Let's end this hot August week by checking in on the latest congressional action...

Jon Barela, the 2010 ABQ GOP congressional candidate and current state economic development director, comes with this endorsement for 2012 ABQ GOP congressional hopeful Janice Arnold-Jones:

The challenges for job creation in New Mexico stem from the out-of-control spending in Washington coupled with uncertain taxes and burdensome taxes imposed on job creators. We need leaders in Washington who understand these challenges, and have the experience and integrity to overcome them.

So the jobless recovery in New Mexico is all Washington's fault, even as every western state that surrounds us experience job gains? Geez, glad to have that cleared up, Jon.

IS HE EXTREME?

NM GOP US Senate candidate Heather Wilson is also blaming our state's economic woes on Washington, and more specifically placing that blame on the shoulders of her Dem foe and Senate front-runner Martin Heinrich. In her latest attack ad Heather tries again to bring Heinrich down from his perch--this time for his vote against the keystone pipeline, saying "extremists like Heinrich stand in the way while New Mexico leads the nation in job losses...Heinrich puts his left-wing politics first before creating jobs. That's too extreme for New Mexico.."

You gotta give Heather's producers credit. They are doing all they can with the thin gruel they are working with. Wilson's opposition research on Heinrich has yet to come with something that would really make average voters think Heinrich is "extreme." As we've said before, no doubt the focus groups show this line of attack can deliver rewards--if you have strong evidence. Wilson does not--at least not yet.

All the negative ads should, however, keep Heinrich in place--just below the magic 50% level. His own campaign is refusing to engage Wilson in the TV wars. He is not responding to the negative ads paid for her by her campaign, What he is doing is getting cutesy in his latest TV effort. The ABQ congressman says he has five reasons why he "has not gone Washington," including the fact that he comes home nearly every weekend and that he sleeps on a camping mat on his office, foregoing a Washington apartment.

The producers actually show the mat, which looks clean enough, but is he going to tote that thing over to the US Senate if he beats Heather? Hey, Martin, as the kids say, "Get a room already..."

MAY DAY 

Rick May

As a Senior Alligator pointed out here Thursday, the blame for the New Mexico Finance Authority scandal rests with the Governor who appoints most of its members. Hours later the Martinez administration had one of its rare political casualties as news hit the wires that the authority is now in the process of firing director Rick May:

Board chairwoman Nann Winter said the decision to suspend May represented a vote of no-confidence in his management of the authority. Winter said the board decided "we needed to change the direction of that organization immediately as well as address the arrest." She said "clearly, there is a responsibility on Mr. May's part in what has transpired to date." The board's decision is likely the first step toward firing May and Duff or pressuring them to resign.

It's a hard fall for May who was a Martinez golden boy when she won election in November 2010 and her transition team announce he would be the secretary of the powerful Department of Finance and administration. Back then, they said:

“May has led a respected and accomplished career that includes working for Sandia National Laboratories as a manager, serving as chief appropriations and tax analyst for the Republican caucus in the New Mexico House of Representatives, and operating as a policy director for Brownstein Hyatt Farber Schreck, LLP, as well as a principal at Davidson & Company, Inc.”

May didn't last long at DFA or NMFA and now La Politica says he is DOA. Hasta la vista, Rick, and don't bother calling Susana. She thanks you for your service.

THE AROMA

The NMFA scandal is #2 that has reached the doorstep of the Guv. The first being emailgate. Santa Fe is starting to get that aroma again---isn't it?

PERA PAIN

Another angle today on our debate over reforming PERA--the retirement plan for state employees. Retired APD Seargent Dan Klein writes:

What about the 1,200 double dippers in PERA?  The public has spoken loudly and clearly that they wanted double dipping ended.  The legislature repealed double dipping but allowed those already in to continue.  This is 1,200 jobs for vets, promotions for current workers and just plan jobs for those unemployed.  Why haven't we heard from the legislature and governor on sunsetting these folks?  Taking 1,200 New Mexicans off the unemployment line would be a good start.

Also, I retired at age 40 after twenty years of service at APD.  I greatly appreciate the retirement, but the math doesn't make sense.  If I live to 80, I will have been retired, and drawing a full pension from PERA for 40 years, yet I only worked (and paid into the fund) for 20 years.  No retirement plan can afford this.  I do believe future hires (don't change things for people already hired) should have to work to a minimum age before retirement.  I don't think public safety employees working to age 50 and all others working to age 55 or 60, before retirement is too great to ask and good for the fund and taxpayer. It would cut the cost of PERA for the future and retain smarter workers, instead of losing them at the height of their career.

The double-dippers of the past seem to have divine protection. That is an area ripe for reform. Also, a minimum age requirement for public safety retirees probably isn't too far away or an increase in time served before they can take retirement. State employees--excluding public safety--now have to work 30 years--instead of 25 to get retirement checks.

THE BOTTOM LINES

A reader writes

In Thursday's blog under EMAILGATE you write "He's been like Jean Valjean in Les Misérables--relentlessly tracking his prey." I like the simile, but I think you mean Inspector Javert rather than Jean Valjean.

Well, we've seen the movie, but apparently need to go to the musical....

That's it for this week. Thanks for stopping by.

This is the home of New Mexico politics.

