Sen. Sanchez
We went for enchiladas and chicharrones on a recent trek to the Barelas Coffee House in the ABQ South Valley, but we were also served up a plate full of news. We were scoping out recent political developments with a Senior Alligator and in walks State Senate Majority Leader Michael Sanchez, a key player at the center of the financial maelstrom roiling the state's political waters. We flagged him down and brought him by the table for a briefing. We didn't offer him any of our chicharrones, but we probably should have as he offered some provocative analysis that was every bit as tasty as the pork morsels and red chile.

First, Sanchez confirms what most suspect--tax increase proposals are an inevitable centerpiece of the January legislative session where a budget shortfall of upwards of $1 billion will confront lawmakers. He told us "sin taxes"--those on booze and cigarettes will be in the spotlight as lawmakers look for "revenue enhancements" to solve the historic deficit. We did not go into detail, but we also got the vibe that a rollback of the 2003 personal income tax cut for the wealthiest NM taxpayers will also be on Sanchez's list of things to do.

We are still about 11 weeks away from the Jan. 19 session, but the Belen leader also had some specifics on the spending side. He said millions in outstanding state contracts are in for legislative scrutiny. We did not put the trial lawyer on the spot and ask if that included legal contracts. There's a lot of money to be found there.

Sanchez also fired a shot across the bow of the myriad state boards and commissions. Many have highly paid executive directors and well-paid staffs, but their necessity in a time of economic angst is open to question. He says he wants to take a look. We can already see the long line of commission protectors forming outside his door.

BOMBSHELL DROPPED

Then there was the bombshell Sanchez dropped that had us choking on the chichrarrones. He said he is studying the possibility of offering a constitutional amendment that would permit the Legislature to take $2 billion directly fronm the state's Land Grant Permanent Fund to deal with the fiscal emergency which he says is going to last several years. "We could use that money to get over the hump. This is not just going to last another year or so."

After clearing our clogged throats, we analyzed that stunner with Sanchez, who agreed that such a proposal would have long odds of passing. First, it would take a majority vote of the Legislature to get it on the ballot, then win approval from voters and quite possibly an act of Congress. It was Congress that nearly a hundred years ago made possible the transfer of federal lands to New Mexico that annually generate millions that we stash away in the permanent fund.

We take a certain percentage out of that fund each year--valued as of June 30 at about $8 billion--to fund mainly education (over $435 million in fiscal 2007) , but we aren't allowed to take huge lump sums out--and for good reason. The politicians could spend those billions in a blink and the state would be left panhandling for tortillas.

Many states have burned through similar funds established in the early part of the last century and have lived to regret it. But Sanchez argued the founders established the permanent pool of money as a "rainy day fund" and "it is now raining."

INSIDE THE BOMB

Sanchez did not make this case, but there are some who say the permanent fund has been allowed to grow too large. That the billions need to be drawn down to meet the very real human needs of a state that ranks last or near last in most key quality of life measures. We also have a severance tax permanent fund which was valued at about $3.2 billion as the end of June. That gives us about $11.8 billion, but we've been at $14 billion when the stock market was roaring. (There was also improvement in the funds in July quarter.)

But this is a state that has struggled to build a private economy that could generate the tax receipts necessary to replace the money generated from oil and gas royalties and grazing rights. That is the money fed into the permanent funds. If we start drawing down those funds with huge withdrawals, it is argued we will be even worse off in future years, not better.

In 2003, voters passed a constitutional amendment that refigured the way we take money out of the permanent funds, allowing us to tap them for more. We proposed something similar to Sanchez as a possible compromise. Rather than taking a huge fist full of cash now that could seriously deplete the funds available for future years, maybe we ask votes to temporarily approve an increase in how much we can take out for the next five years.

Sanchez is no doubt feeling heat from the Democratic Party's powerful interest groups--teachers, labor unions and state workers--and his proposal to have us write a $2 billion check from our state's savings account could be seen as pacifying those groups. Realisticallys is a long-odds plan. Still, that the Senate leader would even throw it onto our crowded luncheon table for consideration shows just how financially parched we are.

BILL'S OPTIONS

The most pressing budget matter before us is whether Big Bill will veto the Legislature's budget fix that calls on him to trim state agency budgets under his control by 7.6 percent. He is balking, and as we have blogged, has orchestrated doom and gloom scenarios to gather public support against the cuts. But insiders are now pointing to a scenario where Richardson will indeed cut those agency budgets but still cast a veto. They say he could reject the 7.6 percent cut by casting a veto, but issue an executive order calling for cuts of 3.5 percent or about $43 million, the amount he asked the Legislature to cut. He has until November 12 to make up his mind. The cuts are for the current budget year which ends June 30.

WHICH IS IT?

ABQ Journal reporter Dan Boyd says the state budget has grown 40 percent under Big Bill; reporter Thom Cole says it is 50 percent and the Journal editorial pages go with "more than 50 percent." Which is it? We're going with the 50 percent since the state budget was about $4 billion when Bill came in and went to $6 billion. That has been chopped to $5.5 billion and headed lower as we speak. By the time this epic bear market is finished and the federal stimulus dries up, we wouldn't be surprised to see the state budget back near that $4 billion level.

