Senator-elect Brown
The Bay State Bombshell sent political shrapnel flying coast to coast last night and some of it struck the Sweeney Convention Center near downtown Santa Fe where the elite of the state Democratic Party was gathered for its annual legislative dinner marking the opening day of the 2010 session. Taking the podium as news spread of the Dem Senate loss in Massachusetts, Lieutenant Governor Diane Denish, the all but certain Dem nominee for Governor, took an unexpected and some argued a panicky strike at Pete Domenici Jr., the latest and biggest name entrant in the five way race for the GOP Guv nomination.

Denish did not mention the 50 year old ABQ lawyer by name but there was no mystery that she was shooting at the son of the legendary ex-US Senator Pete Domenici. Declared Di:

We can't afford a Governor who has a name but no ideas or priorities!

Forgive us if a word or two of that quote is out of place. We were in the back of the center getting sleepy and ready to count some sheep when Di dropped her jaw dropper.

Di's words, uttered only moments after Scott Brown's stunning US Senate upset over Dem Martha Coakley, soon became evident to Blackberry watching Dems and set off breathless analysis among Alligators of every stripe attending the confab. And with good reason.

When she singled out Domenici, Denish was predicting him as the eventual winner of the GOP nomination and her general election foe. And she also may have been signaling that her camp was stunned by the landslide Brown scored with independent voters. She may have felt the need to respond because the indys also hold the keys to the Governor's office here. Last night's Massachusetts Miracle for the first time called into question the comfort level enjoyed by the Denish camp.

DIVINING DI

One veteran state Senator chastised Denish for singling out Domenici.

She should just let the Republicans fight it out among themselves. He is not necessarily their nominee and it only helps him when she goes after him. I think there was a bit of panic there...

But others said the Massachusetts results were so consequential that Denish had no choice but to start to frame the race. Another Senator warned that Domenici Jr. is the most likely to raise big money because of the Brown US Senate win.

"His father (former US Senator Pete Domenici) can work the phones for him. Republican money across the nation is going to loosen up and it is going to find its way into our Governor's race," said the Senator.

Denish has $2.5 million in the bank, but if a national GOP feeding frenzy develops that amount could look like spare change.

NM AND THE WHITE HOUSE

The Brown victory was a body blow to the White House political operation. More of my Alligators were on the attack last night, saying if Governor Richardson had been given a job by Obama, making Denish Governor by appointment, then the dangerous trend that seems to be developing for Dems and perhaps Denish would have been softened here. They were again urging Obama to get Richardson out of here and give Denish the advantage of the incumbency or else risk giving the Guv's office to the R's this year and the state's five presidential electoral votes to the GOP in 2012.

HER FIRST INSTINCT

Denish's first instinct in the wake of the East Coast Democratic debacle seemed to be to veer right to curry favor with those jumpy independents. She issued this statement to mark the opening day of the 30 day legislative session:

...The primary focus this legislative session must be to create an economic environment that fosters new jobs, new opportunities and sound fiscal policies. That means balancing the budget--not on the backs of regular families--but by making government smaller and more efficient.

Instead of debating which tax increase to embrace, legislators must focus their attention on which reform measures to implement...Major reform proposals must be debated and passed long before the legislature gives any consideration to raising taxes on regular families.

But progressive Dems are arguing if Denish caters too much to the right it will make her appear more vulnerable, not strong, and dampen enthusiasm for her among the liberal base. Fortunately for Di, she faces no primary opponent.But for now the promise of a mundane Governor's race is gone. R's are justifiably energized.

REPUBLICAN ROAR

While we supped with the elite of the New Mexican Democratic establishment, our Republican Alligators were feeding us appetizing developments about that now even more important race for the GOP nod for Governor. They report that some top Republicans are now quietly moving to persuade Dona Ana County District Attorney Susana Martinez to drop her Guv bid and run for attorney general. This follows talk of similar discussions to have R Guv hopeful Janice Arnold-Jones also step aside ad run for secretary of state. Allen Weh and Doug Turner round out the GOP field. The R's still have no candidates for the down ballot races.

But clearing the field for Pete Jr. may be easier said than done. His somewhat lethargic maiden speech Sunday did not send waves of excitement pulsating through Republican ranks. And there is still resentment that his famous father is trying to crown his son. However, the Massachusetts upset may overcome those objections. Certainly Diane Denish seems to think so, even if it is questionable whether she should be saying so quite so loudly.

OPENING DAY

Big Bill acknowledged the elephant in the room when he gave his final State-of-the-State speech as New Mexico's chief executive, but he quickly shunted it aside in favor of a long trip down nostalgia road, recounting a litany of his accomplishments. The dire straits of the state's finances seemed to demand more attention than Bill was willing to give them, but Richardson, the original "can-do" Governor, doesn't relish taking about what can't be done, which, in the end, will be the fate of this 30 day legislative session. (Speech transcript here. Complete video here.)

