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Friday, September 23, 2016

Foe Of Senate Leader Sanchez Gears Up And Burrowing Into The Budget Crisis 

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Here he is. Belen attorney Greg Baca, hoping to take on the role of giant killer this year and defeat Gov. Martinez's archival, Senate Majority Leader Michael Sanchez.

This piece touting Baca's military service is part of putting a positive halo on the GOP challenger before waves of anti-Sanchez attack ads pour into the district financed, like this piece, by the AdvanceNM Now PAC, an arm of the Guv's political machine.

But the machine may need an oil job because once again as the action heats up it starts to leak. This AdvanceNM strike on an ABQ state senator is an example:

In what might be the election season’s most convoluted attack ad, a conservative political action committee (Advance Now) is using a liberal group’s criticism of the Republican governor to condemn a Democratic state senator. The ad’s target, Sen. Daniel Ivey-Soto, D-Albuquerque, describes it as “the governor’s PAC criticizing me for agreeing with the governor.” The flier’s central claim — that Democrats are attacking Ivey-Soto for his support of a law on public access to streams — is simply false.

Come on, Jay. You can do better.

Back on Senate Leader Sanchez, what if the long shot upset were to occur and he was defeated but the Dems, as expected, hung on to control of the Senate? Who would be the new majority leader? The consensus pick is Santa Fe Sen. Peter Wirth who sports more liberal stripes than Sanchez.

As for the week's big political development, the Guv's announcement that she will ask the special budget session of the legislature to veer off course and consider reinstatement of the death penalty for child and cop killers, a Santa Fe Dem state rep comes with the argument that might resonate with voters some:


Matthew McQueen (@mcqueenfornm9/21/16, 1:32 PM
Why doesn't the Governor wait just 4 months so the death penalty can be carefully considered during the 60-day session?. . . 

HERS TO LOSE

Cutting through all the noise and some distorted polling, Nate Silver of FiveThirtyEight pegs the chances of Hillary Clinton carrying New Mexico over Trump at 79% to his 19.5%. And that's why the presidential campaign in NM can't be spotted by even the most powerful radar out at Kirtland.

BUDGET BURROWING

Bruce Krasnow
This next one has been bugging us as well as a number of our bean counter readers. Why are we getting different numbers on the state budget deficit from our leading news organizations?

ICYMI, the ABQ Journal reports the leftover deficit for the budget year that ended June 30 is $131 million but the AP and the New Mexican put it at $220 million, For the current budget year the Journal says the deficit estimate is $458 million. The New Mexican says it "might be" $430 million.

No one has covered the budget crisis in more detail than the New Mexican's Bruce Krasnow so to try to clear this up we tapped into his well of knowledge.

Joe, The recent revenue estimate lays out the numbers--the August 2016 adjustments--say a $223 million for 2016 and $431 million for 2017, but the situation is not that defined. 

First off, the 2017 number on Aug. 24 was an estimate based on no incoming data for even one month into the fiscal year. That hard data didn't come until last week when the state sent gross receipts tax disbursements to cities and counties for July. So to report a precise number on what is essentially an estimate is probably not helping readers. . . 

Given the volatility of revenue the last two years, we know the estimates will change. In fact, the $431 million number already has changed, but economists haven't yet determined what that change is. Budgets in current spending years are always moving targets, so to report approximately $430 million or some $400 million or at least $400 million in stories is probably more accurate. . .

The 2016 deficit number should be more precise. The year is over and the money is already spent. What's so hard about counting dollars already out the door? The answer lies in whether one thinks the state can have a negative reserve. I have refrained from saying the reserve is negative. How can that be? Once an account hits zero, there is nothing left to draw from.

But in the world of general fund accounting, there you have it on page 13 of the August LFC report...."Total FY16 ending balances were $130 million; however, that includes $219 million in the tobacco permanent fund, which cannot be used without legislative authorization."

So the revenue estimate assumes the Legislature will tap into the tobacco money. Only then do we get above zero. Until then we are in the hole $90 million.

The public health advocates will say you can't legally take all the tobacco money -- the statute says the general fund can appropriate enough "to avoid an unconstitutional deficit."

Does "an unconstitutional deficit" mean they can take it all to both bring reserves back to zero and to move forward with a balance sheet that shows a small surplus, which would mean there is a $223 million shortfall? Or can they only take only enough to bring the budget into balance with zero reserves to close out 2016, which means a deficit of maybe $90 million?

Thanks, Bruce. The bean counters are in ecstasy over this debate, while the rest of us of work overtime to stop our eyes from glazing over. But we think we get it.

We would add that we reported this week that one of our legislative sources says using capital outlay money instead of the tobacco settlement money to address last year's deficit is now on the table.

And on that dizzying note, thanks for stopping by this week.

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