Reporting from Albuquerque, I'm Joe Monahan

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Not for reproduction without permission of the author

We dig writing the blog from A to Z, but there's so much informative and insider stuff coming to us from our emailers lately that we have no choice but to give it up to them. So here we go....

Exactly what does the audit scandal at the New Mexico Finance Authority mean to the state's economy and the daily lives of Mr. & Mrs. New Mexico? We haven't really seen it summed up anywhere--until now. A Senior Alligator with a background in these matters comes with the explanation in a nutshell:

The state's construction industry will further dry up. Already the NMFA has cancelled a $40 million bond issue for statewide infrastructure improvements, and will probably not issue, or seriously delay, the $100 million dollar issue scheduled for later this fall. 

The NMFA has cancelled the Framing the Future conference previously scheduled for September. That means that the NMFA has nothing to offer the counties, cities, and Indian tribes and is essentially throwing in the towel on future infrastructure. Couple that with Moody's and Standard and Poor's placement of NMFA on possible (read probable) downgrade and one can assume that a drop from current AAA rating on bonds will drop significantly, meaning that interest rates will gobble up a much larger share of public financing, leaving less for job-creating projects. 

Couple this scenario with the Governor's killing of the $250 Million capital outlay bill in her first legislative session and her bungling of the capital bills in the 2011 session and the result is at least a half a billion dollar hit on the economy.

Okay, that's the economic impact. Now how about some good old-fashioned finger pointing? We jabbed at State Auditor Hector Balderas--as did the newspaper--for not being ahead of the curve on NMFA's fraudulent audit, but it is the Governor, says our Senior Gator, who must shoulder most of the blame:

The buck stops at the Governor's office. No matter how much finger pointing is going on, the NMFA is controlled by Martinez appointees. The Board includes four members of her cabinet, some of whom attended very few meetings. Furthermore, she changed almost all the other members so that 8 out of 11 NMFA board members are her appointees. The Board failed badly in its fiduciary responsibilities. The President of the NMFA, Richard May, is her designate as well.

The Governor's first NMFA Chair unfortunately resigned, and now we have Nann Winter, wife of ABQ City Councilor Brad Winter, as her replacement. Is she up to the task? Where were the cabinet secretaries, the chief of staff, the political advisers, and indeed, the Governor when they should have been competently minding this very vital state resource? 

The NMFA has had a proud 20 year history, under Democratic and Republican Governors. It is sad to see the agency crippled. The construction industry and New Mexico's already anemic economy will suffer the consequences.

And that's how you cut to the chase. Balderas takes a minor hit for not being out in front, but the ultimate responsibility rests on the Fourth Floor of the Roundhouse. And that's why we have Senior Alligators--they specialize in the unvarnished truth--no matter what political party is helped or hurt by it. Did we say it's also the stuff you won't get anywhere else?

A timeline on the NMFA scandal is here. AP coverage is here. TV news comes with the interview of one of those arrested.

EMAILGATE

Then there's that other scandal hanging in the air--emailgate. To say that Michael Corwin of the union-funded Independent Source PAC has been leading the charge on this is an understatement of the first order. He's been like Javert in Les Misérables--relentlessly tracking his prey. And the Republicans have taken notice, repeatedly branding Corwin, a veteran private investigator, as a paid political hack and doing their best to undermine the stories that he and the PAC have continually produced and that have been picked up by the the media.

This week the R's slammed Attorney General Gary King as a union-financed political attack dog for Corwin and company and said emailgate is politically motivated nonsense. King did not respond, but Corwin did:

The Public Education Department (PED) had all the email addresses it needed to reach its licensees and therefore had no reason to try to create a list using its staff and computers to comb outside resources. PED has every right to use the emails of its licensees that it collected through the licensing process in order to communicate with the licensees. Even if it is to send licensees a newsletter. But PED knew that (Gov. Martinez political adviser) Jay McCleskey did not have that same right. So they created this list using government employees on government computers spent combing non-PED websites for days during government business hours just to get McCleskey a list he could access.

PED Secretary Skandera and others involved are in serious trouble. Republican efforts to bully King will not change that.

Well, we'll see how much trouble anyone is in as this goes forward.

Will there be any more emails from ISPAC hitting the streets of communications among senior Martinez staffers using private email accounts as they did in the PED case? The short answer is yes.

PERA PAIN

A reader writes of our discussion this week of PERA and the proposed reforms to the retirement plan for state workers:

Your comparing the unpaid portion of a mortgage with the unfunded liability of a pension is devoid of any understanding of the underlying economics. In a mortgage, a borrower has use of his purchase, but acquires complete ownership over time as the mortgage is paid from money earned or acquired by the borrower. In a pension benefit, the beneficiary, their employer, and earnings on the corpus combine to pay a benefit some time in the future. Therefore, unless the liability due the beneficiary is reduced by some means, the beneficiary will necessarily receive less than his expectation or possibly even nothing. You fail to understand that the unfunded liability is owed to the present beneficiaries who hope to collect some time in the future.

We disagree. We don't see the "unfunded liability" as having to apply much to present state workers because the fund has a robust balance of $11 billion. Also, PERA itself says the burden of its reforms would be placed mostly on future retirees.

One more on this from reader Robert Pacacioz:

Joe, thanks for standing up for us and speaking the truth about the "working class." I am now "retired" but still fighting for "our rights." Thanks again for saying, standing up, and doing the right things for us New Mexicans.

