Friday, February 10, 2017

Leaving New Mexico Behind; Latest Numbers Confirm The Exodus Continues; Our Once Humming Sunbelt State Settles Further Into Economic And Social Stagnation 

This column is also running in the current edition of the weekly ABQ Free Press.

Well, better late than never. The newspaper finally got around to reckoning with the grim reality that New Mexico's population has flatlined, that those getting out are our best and brightest and the tiny population growth we are experiencing is from mainly impoverished and welfare dependent families having more children.

Now the reluctant experts and media are finally throwing in the towel. Perhaps we finally get a real discussion about what ails the state and what needs to be done to finally start the Great Turnaround instead of wallowing in the Great Stagnation? Reader Alan Schwartz, writing on social media, picks up on that thread:

Does this mean we can finally call to account our Pollyanna economic development gurus that constantly forecast 2% annual growth to justify taxpayer investment in speculative ventures from soccer stadiums to ART? The website for Albuquerque Economic Development states "The Albuquerque metro area's population totals 908,252 residents and is growing at a steady pace of 1-2 percent per year." Census figures for five years ending in 2015 for Albuquerque show 0.46% per year. Perhaps the first step to economic recovery should be to stop promulgating "alternative facts."

New Mexicos' growth industries are crime, drugs, unemployment and moving companies:

According to the Census Bureau, New Mexico added 59,585 people due to natural growth (births versus deaths) from 2010 to 2016. During the same time period, however, 37,780 more people left the state than moved in, resulting in a total population increase estimated at only about 21,000. The resulting 1 percent rate of growth puts New Mexico at the other end of the spectrum from its neighbors.

It's easy to abandon ship. Colorado, Texas and Utah are growing at a 10 times faster rate than New Mexico. David Packer is one of those packing up. He writes on social media of the New Mexiodus:

My kids will leave soon after finishing degrees at UNM. I plan to leave soon after they figure out where they want to be. NM was an attractive, vibrant place of such promise, but so much of what it lost was replaced by too many who lost their souls to substance abuse and now run rampant on our streets. NM is now just too scary and dangerous a place for its magnificent beauty to be enough to keep us here. 


Meanwhile, at the legislative session lawmakers continue to look at the state's death spiral with bemusement or not at all.

The Governor deflects any responsibility for the state's failures by citing cutbacks in federal spending and the oil price crash but she continues her austerity policies that have done nothing to ameliorate the outside events that have pummeled the state. The legislative leadership essentially acquiesces, with both sides braying that they are "fighting" for New Mexico. No, they are surrendering.

New Mexico's problems are anything but insoluble. They require an investment in its increasingly disadvantaged people. To get that you will need a new generation of leadership that views their jobs as taking risks to reverse the old order and rejecting the notion that political office is more than taking self-important selfies and warming a chair.

The cozy talk of "bipartisanship" was promising but has now become an excuse to do nothing and let everyone off the hook as the death spiral continues. What we need is leadership that engages in a knock-down, drag out fight over the tarnished soul and bleak future of New Mexico. In other words, we can continue to fill the void with more green chile contests and photos of blazing sunsets or choose to have a collective consciousness that says enough is enough. It's up to us.

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Thursday, February 09, 2017

Facebook Vs. Intel Jobs; It Isn't Even Close, Plus: Luring Susana; Is Closing A Loophole A Tax Hike Or Not? And: R's Missing The Target On Their Targeted US House Races? 

So we'll get about 50 permanent jobs from Facebook while just across the border at Chandler, Arizona Intel is taking a plant out of mothballs, investing $7 billion and hiring 3,000.

Once upon a time New Mexico was home to a booming Intel but for years it has been reducing jobs at its Rio Rancho plant. The last report we saw from April of '16 had the Rio Rancho facility employing only 1,900, down from well over 6,000 not that long ago. The number is probably much lower but Intel has stopped announcing it and the media has stopped asking. And that's how a manufacturing base just fades away (maybe some of the Rio Rancho Intel workers can make the short drive to Chandler?). . .

If they call it a tax loophole will Susana take the bait? That seems to be the ploy by both Dems and R's who are lined up in favoring of extending the state's gross receipts tax to big Internet players like Amazon and eBay. Currently only companies that have a physical presence in the state are subjected to the tax. But even the R's say that's unfair to the locals and extending the tax to all online sales would "be closing a loophole" not a tax boost.

