We begin where we left off before the turkeys were served up--the crash in oil prices that is bringing wide smiles to the faces of New Mexico motorists but causing fresh anxiety among the bean counters in Santa Fe. . .

The price of West Texas Intermediate Crude has now crashed to $66 a barrel. It plunged again Friday in the wake of that eventful OPEC meeting that saw no agreement to shave supply. As you've heard, for each dollar decline in the price of oil the state's general fund suffers a loss of between $6 and $9 million. . .

Bloomberg News reports that oil production in parts of New Mexico's SE Permian Basin become unprofitable when oil prices breach the $75 a barrel mark. That could lead to a cutback in production and even less tax revenue for the state. . .

While it may be time to get out the worry beads, it isn't time to push the panic button. Not yet. The state budget is about $6.2 billion with a whopping reserve of well over $600 million or 11% of the total budget. Many have felt the state is over reserved and if push comes to shove and it has to dip into reserves to keep the checks flowing it won't be the end of life as we know it. . .

The state was anticipating about $285 million in "new money" for the budget year that begins July 1, 2015. When the first leg of the oil bear market came down that was adjusted to about $200 million. If this new plunge to the mid 60's sticks around (some oil prices are hedged to the mid-90's and the price crash won't effect that for a number of months) you could see another $100 million lopped off. That would leave $100 million in "new money" for state government operations, about 1.6% and a bit less than the inflation rate. That's no fun. . .

So here we are with the budget hawks about to take flight and warn that the state just can't afford to "throw more money around" to address the myriad of social problems that have grown worse during the long stagnation and keep the state last or near last in the rankings. . .

The oil bear, Federal budget cuts and sluggish growth in tax collections because of a dormant economy is the three legged stool the Roundhouse now sits upon. . .

WHAT IF?

It makes for a good game of "What If?" As in what if the state had gone easier with those pre-Martinez personal income tax cuts for high earners? What if that quiet cut in the capital gains rate had been put on hold? And what if the 2013 Legislature had held its fire on cutting corporate income taxes in a state that is home to few large corporations?

Meanwhile, the stock market continues to set record highs which means the state's enormous Permanent Funds--heavily invested in stocks--will soar toward the $15 billion mark and then past it. That horn of plenty in the face of continuing economic pain is New Mexico's enduring irony in the 21st century.

PEARCE PLAY

Oil, of course, also permeates the state's politics and we see that as the oil boys--including southern NM GOP Congressman Steve Pearce--start touting the candidacy of Debbie Weh Maestas to become the next chair of the state GOP. Says Pearce:

I am quite impressed by her work ethic, experience, and innovative ideas. She has been involved in politics for many years and knows how to run a tight ship.

Former GOP Chairman Harvey Yates, Jr., an oilman like Pearce, is also endorsing Maestas.

The state GOP central committee meets Dec. 6 to pick a new chair. Also running are Rick Lopez, chair of the Torrance County GOP and political consultant Max Barnett.

HILLARY CLUB

Enroll ABQ Dem US Rep. Michelle Lujan Grisham in the Hillary club. She joins Dem NM US Senator Martin Heinrich in getting aboard the Hillary bandwagon even before she makes an official announcement for the Dem presidential nomination. Grisham recently lent her name as a "special guest" for a DC fundraiser for the Ready for Hillary PAC.

Clinton was thought to be the no-brainer pick for the 2008 Dem prez nod but along came Barack Obama. She is again being painted as a shoo-in for 2016. Is she? Or will we see how adept Heinrich and Grisham are at ship jumping if and when the time comes?

PASSINGS

Pat Baca

We note the passing of two well known names in state politics--former ABQ City Councilor Pat Baca and Sam King of the famous King clan.

Baca, 87, was elected to the council in 1974, the year the city instituted the modern council/mayor form of government. He had a 39 year career in education as a teacher and principal. In 1989 Baca, a Democrat, ran for mayor and lost to Louis Saavedra.

Sam King also died over the holiday weekend. With fellow rancher brothers Don and Bruce they formed a political powerhouse that saw Bruce King serve longer as governor than anyone in state history. His nephew Gary King was the 2014 Dem Guv nominee. For decades Sam and his brothers entertained the state's political community with their early morning coffee klatches at El Comedor de Anayas in Moriarty. Sam King was 92.

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 (c)NM POLITICS WITH JOE MONAHAN 2014. Not for reproduction without permission of the author