CONVENTION CORNER

Lockett & Berry

Our continuing coverage of the economic slump has included the goings on--or lack of them--at the ABQ Convention and Visitors Bureau. One of the Alligators recently analyzed that ACVB has been offering excuses for 15 years for not getting its act together in attracting conventions to the downtown convention center. ACVB President and CEO Dale Lockett comes with the counterpoint:

Joe, we thought it would be useful for your readers to have some of the real facts regarding Albuquerque's convention business and the results of ACVB's efforts.

Fiscal Year 2012 Convention Center bookings saw a 171% increase over the previous year, bringing in over $35 million in future direct spending to the city. This is a level of bookings that we have not enjoyed since 2002--not a bad statement to be able to make as we still deal with the uncertain economic climate. Overall, convention bookings throughout the city saw a 29% increase in hotel room night usage. And that is on top of 2011 numbers posting an increase of 6% in attendance and 3% increase in hotel room nights.

Our destination marketing efforts are stronger than ever with aggressive campaigns producing strong results...Incidentally, ACVB’s contract does go out to bid, and we were the only responder in 2010.  That is because our 501c6 model was specifically constructed to do this work, and almost 70% of cities across the country use this model.

Your alligator’s accusation that we have been blaming situations for the last 15 years is puzzling.  It would be hard to refute that the tragic events of 9/11 not only had a profound impact on the travel and tourism industry in New Mexico but throughout the entire world.  It would also be hard to ignore the significant Native American resort development in the Central Rio Grande corridor and its effect on hotel and convention business in Albuquerque. These resorts are gorgeous assets for the tribes and the state...

Anyone that has been to the Convention Center knows that it is in dire need of updates in order to be competitive. Mayor Berry recognizes that need and has made a commitment of $20 million in renovations as a result of refinancing the bonds on the Center. This will be the first significant improvement since 1991.

Lodgers tax hasn’t fallen off a cliff. In fact, it is only down by 1.4% year over year. And the $700K deficit is due to the city replenishing its reserve funds this year--and thankfully our organization was financially strong enough to endure the reduction...

The convention and tourism industry is complex and competitive. And it is a critical economic engine for Albuquerque and New Mexico--so important that having serious dialogue about its future should be a top priority for city and state leaders...

And for those who missed it, here is the comment that set off the discussion:

It's total farce. ACVB is always in the middle of regrouping, revamping, reinvigorating, reforming and/or repackaging their marketing effort. 15 years ago they were blaming the tribal casinos for the decline in Lodger's Tax revenues. 10 years ago it was 9-11.  Five years ago it was because the Convention Center is outdated/hasn't had enough money spent on it...Until ACVB is put out for competitive bid--and an open and honest competition--nothing will change. The only thing we can count on from them are mediocre efforts, anemic results, squandered millions, a bottomless sense of entitlement--and the same dog-eared excuses we've been hearing for almost two decades. 

NEW LOOP NEEDED

Joe

Yet another Senior Gator on the blog today? We're honored. This one is on the recent redistricting which turned into an $8 million financial folly:

Joe, After two failed efforts, its time to take the Legislature and the Guv out of the loop and implement a citizen commission to do the job of resdistricting. The process failed in 2001 and again in 2011. Taxpayers paid the bill for the lawmakers' intransigence and their failure to produce final version agreeable to all parties. Governors Johnson and Martinez share equal blame with Democratic legislative leaders on these failures.

Yep--$8 million bucks to the lawyers for a job that could be done for a fraction of that by a commission. But it only happens every ten years so how soon we forget the folly....

We know that Martinez Chief of Staff Keith Gardner and Jay McCleskey will choke on their breakfast burritos if they read this--but the above Senior Gator placing blame for a problem on both political parties is yet another example of how New Mexico Politics with Joe Monahan is an equal opportunity employer. We look at the issues from every angle--not a pre-formed political perspective. We're tough, fair, independent and accurate. And when we make a mistake we admit it. That's why we're New Mexico's #1 political web site--year after year. And that's also why.....

This is the home of New Mexico politics.

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Denish

Berry

The Monday blog addressing ABQ's anemic economy (and the state's) brought in the email, including a couple from possible 2013 mayoral candidates Diane Denish and Pete Dinelli. We're going to run them and have offered ABQ Mayor Berry space to respond or discuss his own economic views. The Governor's office also has a standing invitation to state their views here.

We're also back today with more on the status of the big pool of money that funds state retirement checks under PERA--the Public Employee Retirement Act. It's all part of our continuing commitment to provide coverage of the big story of this decade--the economy and its impact on our state's politics. Our goal is to encourage debate that offers criticism as well as solutions.

First up is former Lt. Governor Diane Denish who was defeated by Susana Martinez in the 2010 Guv race. Observers have tagged her as interested in the mayor's contest next year and she recently told us she is looking at it, but it is too early to make a decision.

SHE'S BACK

Joe: Your Monday morning blog was on target. Sure, everyone knows it is tough to create jobs in the current environment, but Martinez and Berry have another problem. What about simply working to protect the jobs we already have? Some examples:

The F-35 Fighter Wing decision to locate in Arizona--not Holloman air Force Base at Alamogordo-- is not necessarily a testament to the strength of Arizona Senator John McCain, it is a testament to Martinez's weakness. New Mexico has proof that if a Governor (a la Bill Richardson) goes to the mat for a base, they can have impact. When Cannon Air Force Base in Clovis was on the line, Governor Richardson and our base planning committee were working hard until that last dog died and it paid off--for New Mexico and Clovis.  Where was Susana in this debate? Nowhere.