The extension has won approval with bipartisan support from one House committee. They're trying to lure the Guv with that, but she has repeatedly said no tax increases under her watch. Besides, why does the Governor, who still probably wants to prance around the national stage in some form when she finishes her term in two years want to alienate big players like Amazon? We'll see. . .

Perhaps Susana can play with the new US education secretary as we expect top education boss Hanna Skandera to do soon. Take a look:

Michigan billionaire Betsy DeVos, along with family and companies associated with her, donated at least $12,000 to Susana Martinez’s campaign for re-election in 2014. Fast-forward to 2017 and DeVos became Donald Trump’s surprise nominee to head the US Dept. of Education and Martinez stepped in to help. On January 4 Gov. Susana Martinez‘s name appeared on a letter of recommendation for Betsy DeVos published in the Investor’s Business Daily – a magazine for business leaders, not educators.


Sen. Cervantes
We've talked about capital outlay and how it is desperately in need of reform. We've also carried comments from readers and State Auditor Tim Keller that unspent millions in capital outlay are still out there that could be used to plug the budget hole. Las Cruces area Dem state Senator Joe Cervantes responds:

Using fund balances and unexpended capital outlay provides a one-time and one year solution. But our budget needs for education are “recurring.” The blog suggestions to use capital outlay for funding current and recurring expenses would be analogous to taking a 15 year second mortgage on your house in order to buy groceries and pay utilities for a few months. It can be done, but is very poor financial judgment. For two years I have sponsored legislation to sweep up and reauthorize stale dollars, but would do so for alternative capital projects shovel ready. I have also introduced SB262 to reform the capital outlay process. But relying on capital outlay for recurring needs is shortsighted.

Our take: It's true that the capital outlay and other funds mentioned by Keller are for the most part "nonrecurring" which means they would be good for a year or two of plugging the budget. But with a Governor who wants no "revenue enhancement" at all, what's the choice? Should we shorten the school year because it would take nonrecurring revenue to prevent it? Most parents would say use whatever money you can find and deal with the long term funding later. Of course that is shortsighted but it is political malpractice of the highest order to shorten our kids' school day and school year when tens of millions of unspent dollars are there to prevent it.

As for Senator Cervantes' bill on capital outlay reform, it is co-sponsored by State Rep. Kelly Fajardo and can be seen here.


The national R's are out with their list of congressional seats they're "targeting" for 2018 and it stretches credulity. They say the northern US House seat held by Rep. Ben Ray Lujan is on their list as is the ABQ congressional seat being vacated by Rep. Lujan Grisham who is running for Governor. The problem is that the northern seat is one of the most Democratic in the nation and also happens to be held by the head of the Democratic Congressional Campaign Committee--Ben Ray Lujan---who is in charge of drafting a list of Dem targeted House seats. As for the Grisham seat, that's pretty much a goner for the R's. Once upon  at time they called it a swing seat, but its been Dem since 2008 and heavy Dem in the last two cycles. Don't be surprised if the two NM "targets" don't see any GOP cash thrown at them when the races really begin.

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Wednesday, February 08, 2017

More From The Education Beat: APS Board Members Who Oppose Governor'sAgenda Win Re-election in Landslide, Education Secretary Skandera Getsa Meal Ticket Out Of Here And Whipping It At The Roundhouse 

David Peercy
We've been on the education beat all week and we're not stopping yet. The Governor and the newspaper have been hammering the ABQ School Board and hoping that last night voters would reject incumbent board members David Peercy, the board president, and Lorenzo Garcia. Instead the duo won re-election in a landslide, an affirmation of their resistance to the Martinez education agenda. (Congressman Steve Pearce did robocalls for tea party friendly candidates and also took a hit with the results).

Peercy was scoring about 64 percent in a four way contest, a landslide if there ever was one. And Garcia was no slouch either, garnering 65 percent of the ballots in another four way battle. Now if they can only avoid having to end the school year early because of state budget cuts. . .

(Complete APS board and CNM election results here.)