At under 35 minutes, it was, as promised, Bill's shortest state-of-the-state. Applause didn't eat up much of the clock either because there was little to applaud as the 26th man to hold the governorship since statehood spoke of the worse economic downturn in our lifetimes.

Richardson's middle of the road approach--cut spending and raise some taxes temporarily--reflects the consensus thinking in the New Mexican electorate as well as the intellectual classes, but the devil is in the details. Out here in the peanut gallery, we want permanent cuts that shore up state finances not just for a year, but for many years and we want those cuts written in stone before we accept the new taxes that we realize are necessary to provide services to one of the most impoverished populations in America.

GOOD OL' ANALYSIS

Former State Senate President Pro Tem Richard Romero, reflecting current thinking, told public television he senses that the major tax increase we are looking at is on the gross receipts levy. A quarter cent boost would take in $100 million of the $200 million in annual taxes that the Guv and key lawmakers want. Romero said he is counting Senate noses and it looks tight.

In his speech, Richardson, to the disappointment of the ABQ Chamber of Commerce, put the nail in the coffin to reinstating the gross receipts tax on food, which was already dead in the House. However, he offered precious little else in the way of guidance on what taxes should be raised. The self-described "tax-cutting" Governor is more than happy to leave the public aspect of that bloody battle to lawmakers. Alas, he repeated to the point of ad nauseum, his insistence that his 2003 tax cuts for the wealthy not be touched, nor his sacred cow tax incentives.

And there was little acknowledgement of the systemic problems facing the New Mexican economy. In Bill's world this is a garden variety economic recession that will soon vanish, leaving in its wake the seeds of plenitude he has planted. (He did say that the state must break its dependence on oil and gas revenues as a major source of state funding, but he did not say how.)

NO BOUNCY BILL

Richardson was less bouncy than in past state-of-the-state stemwinders. He says he is not a lame-duck, but it is clear he is operating more on automatic pilot than ever before. He has to be somewhat exhausted after seven years which have included a run for president, constant fights with the Legislature, ongoing play-to-pay investigations and now an economy that is softer than a soggy sopapilla.

While this Governor was willing to hog it all during good times, advancing an ambitious and often productive agenda and taking full credit for it, he now looks for power sharing and reconciliation in the bad times. He half-joked:

There have been times where we have stood far apart--when we stood behind bully pulpits pointing fingers, instead of sitting side-by-side at the table solving problems. I may have even been wrong, once or twice.

This Governor and Legislature have aggravated citizens, overreaching in the boom years on spending, giving overly generous tax cuts to the well-off, taking a head in the sand approach to ethics; refusing to cut administrative bloat that permeates the entire body politic; failing to reform an educational system that has made economic advancement that much more difficult and offering incentives to create jobs that are tilted too much toward capital at the expense of labor.

Despite this Richardson seemed to capture--if not the prevailing mood--at least the prevailing hope among the average citizen--when he neared the end of his speech and quoted former Governor Bruce King who died this past November:

When asked what his legacy would be, he said “I guess just getting New Mexico to realize that if we were going to be successful, we were going to all work together and be one large family.” I believe in this time of need, if we are to succeed, we must work together, maybe even as a family.

THE R'S RESPOND
Rep. Gardner
Richardson wasn't the only one who seemed somewhat detached from the reality of the New Mexican economic dilemma. Take a look at this reaction to the Guv's speech from House GOP Whip Keith Gardner:

Let’s remember that our state’s budget is not in bad shape because of the economy, it is in bad shape because of reckless overspending. By making smart choices and exercising proper restraint we can put our state’s budget back on track..

Say what, Keith? The state has lost over 40,000 jobs in the past year; the oil and gas industry has been in a bear market; commercial real estate in he ABQ area is in a depression; job creation is at a standstill; the unemployment rate when you include the underemployed and those who have given up looking for work is well over 11 percent; housing values have crashed and consumer and commercial credit is as tight as a vise.

Gardner's concern about overspending is grounded in reality, but the incredible shrinking New Mexican economy is a chief cause of the budget collapse as it generates less and less revenue.

And Keith may have been distracted, but in his opening day speech the Governor reminded everyone that he has cut taxes over $1 billion in his seven years on the job. Republicans voted overwhelmingly in favor of Richardson's budgets and his tax cuts, another part of the equation that adds up to a budget shortfall of at least $500 million and possibly quite more.

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(c)NM POLITICS WITH JOE MONAHAN 2009
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