Remember that Los Alamos Laboratory Construction project that was to be the largest in NM history?  That project had been in the que for 12 years. Contractors and others were preparing to be a part of the effort--it meant jobs for small business for Northern NM where unemployment is high. Was Governor Susana working the halls of Congress pushing for NM? Did she call in any chips to save and expand jobs in NM?  No. Where was she when that decision  was in the works?  Nowhere.

Meanwhile she killed one of our cleanest industries--movie making. Movie publications and movie moguls have gotten the negative signals--New Mexico is no longer an industry leader, but an industry follower.  Our "model" for attracting the industry is creating jobs--in other states. And, it's New Mexico's movie work force, which had been building steadily the last few years, that is out of work.....and that leads us to Mayor Barry...

Where was Mayor Berry when the movie industry battle heated up?  He claims to have been behind the scenes but leaders are usually in the forefront.  Mayor Berry missed a prime opportunity to stand up for Albuquerque and now many of those jobs are disappearing if not already gone. 

Where was Mayor Berry in 2010 when ABQ Republican State Senator John Ryan filibustered the capital outlay bill  at Martinez' bidding--much of it meant for Albuquerque. The dollars were comparatively small that year but it was a year when everything counted. Berry failed to step up to push for the regular session passage of the bill.

Meanwhile, about the Mayor's "ABQ The Plan." Well, it started out to be ambitious. But as one team member pointed out to me, it was  like a good glass of single malt scotch in the beginning. Then he threw in a few ice cubes, added some water, gave it a twist, and pretty soon....well, you get my drift, nothing with any "flavor" of a real plan was left.

But don't worry.....Susana and her top dogs are monitoring the tattoo parlors (whew!), creating complicated school evaluation formulas that only a few people on the planet can understand, Berry is putting a pink bow on the white elephant convention center, and both revel in  luring temporary call center jobs--temporary for the workers and temporary for the companies--and New Mexico joins a handful of job losing states.

Want less Government?  This is it....or is it leaderless government?

PETE'S PATH

Now on to Pete Dinelli, the former ABQ City Council and Public Safety Director under Mayor Marty Chavez who recently opined here on the convention center. The possible 2013 mayoral contender comes today with his take on the city economy:

Joe: Your report that the flat lined economy has hit city revenues and that New Mexico is the only state in the region losing jobs reflects failed leadership by Mayor Berry and Governor Martinez. Both have failed to present any plan to  grow local business and attract new industry. Mayor Berry spends $20 million to renovate a vacant 40 year old convention center for the Albuquerque Convention and Visitors Bureau that has a $750,000 shortfall in revenues and that can't attract conventions.  Thanks to Governor Martinez, the State Fair will have a new $30 million dollar casino in one of the poorest parts of town with the highest crime rate where the jobless cab spend their unemployment checks.

Everyone blames Obama for the bad economy and Romney only thinks more tax cuts for the rich is the answer while the middle class loose their jobs. No matter who is elected President in November, New Mexico has a large target on it as far as severe cut backs at both Sandia National Labs and Los Alamos National Labs, not to mention  military cutbacks to our bases. Albuquerque and New Mexico need to prepare itself for stark reductions in federal spending. Albuquerque and the state need to take steps to reduce our economic reliance on federal funding. Mayor Berry needs to get rid of his Economic Development Director for his failure to produce and do the job himself of promoting the city and start anew by first examining industrial Revenue Bonds,  capital improvement projects and Tax Increment Districts.

A READER WRITES

It's not just the politicos talking about the sluggish economy. Reader James Meiers was among those emailing in responses to the Monday blog:

I am one of those people who just moved away from Albuquerque in search of better opportunities and the anemic job scene was definitely a major consideration. I agree with you about the condition of the local and state economy based on my own observations and the experience of having just traveled from Albuquerque to Salem, Oregon.

My brother visited from Los Angeles to help me move. Given his tangential professional relationship to Hollywood, he was shocked at the rise and apparent fall of the film industry here--which had been seen in L.A. to be a threat luring professionals away. But we went out to eat every day, and spent time visiting various businesses and touring ABQ. Business is down everywhere, On the westside I've noticed that restaurant visits have seemed to be decreasing steadily since Christmas. It just seems like people are not going out or just going away (I should also mention that there are a half dozen or more houses for sale in my immediate neighborhood, which is in the heart of the city and has long been home to very long-term residents (It's not like the boom and bust of the westside, or worse, Rio Rancho).

I stopped in Moab, Utah last Friday night and that city was packed. I know it's a tourist destination, but aren't Albuquerque and Santa Fe? Albuquerque has a large airport and is the crossroads of two interstate highways. Santa Fe is only 45 minutes north. Moab is in the middle of nowhere, and it was filled with adventure and leisure tourists and the hotels were full.