It was close but Hanna Skandera's meal ticket outta here appears about to be served. The US Senate confirmation of the controversial Betsy DeVos as education secretary Tuesday paves the way for Skandera to head for the exits and to a nice plum post in DC.

DeVos is a longtime Bushie and Hanna's coziness with the family is well-known. She served as an education deputy under Florida Gov. Jeb Bush. Skandera has reportedly already been approached about a job by the new administration.

After six years here Skandera is now in the unenviable position of presiding over withering cuts to the state's public schools, accompanied by jarring talk that the school day and/or school year could be shortened because of Santa Fe's inability to find a budget solution. If that doesn't signal a good time to join the exodus out of here, nothing does.

Reader Melanie Majors drives the point home:

I know of several long time teachers who are counting the days until retirement because they can no longer subsidize their classrooms, deal with no raises, extra costs to their salary and more requirements from Santa Fe. A lack of money is hurting education. The legislators should put a crow bar into the permanent fund and spend some of that money to improve this state. If they wait much longer, there may be nothing left to save.

And reader George Richmond has an idea that won't be adopted but you can bet it would work:

If  just one local school board would say the state cuts to their budget are okay but then says their top priority is education and that means all sports programs will be eliminated, the resulting outcry from parents and legislators would "find" the money to avoid the cuts.

Back on the DeVos vote, opining on social media Barbara Grothus summed up why the nomination was met with such firm resistance:

That giant sucking sound you hear is the money going from the public purse to the private pockets. America will never be great without public education.


Reader Barry Simon commented here Tuesday on the boatload of money sitting unused in state accounts. That drew this response from State Auditor Tim Keller:

We’re encouraged by your readers’ interest in our reports on unused funds sitting in state government. It is the “Myth of Scarcity” that tells us that funding is scarce and we simply don’t have enough money for our most important programs, like education. Policymakers and the public know that our state budget is tight and distracts us from making structural changes in our government and economy. Just last week, we presented this information to house and senate committees (watch it here).

Our research has found that we can rethink the status quo by examining three pots of money. The first area is utilizing over a billions dollars sitting in fund balances in 300+ accounts, as Barry noted in his comments. Our reports are compiled from government’s own public audits and are provided to the legislature and Governor each year. Readers can also find an op-ed on it here.

While we might not be in a situation of abundance, there is plenty of money out there to do what we need to help our state. Scarcity is a choice, a choice the administration makes every time they avoid tackling these big issues. Our state needs all of us to fight for capital outlay reform, pushing out under utilized funds out and oversight from the administration for infrastructure spending.

Our take: The LFC, the Governor and the legislature have simply not given enough of a response to Keller's argument on the myth of scarcity for it to be struck down or upheld. Where is the detailed response and suggestions from Santa Fe? Have the bean counters stopped counting the beans?


Here they are minus their whips but cheerful none the less. From left to right it's House Minority Whip Rod Montoya of Farmington House Majority Whip Doreen Gallegos of Las Cruces, Senate Minority Whip Bill Payne of ABQ and Senate Majority Whip Michael Padilla of ABQ. With more than a month left in the session, maybe they can whip something up besides more depressing budget cuts?

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Tuesday, February 07, 2017

Punishing The Public Schools; Budget Cuts Unpopular With Voters But Still It Goes On And On; Guv And Lawmakers Say Classroom Is Spared But Major Pushback Develops 

It may be becoming routine in Santa Fe to cut the budgets of the state's public schools but it's not going well outside of the Roundhouse bubble. The legislature and the Governor know that. They have seen the public polling that shows slashing the schools is the last place voters want cut to resolve the budget debacle.

But as we noted on our Monday blog Dems and R's alike have taken out the scalpel and like a surgeon seeking to calm his patient they insist none of this budget cutting is going to hurt. Everything in the classroom will be just fine So they say, but. . . .

We are getting a far different story from the schools and our readers. And it's not just from APS which for years has endured a near-hatred by the newspaper and the sitting Governor. From Las Cruces:

Las Cruces Public Schools is still trying to recover from last year's special session that cut $3.4 million from the district. LCPS has already cut back on instructional materials, traveling and bus routes to save money. That was done on top of an additional $3.5 million budget cut to the current fiscal year. A spokeswoman for the district said half of the district’s savings account is gone and the district can’t afford to hire new teachers. "It has a huge impact on the whole system and bottom line is it impacts classrooms. Anytime you have a cut as big as that, there's going to be a trickle down affect throughout the whole system." Less money in the school’s reserves could mean more students per classroom. 

