we will continue to argue to members of the Legislature that these UNM salaries are out of line for a state our size, especially one that faces a fiscal crisis requiring a special legislative session and perhaps in future months the layoffs of much lower paid employees. In fact, in our view hundreds of state employees--not only at UNM--are being paid far beyond what they should--a result of out of whack salary increases of the past few years.
NEW PLATE: A KEEPER?
Sometimes change is good, and in the case of the license plate rolled out to celebrate New Mexico's 2012 centennial, change can be great. We see a real "wow" factor to the design and especially the colors. That's why we'll be voting on this state Web site to make the special plate the permanent New Mexico license plate. That means phasing out the beloved yellow plates that have for many years symbolized the Land of Enchantment.
We should ask our political analysts how they project the vote going on changing the state plate. But this new design is a stand-out and we dig the "retro" look. If anything is going to get Mr. & Mrs. New Mexico to make the switch, this is it.
Big Bill is not yet taking sides on this decision that for some will be as controversial as reforming health care:
Governor Richardson said because many New Mexicans have a nostalgic attachment to the classic yellow plate...he wants public input about whether to keep that plate...The Governor is asking the public whether the state should only issue the new turquoise plate; or whether the state should give drivers the option to choose between the turquoise centennial plate and the classic yellow plate. New Mexicans can choose either option in an online survey at www.NewMexico100.net. The online survey will last through Sept. 11...
The survey results are not binding on state officials who plan on making the change, but apparently will ditch the plan if public opposition is overwhelming.
Here's some background on this new plate that could be our state's calling card from coast-to- coast in the not too distant future:
The new plate incorporates a “retro” design based on license plates of the past. Against a turquoise background, a nod to our state gemstone, it follows law and custom by including the red and yellow colors that the Spanish brought with them to the New World, and the proud symbol on our state flag--the Zia. The Centennial plate will replace what has become known as the balloon plate, which was first introduced in 1999. After commemoration activities end in 2012, the phrase, “Centennial 1912-2012” will be replaced and the turquoise plate will continue to serve as the official state plate.
So here's that link again where you can cast your vote. And here's a site that shows all the license plates issued since statehood. You may be surprised by the range of colors and designs NM drivers have enjoyed.
By the way, David Rohr, creative director for the Department of Cultural Affairs, designed the centennial plate. Nice job, Dave.
E-mail your news tips and comments.
(c)NM POLITICS WITH JOE MONAHAN 2009
Not for reproduction without permission of the author