I couldn't find a hotel room in or around Salt Lake City because there was an outdoor living industry convention that took over the city. Traffic and businesses in Colorado, Utah, Idaho, and Oregon have been pretty busy and traffic and life just seem more abundant. Downtown Boise on Saturday night was thriving thanks to their entertainment venues and a local motor cross event. Portland was also bustling on a Sunday late afternoon and evening as I drove around the city for a few hours just looking around before heading down here to Salem.

The problem is not the national economy. The problem is that New Mexico and Albuquerque are letting their economies wither and die due to inaction. This isn't just to put the blame on the inaction of the government, though they deserve serious blame for being inattentive or incompetent in the functions of Economic Development, tourism and cultural affairs--all of which should be working together. But the local business community is also to blame. This is a widespread problem, and demands a widespread response from the government, businesses, and the community--all of which now strike me as indifferent or otherwise completely disengaged compared to Albuquerque's equivalent cities and New Mexico's neighbors.

Blaming the specter of Washington, which already does way more for us than against us thanks to federal funding, gets us exactly nowhere.

THE PERA PANIC

Wayne Propst

It's not a panic at PERA, contrary to our assertion in the blog this week, argues Wayne Propst, the executive director of the Public Employee Retiree Board. Our contrary opinion--that many of the proposed reforms of the $11 billion PERA fund that would cut benefits of state retirees now and in the future are not needed--drew this counterpoint from Propst:

Joe, Your headline about panic at PERA couldn’t be more inaccurate. It is true that PERA weathered one of the worst economic downturns in the country’s recent history better than many public pension plans. You didn’t mention, however, that in addition to a funded level of 70.5%, PERA has a $4.9 billion unfunded liability. What would you have us do with that unfunded liability Joe, saddle future generations with it, kick the can down the road, or deal seriously with the problems we face now before they get worse?  New accounting rules soon to take effect could cause that $4.9 billion unfunded liability to increase if we don't act reasonably and soon. And our funding level hasn’t “gradually increased.”  It is at 70.5% and declining.

Yes, in 2041 we may, if all of our economic assumptions prove accurate including that we earn at least 7.75% on our investments each and every year for the next 30 years, be able to fund half of the benefits we are promising today.  But our funded status won’t stop declining and our members deserve better than a few cents on the dollar after having paid into PERA their entire careers. No one honestly believes we can invest our way out of our unfunded liability, Joe. The way to solve this is to do what the Board has done, set a reasonable funding goal and achieve it through measured changes that ask a little from everyone. This isn’t about some distant point in the future, this is about now.

Even if all of the changes the Board has proposed are enacted, New Mexico will still offer one of the best public pension plans in the country.  The kind of pension plan that has gone the way of the Dodo bird in the private sector and many states and localities precisely because they failed to take the necessary, responsible and timely action that the PERA Board has taken. Reducing a 3% compounding cost-of-living-adjustment (COLA) to 2% is hardly "slashing" benefits.  Only three states, NM, Arkansas and Mississippi have a 3% compounding COLA and some PERA retirees receive more as a result of the compounding than their original pension benefit. It is the single largest contributor to our unfunded liability.  Again, in states and localities throughout the U.S. COLA's are being eliminated entirely and defined benefit pensions like PERA offers are being replaced by 401K plans.  That's not the direction we want to go in New Mexico and with leadership we won't.

The PERA Board doesn't have the luxury of sticking its head in the sand and hoping these challenges go away.  Pretending that genuine, short and long term funding challenges don’t exist sounds a lot like what we see too much of these days, i.e. ignoring today’s problems and placing the burden for fixing them on future generations when they will be worse by magnitudes.  The PERA Board has taken a long, honest and sober look at where we are and has proposed reasonable changes to the benefit we offer.  That isn’t panic that is responsible leadership. No group has a greater commitment to the best interests of our members and retirees than the PERA Board.

OUR RESPONSE

Joe Monahan

I appreciate the input, Wayne, but strongly disagree.

Where is it written that future generations will be absolved of any and all problems? PERA is too ready and willing to place a burden on today's people for a generation that has yet to be born. It is the same argument that is being used to back proposals that would ravage Social Security, Medicare and Medicaid. PERA has a responsibility to the people of today and the immediate generation to follow. Projecting the world of 2061 is foolhardy and downright dangerous, especially if it is used as the excuse to cut benefits to today's retirees and those of the near future (Your consultant says PERA funding is secure under current policy for half a century--that's 2061--not 2041).

And we are well aware of the $4.9 unfunded liability. we just don't agree that you can't carry an unfunded liability on the books. That's why we have home mortgages. PERA is insisting that we have hardly any unfunded liability. That's like paying off a 30 year mortgage that is a year or two old. It may make you feel good, but it is not necessary and not paying it off does not mean you are in immediate financial peril.

You say only 3 states have the compounding COLA. We might point out that they are the 3 states that pay their employees the least of the 50--or close to it. Their pension is a hard-earned reward. Thousands of your retirees are middle class, middle income citizens. Many of them reached a top salary of only $20 an hour. Many of them were blue collar workers. They were not overpaid compared to the private sector. Far from it.

We attract many state workers because of the pension and health benefits. In exchange, most of their salaries are modest. We're not talking of the few making over $90,000 a year but the vast majority of classified employees--the secretaries, the janitors, truck drivers and the like. We have already passed a major reform, raising from 25 to 30 years the number of years required in service before you can retire. That should hold us for now.