The governor said her bill wouldn't have an impact on classroom spending. “This compromise represents responsible cuts that preserve classroom spending and maintain the quality of district programs for students and staff alike,” Martinez said.  KFOX14 asked the governor to elaborate why she isn’t concerned for schools in the state, but she wouldn’t answer the question. 


Dem State Senator Bill Soules who represents the Las Cruces area and was taken to task here Monday for the school cuts, counters:

Remember Joe, the Governor proposed $120 million in cuts for the current budget year. The legislature reduced that by nearly two-thirds and it was impossible for the legislature to raise more revenue in the last few months of the current budget year. to prevent the cuts. 

The cuts passed to date are definitely detrimental to NM students. Whether my bill providing flexibility for Districts on how to handle the impact of those cuts moves forward or not, those cuts are sure to hurt NM students. Districts need flexibility so those locally elected School Boards can be sure their credit ratings don’t drop and decisions on how best to handle those cuts can be made by officials accountable to their communities rather than appointed PED staff in Santa Fe.  

I am one of the legislature’s biggest champions of fully funding NM schools. I sponsored SB 35 calling for $368.5 million more funding in 2018. NM students should face no cuts in the 2018 budget! My fellow legislative Democrats are putting forth many revenue bills this session to make more funds available for a budget that does not hurt opportunities for NM student success.

But reader Barry Simon says the Democrats have been too passive in seeking to protect the public schools:

Joe, State Auditor Tim Keller says there is $2 billion in unused funding sitting in departments and agencies’ accounts. And yet the Dems are ready to cut school funding, not to mention services? Where is their outrage that money is just sitting in accounts unused? Where is Tim Keller’s voice since he’s the one going around doing presentations on this information? And where are the school districts and teachers’ union? They’re too busy talking about testing and evaluations to take their heads out of the sand and yell about unused billions of dollars. I just don’t get it and it frustrates the hell our of me. 

I have called my State Senator and Keller’s office. Response: nada. I even had a letter published in the Journal on this hidden-in-plain-sight money and there wasn’t one ripple in response. I’m going to a public meeting of my school board representative on Thursday and ask why APS isn’t screaming about cuts when there is money just sitting there. As Keller’s presentation states, “The Myth of Scarcity.”


Sen. Brandt
APS is making noise, Barry, if not screaming. But you're right--where is the outrage? The favorite excuse at the Capitol is for both sides to simply throw their arms in the air and exclaim, "We're broke!" That's not how it used to be as this retired Dem state senator who asked to remain anonymous, explains:

Joe, There are no "firebrands" in the Democratic Legislature. Few legislators have the  "fire in the belly" mentality that had always been pervasive in a vibrant New Mexico. During my tenure of 20 years in the New Mexico Senate, I heard magnificent speeches, fearless statements to do what was right. Legislators who took on the good fight. They were not there to just "get elected." Today we have passive representation that accounts for the "just being there" attitude. In my day, we would have dismissed the idea of "less education because of the budget." Instead, we would have done what was right.

And that's not just nostalgia although there are a few speaking out about the historic public schools budget cutting--GOP state Senator Craig Brandt for one

Brandt, R-Rio Rancho, said the state went too far in cutting funding to school districts this year. He noted that his wife is a teacher. “We have created a nightmare,” he said.

And, as reader Simon wondered, are the teachers unions and their leadership doing enough or have they become numbed by it all? John Dyrcz of the American Federation of Teachers NM comments on that bill that would lay down guidelines for shortening school days as well as the school year:

Regarding Senate Bill 290,  it is not accurate to state teachers' unions (at least in the case of American Federation of Teachers New Mexico) in any way supported this measure. In fact, we stood in opposition to it when it was first introduced, which led to it to include protections for workers under collective bargaining. We also opposed the bill even after it was amended to include protections for workers because it did not go far enough to ensure decisions would not adversely impact schools and educational workers. 