HE'S OUT
Cris Sanchez
It was the week from hell for Cris Sanchez. The retired Bernalillo County Sheriff's lieutenant started the week as one of the favorites to replace Sheriff Darren White who is resigning to become ABQ's public safety director. But Cris's school teacher daughter, 33 year old Kristy Sanchez-Trujillo, burst into the headlines as the focus of a sensational sex scandal. She admitted to having sex with a 13 year old student. That prompted this withdrawal statement that Sanchez emailed in:

Effective today I am withdrawing my name from consideration for the appointment to Sheriff for Bernalillo County. For over twenty three years I placed a priority on public safety. Right now is a time where I must commit myself to the immediate needs of my family. I ask that the media respect the privacy of my family during this time.

The five member Bernalillo County Commission--three Dems and two R's--will name a replacement to fill out White's term which expires at the end of 2010. ABQ Police commander Conrad Candelaria has been cited as another favorite by insiders. It shows. He is now being attacked in various emails circulating.

Sanchez was thought to have the support of Commissioner De La Cruz, so his withdrawal from consideration shakes this thing up. White says he will not resign until November 30, which means the commission may meet that day to name his replacement.

DARREN AND SUSANA

Speaking of White, he is apparently not shying away from politics, even as he prepares to join the administration of fellow Republican and Mayor-elect RJ Berry. Republican Guv candidate Susana Martinez uses this quote from White in a recent fund-raising letter:

Susana Martinez is a strong leader with rock-solid convictions. There’s no tougher prosecutor in the state and she has a real record holding corrupt public officials accountable...

Now that's not an outright endorsement in the four way fight for the GOP Guv nomination, but White's name is out there on Martinez letter head.

White is a longtime support of former ABQ GOP Congresswoman Heather Wilson who announced last she will not seek the GOP Guv nomination. Wilson has not said if she will make a primary endorsement, but it would be highly unusual.

EICHENBERG UNLOADS
Sen. Eichenberg
New Dem State Senator Tim Eichenberg had some big ideas for a freshman--he was going to seek the 2010 Dem lieutenant governor nomination, but dropped out after mulling it over and talking to presumed Dem Guv nominee Diane Denish. But Eichenberg is not too happy about how things turned out. He showed up at a Saturday morning meeting hosted by GOP Guv candidate Janice Arnold-Jones and unloaded on Di, saying she can't win the Guv's race.

Blogger Mark Bralley was at the meeting and quoted Eichenberg as saying that because of Denish's “complacency or complicity with the ‘pay-to-play’” atmosphere surrounding Governor Bill Richardson, and standing quietly behind him, Eichenberg was unwilling to invest a half million dollars in a losing campaign. "I looked her square in the eye when I said that. I told her I didn’t think she was going to win."

Tim's Senate district overlaps with Janice's House district. He ousted incumbent GOP Senator Diane Snyder to take the seat in 2008. Eichenberg would have been the only Anglo in the all-Hispanic Dem guv field and if he managed to win, it would have been a disaster for Denish who needs a Hispanic on the ticket for traditional ethnic balance. Eichenberg obviously felt the heat and got out. As for his plans to invest $500,000 in the light guv race, we'll have to check with Mrs. Eichenberg to nail that one down.

RULES OF THE GAME

Some city employees loyal to outgoing ABQ Mayor Marty Chavez are scurrying to find safe harbor as new GOP Mayor-elect Berry prepares to take office. We found this newspaper update useful on the rules of the game:

Some department heads and other "at will" executives have a right to stick around, though not necessarily in a top job. City rules say that an employee who has spent 10 years in a "classified," or protected, job has a right to return to such a job — even if they've been promoted into an at-will position. Acting Parks Director Jay Evans, for example, moved back into a classified job this month in the Open Space Division. He took a pay cut from about $103,000 a year to about $76,000 a year.

Safe hiding, all you Chavezistas.

COME FLY WITH ME

Some follow-up on our blog about the ABQ Journal complaining that it has been blocked from tracking the flights of the state-owned jet for "security" reasons. A reader says that doesn't mean the paper can't find out who is flying where:

Although flight information is blocked, the state jet's travels would become public record after the fact through inspection of public records requests, wouldn't they?

We suppose they would, But it raises an interesting question. For example, if the press calls a cabinet secretary and asks where they plan on driving their state-owned car that day, is that public information?

On that plane blog, a reader complained that you can't track flight info for the ABQ Journal jet which raised the issue of the jet flights. That comparison did not wash for several readers, including this one:

Joe, Regarding those who want to know where the state jet is heading. They need to ask for a log of where it has been to date. That way Big Bill's security will not be at risk. This should be open information. Also, I could give a rats-ass where the Journal flies its airplane, or for that matter what type of airplane they own. Someone is doing a major stretch when it comes to comparing a state owned jet paid with taxpayer dollars and a jet owned by a private company....

THE BOTTOM LINES