We're not opposed to a minor tune-up to the cost of living provisions and a tweak or two to address your intense concern over the "unfunded liability," but continue to believe there is a false urgency being created here that will not be beneficial to future generations but detrimental to them by permanently downsizing pensions.

We believe in a future prosperity where America and New Mexico generate abundance and reward their workers with ample pensions. We do not subscribe to the theory of permanent austerity. That's why we will continue to stand with those who will fight unnecessary changes proposed by the PERA Board and urge our state Legislature to go slow--very slow--before enacting pension reforms that will hurt working class New Mexicans--who happen to have toiled for the government.

Again, thanks for your thoughts, Wayne. We appreciate the work you and the board do. 

THE BOTTOM LINES

Sam Bregman lost his race against Javier Gonzales for the chairmanship of the state Democratic party by 12 votes not one vote, as we blogged in a first draft on Tuesday.

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Sam Bregman

The Guv

They say power abhors a vacuum and when it comes to effective Democratic criticism of Governor Martinez the vacuum has been canyonesque. But now, with just three months to go before Election Day, at least one ambitious Dem is shooting back at Martinez, hoping to thwart her plans to pick up legislative seats in the November balloting and in the process perhaps advance his own gubernatorial ambitions.

Flamboyant trial attorney and former ABQ City Councilor Sam Bregman, who lost the Dem party chairmanship race to Javier Gonzales in 2010 by just 12 votes, is back on the campaign trail under the umbrella of his political action committee--Grassroots New Mexico--and has become the first big name Dem to publicly take it to the Governor and her chief political operative Jay McCleskey.

At a weekend rally and picnic sponsored by the Democratic Women of Dona Ana County, Bregman started to frame the case against the incumbent Governor who has been on a political picnic of her own, nursing a 59% approval rating and enjoying an extended honeymoon from the Dems and the press. We listened to a recording of the event and Sam's picnic menu was all red meat:

We know that...this Governor and Susana PAC and (Martinez political adviser) Jay McCleskey are going to attack the integrity of our candidates...the question then becomes if we are going to sit back and just take it or are we going to do something about it? If Martinez is going to be out there attacking good Democrats with her hit men, let's make sure we get the debate going...so the first important question has to be asked: What has this Governor done to improve the lives of New Mexicans? 

We know she is pretty good at trying to divide us on the issue of immigration...but what has she done? She has not done one single thing to improve the lives of New Mexicans in the 20 months she has been there. Take, for example, the economy. What has she done to improve the economy in New Mexico? What has she done to create a single job in New Mexico? We've go to be fair. She has created a job for Jay McCleskey and he's been spending a lot of money they've raised from out of state attacking good Democrats...

What has she done for women in the first 20 months? Nothing...That's not true. She did do something. She decided to abolish...the Commission on the Status of Women...What has this Governor done when it comes to education? She appoints someone (as public education secretary) who can't even get approved by the state Senate. That's not the way you govern, that's not the way you lead....

Martinez and McCleskey have made no secret that they plan to come after legislative Dems in the election--chief among them State Senate Majority Leader Michael Sanchez--but McCleskey and his tactics have made him a public figure and given Bregman and the Dems the opportunity to demonize him and use him as a foil.

Martinez is saying that the Legislature is blocking her efforts at "reform." But beyond her drive to repeal driver's licenses for undocumented immigrants, those reforms remain obscure and undefined to the electorate--the reason why Bregman is trying to set her up as a "do nothing" Governor.

Attorney General Gary King has already announced his 2014 Dem Guv candidacy and Bregman is sounding like a possible candidate and there will probably be others. After all, nature abhors a vacuum--political or otherwise.

EMAILGATE UPDATE

Yes, emailgate is serious--if someone makes it serious. From the paper:

On May 2, (Public Education Department spokesman Larry) Behrens sent both (email) lists to (Martinez political adviser Jay) McCleskey and to personal email accounts for Martinez chief of staff Keith Gardner, PED Secretary Hanna Skandera and two other officials. Skandera forwarded the lists to a campaign email address for Martinez, but the administration says the address was no longer valid. The office of state Attorney General Gary King is now investigating whether the administration used public resources for political purposes in violation of the state Governmental Conduct Act. There are civil and criminal penalties under the act. The administration has denied wrongdoing. McCleskey has said the lists weren’t what he was looking for and that he hasn’t used them....

Civil and criminal penalties? That phrase has to get the attention of the upper echelons, if not send some chills down their spines. Evidence that it is causing some twitching came Monday when the state Republican Party slammed AG King, saying the only reason King is investigating is because he receives campaign money from unions. King has announced his candidacy for the 2014 Dem nod for Governor.

King is going to be excoriated as a political hack and accused of inflating emailgate for his own political purposes. But that doesn't mean he can't and won't inflict political and legal damage on Jay and the gang.

GHOST TOWN BLUES

Governor Susana must have learned something by mistakenly getting in front of this fiasco. The AP comes with the no spin coverage of the "scientific ghost town" that turns out to be haunted:

Pegasus Global Holdings’ surprise announcement that it was pulling out of plans to build a $1 billion scientific ghost town in eastern New Mexico is stirring skepticism of the private firm’s grandiose plans for transforming 15 square miles of this largely rural state into a next-generation research center. Lea County had been working closely with the company after winning the bid to house the Center for Innovation, Testing and Evaluation. But “when we started pressing for details, that’s when they decided to look elsewhere,” county manager Mike Gallagher said.