Focusing on SB 290 is perhaps misguided, and we in the education community would prefer to continue having the conversation about how we got to this point in education funding, and that issue falls squarely on the shoulders of Governor Martinez with her willingness to attempt a $120 million sweep of school funding and simultaneous clinging to rigid ideological opposition to identifying and raising new sources of revenue.

Dyrcz has the politics right. The last thing the Dems should be doing is shifting the narrative to a bill that centers on shortening the school year when they should be arguing that it is the Governor's stubbornness that could lead to schools shutting down early.


Finally on the education beat, more on the implications of all these cuts on the state's bond rating and standing on Wall Street from David Jacobson, VP for communications for Moody's Investors Service:

In its new Credit Outlook released Monday Moody’s notes the governor of New Mexico (bonds rated Aa1/negative outlook) has signed legislation that calls for a sweep of $46.1 million in operating cash balances, or an effective 2% reduction in state aid to school districts. . . and follows cuts approved in a special legislative session in 2016. The cash balance sweep and October cuts are credit negative and affect all New Mexico’s school districts, weakening already-limited financial positions. Based on our estimates. . . 10 districts will have less than 2% of revenues in reserve.

New Mexico school districts are not well positioned to weather funding declines, with virtually no revenue-raising capacity and limited expenditure flexibility. . . Although the state’s school districts may not be facing immediate default risk, any further deterioration in cash and reserve positions present a serious challenge to ongoing credit quality. 

Folks, we've told you before and we'll tell you again. Before this incredible era in our state's history is over you're going to keep seeing things you never thought possible. Like the trashing of the state's financial standing under the supposedly conservative leadership of a Republican Governor and Blue Dog Democrats and perhaps even a shutdown of the public school system.

Mr. and Mrs. New Mexico don't need to see any more budget books. They need prayer books to get out of this mess.

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Monday, February 06, 2017

First Third Of Legislative Session Goes Susana's Way; Lame Duck Governor Struts While Dems Limp 

The somewhat stunning capitulation by legislative Democrats on cutting funding for the public schools and perhaps even shortening the school year is the cherry on the sundae for Governor Susana Martinez as she looks back on the first third of this 60 day legislative session.

It has been an impressive start for a lame duck Governor who sports dismal approval ratings. She has dominated the Roundhouse and public narrative and even had the Democrats deliver a dagger to their own hearts.

Dem Sen. Bill Soules introduced a measure that would allow the shortening of the school day and school year to resolve the state budget crisis. Down the line support of the public schools and its teachers goes to the very core of Democratic Party principles but apparently not so much anymore. Even the teachers'' unions and school superintendents meekly appraised the measure and found merit in it. (This in of the worst educated states in the nation).

The old line says "we're not in Kansas anymore," but New Mexico could indeed soon be in that deep red state. Kansas, under the severe austerity and tax-cutting of a GOP Governor, oversaw the early closure of the schools there as state funds dried up.

That Martinez can push this hard and far in the aftermath of an election in which Democrats picked up two state Senate seats and regained control of the state House from the Republicans looks like political wizardry, but it is also due to a lack of strong Democratic leadership. Martinez's personality dominates the stage and she has no equal in her opposition.

Attorney Greg Payne, a former GOP ABQ state legislator turned Democrat and veteran political analyst, explains:

For many Democrats it is about 'being there.' They enjoy the status and the legislative perks and don't want to rock the boat. They are not as deeply attached to the working and lower income classes that were once at the party's core. That's why you are seeing once sacred budgets for the public schools subjected to cuts with barely a whimper and why the Democrats are comfortable acquiescing so readily to the Republican Governor. Trump's victory came because he reached many disaffected Democrats in the old Democratic Rust Belt states. There has been no similar populist figure here to ignite what was once the Democratic base. It floats on a sea of apathy and the Governor knows it. 

The Democratic leadership has weapons at its disposal but has kept them under wraps. They could send to the Governor revenue enhancement measures in place of cutting school budgets and force her veto and explanation. They could sweep more unspent capital outlay and/or other reserve funds into the general budget to at least temporarily avoid the school cuts. And they could work with the schools to find more savings that make clear education in the classroom is not being gored.

Our experts at the start of this session predicted Gov. Martinez and the Democrats would avoid a clash, but it would be the Democrats surrendering, not her. So far, they have nailed it.

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