The Guv greeted the Pegasus project with great fanfare in May, pointing out it needed no government funding or incentives. But because of that, apparently no one on the Guv's team took a good, hard look at the company's financials, leaving Susana hanging out there with a major economic embarrassment. What made it especially bad was the fact that Pegasus was reviewed by Governor Bill's economic advisers and they kept him away from the deal.

After nearly two years it is clear that Governor Martinez is not a leader who gets deep in the weeds when governing. She has a broad view and has staff filling in the blanks. Nothing wrong with that, except Susana appears to need a couple of heavy hitters to make sure she doesn't step in the dung pile again. But who? The Governor's political adviser, Jay McCleskey, has tight control over her and as long as her poll numbers are good she seems content to keep her circle confined to those who got her to the dance.

Normally, a Governor would crack some heads over the Pegasus mess, but what is going on at the Fourth Floor of Santa Fe's storied Roundhouse is not normal. 

MARTINEZ AND ROMNEY

Martinez has secured a speaking spot at the Republican National Convention later this month. The announcement was trumpeted by her political team, but wouldn't the real news have been if the nation's first Hispanic female Governor--a Republican often mentioned as a VP pick--did not get a speaking spot? Yep.

Republicans are in need of touting any Hispanic ties. Their polling with the group is miserable, even as Hispanics are one of the nation's fastest growing voter blocs.

Will Martinez be able to help Romney in New Mexico? Well, if she was on the presidential ticket she might, but her aides say she has not been vetted for Veep and as readers of this site surmised long ago, the talk of Susana as VP was symbolic--not substantive,

Martinez's political operation--her fund-raising list, voter info etc.--could be useful to Romney, but the state does not appear to be in serious play, with Obama holding a steady lead.

As we've blogged previously, the most important aspect of the presidential contest on a political level in New Mexico is its impact on the Senate race. GOP Senate nominee Heather Wilson does not want Romeny to tank or the bottom could fall out on her. So while Martinez helps Romney here, she will also be helping Heather. Now how does Susan feel about that?

The usual murmurings that occur when two ambitious politicos share the spotlight are now occurring. Is Susana jealous of Heather who would be a queen bee in her own right if she takes the Senate seat? Would Heather overshadow Susana? Is Heather dismissive of Susana's political skills? What about Heather's relationship with Jay McCleskey now that he is so publicly tied to the hip with Susana?
And then there's ABQ GOP congressional candidate Janice Arnold-Jones who lost the 2010 GOP guv nomination to Susana. Will we see the Guv on the trail for Janice who faces a tough contest against Dem Michelle Lujan Grisham?

That's some of the stuff that they're mulling over in the elite circles of the state GOP. And it's quite entertaining, isn't it?

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The stagnant, anemic economy in the state's largest city--the subject of numerous blogs here from readers, businessmen and women and yours truly--has now burst into full public view with the release of official records showing that for the budget year ending June 30 the city of Albuquerque's tax collections grew by only 1.9 percent, or basically at the rate of inflation.

Mayor Berry says his no growth, dead-in-the-water-economy can be blamed on the sluggishness of the national economy, but cities and states surrounding New Mexico have started to resume more solid growth, while we languish. Arizona, Colorado, Utah, Oklahoma, Texas and Nevada all experienced year-over-year job growth for the month of June. New Mexico was the only state in the region losing jobs.

The latest state figures show the Albuquerque metro was down 4,000 jobs in June 2012 compared to June 2011. It has been a mostly relentless decline in job losses here the past several years. The unemployment rate has come down only because job seekers continue to flee or give up and are no longer counted.

Like Berry, the nine member ABQ city council seems completely unperturbed by the disturbing trend that has taken hold here--stuff leaving and not much coming in. The four Dems on the panel seem to be suffering from a severe case of burn-out and the five R's are content to wait for the "invisible hand" of the market to revive our moribund economy.

The city still comes alive on Friday nights, with the restaurants and other venues jammed, but the rest of the week the town can barely stay awake past 8:30 p.m. (This weekend's back to school tax holiday also had the cash registers' humming).

The city's economic development department grows cobwebs--no announcements of anything significant or any hope for anything significant. The mayor touts "ABQ, The Plan," a minor league checklist of bike paths and the like that make for talking points at neighborhood meetings, but little else.

The city's business community, its political leadership and its media are not in a fighting mood. They take whatever comes their way as the new, downsized ABQ takes shape. That the flat tax collections are enough to keep what we have seems good enough.

The long, slow grind of the great Bear Market has returned ABQ to its past--a nice enough place to raise your kids--but not so nice when they start thinking about building a life here.

And dial down your expectations for the city's economic future, says one of our more informed City Hall Alligators. From downtown:

The economy does not show any signs of improvement. We need to change our revenue predictions for the next 5 years because the base will be lower. The city's economists thought tax collections would grow by 2.9% in 2012. They assume growth to be 3% in 2013 and if we do, that will be growth of 3% from a smaller number. The downward revisions are unavoidable. We are also going to be hit with tax cuts for manufacturing and construction in 2013. It is possible that revenue might be flat in 2013. If the mayor wants to pay for his "ABQ, The Plan," he will need to take money from all other departments including public safety. The only way to do that is reduce the number of employees or forgo services provided by contractors. Consumers are not going to spend enough to finance a bike loop or kayaking on the Rio Grande.

Mayor Berry is more than head strong about his ABQ Plan, but the way the Alligators see the city's biz scene, he would be well-advised to come up with a "Plan B."

THE LOSSES

On the state scene, the losses continue to far outweigh the wins. Here's another:

Holloman Air Force Base will not become the Air Force's new F 35 pilot training center, the Pentagon announced. Instead, the schoolhouse for the stealthy, fifth generation fighter will be Luke Air Force Base in Glendale, Ariz...The training center, which is expected to provide an estimated 1,000 jobs to Luke, will train pilots for the F 35 Lightning II joint strike fighter. In a statement, Air Force officials said Luke was chosen because of facility and ramp capacity, range access, weather and capacity for future growth.

The Arizona win also speaks to the muscle of Senator McCain, and when Senator Bingaman leaves next year the seniority of our congressional delegation plummets. Brace yourself.....

THE PERA PANIC

While today's state economy stumbles and struggles, some in Santa Fe seem to be more concerned about the citizens of 2041 than those living in the here and now. 2041, you say? Yep. That's the year the Public Employee Retirement Board has targeted to have its giant retirement fund cover 100% of present and anticipated future retirement checks for state workers eligible under PERA.
Trouble is, covering 100% of all liabilities would, among many other things, mean slashing cost of living adjustments for retired state workers (over 64,000), increasing by 1.5% the amount taken from  employee paychecks and upping by the same amount what the state contributes to the PERA fund.

These and numerous other proposed PERA changes are aimed at achieving a goal birthed in the soup of the new austerity and have little to do with fiscal prudence. They have much to do with an unfounded panic, or worse, an envy that there is still someone out there who can collect a monthly pension check.

PERAs own consultants admit that without any changes at all, the current fund of over $11 billion will be able to deliver retirement checks undisturbed for half a century:

Cavanaugh Macdonald recently completed a projection on the long-term solvency of the PERA Fund. Under the current plan, the PERA Fund will have enough assets to pay pensions until 2061.  

You mean the PERA board wants us to panic over who will be receiving PERA checks in the year 2062? It sounds like some kind of Woody Allen script.

Half the PERA fund is invested in the stock market and when it crashed in 2008 the fund crashed with it. That meant that the fund was projected to be able to cover only 70% of its far in the future liabilities instead of 93%. But with the market recovering, that percentage has gradually increased.

Rather than being so eager to downsize the living standards of current and future generations of New Mexico retirees, PERA needs to take a long and close look at how much it has in the stock market, the management of those funds and the fees we are paying for that management.

All of this imaginary economic panic simply confirms that Santa Fe is still lost in a fog--even after four years of economic pain. As neighboring states begin to add jobs and see at least some recovery from the devastating recession, we are looking at problems that don't even exist and that effect folks who have yet to be born.

New Mexico's legislators, who must approve any PERA changes, would be well-advised to entertain minor tweaks to PERA--if that--and get busy on solutions for the citizens of today and the next generation. We have faith that New Mexicans of 2062 will be able to chart their own course. It's the direction we are headed in 2012 that causes us to worry.

STATE OF THE DEMS


Let’s not get ahead of ourselves. Before we get to the 2013 Mayor's race or the 2014 Governor's race, we've got one of the most competitive US Senate races in the country. Also, we've got to hold New Mexico for the president this year and we have 3 Congressional races to win--one of which is a seat that was Republican for 40 years before Martin Heinrich won it. In addition, we've got to hold our House and Senate majorities in NM.

We are three months away from a make or break moment for NM Democrats, and that is and will remain the primary focus of Chairman Javier Gonzales and the Democratic Party. Any suggestion that we should be doing anything else at this point in the election cycle is reckless and ill-informed.

The truth is that the party...is as strong as ever under Javier's transformational leadership. He took over a party that had become heavily dependent on (former Governor) Bill Richardson and he built a strong, statewide fundraising base, recruited a slate of candidates that even you have given a great chance to win in November, and won 4 redistricting trials to stop the Governor's efforts to rig elections for Republicans.

We have built one of the strongest coordinated campaigns in New Mexico history, with a robust budget and large staff...We have helped keep Heather Wilson's negatives near 50 percent, and the state House and Senate are more organized than ever and fully integrated into our effort to keep and grow both majorities...

We are also well-positioned to hold the ABQ congressional seat--which many seem to have forgotten was a Republican seat for over 40 years--hold Jeff Bingaman's seat and keep New Mexico Blue for the President.

These aren't minor accomplishments, these are exactly the things that should be the priority of the party right now; they are a reflection of the strength of the Democratic infrastructure that Javier continues to improve. Anyone who doesn’t call it a strong party is using a different measuring stick or just plain doesn’t understand what the party does.

THE BOTTOM LINES

A reader writes of our mention of the selection of Taos County Commissioner Andrew Chavez as president of the NM Association of Counties:

Surely Andrew Chavez was not put in the position of NMAC president by Taos county voters. He only received 13% of the primary vote and will leave office at the end of the year.

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(c)NM POLITICS WITH JOE MONAHAN 2012
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