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Friday, March 10, 2017

Mayoral Mechanics: 14 At The Start But Far Fewer At The Finish  

This column is also running in the ABQ Free Press.

There are 14 candidates registered to run for the 2017 Albuquerque mayoral race but political pros have already narrowed the field to three or four candidates who they see as having a realistic chance at replacing Mayor Richard Berry who in December will finish his final term in office.

The open seat has drawn a diverse batch of candidates but most are not positioned to either qualify for the ballot and/or raise the necessary funds to conduct a professional campaign. It's easy to toss your hat into the ring but to actually get in there and duke it out takes much more than that.

The first hurdle to cross for the would-be mayors is collecting 3,000 valid signatures from registered city voters. The key word is valid. Many of the signatures collected will be from persons not registered. Consultants say a candidate will need to get about 5,000 signatures to make sure they get the 3,000 valid ones that will guarantee them a place on the October 3 ballot.

The signatures are due April 28th and although the hopefuls would have had over two months to get them, it is a sure bet that multiple candidates will fail. That field of 14 will shrink dramatically. If more than five or six manage to qualify, it will be a surprise.

Now of that half dozen that might get enough signatures the next obstacle is getting the money to run an effective campaign. Mayor Berry spent nearly $1 million in 2013 in his successful re-election effort. A candidate for this open seat won't need that much, but if you're not raising in the neighborhood of $450,000 you risk being outspent and drowned out.

What about public financing, you might ask? It may not be widely known but qualifying for such financing under city rules is extremely difficult and practically impossible for a person without a large and efficient organization. In order to qualify for $379,000 in public financing (about a dollar per registered city voter) mayoral wannabes must collect qualifying donations. Those are $5 contributions from 3,802 registered voters due April 1. Can you imagine doing that and having to rely on mostly complete strangers?

It seems a safe prediction that State Auditor Tim Keller will be the only candidate seeking public financing who will manage the feat. The other 7 who are trying have little experience and organization. Their chances of qualifying are about as good as the Lobos making the Final Four. They will have to make a decision on whether to stay in the race and that assumes they will be able to get those petition signatures.

Who are the handful of candidates who will likely dominate the stage after April 28 when the mayoral petitions are due? In no particular order they are the aforementioned Keller, former NM Democratic Party Chairman Brian Colón and Republican City Councilor Dan Lewis. Not only should Keller qualify for public financing but expect a political action committee (PAC) to form on his behalf that could raise significant money and enable him to match the financial muscle that Lewis and Colon are expected to flex.

Lewis is backed by the majority of the Republican establishment, with GOP Bernalillo County Commissioner Wayne Johnson playing the role of thorn in his side. Lewis can be expected to raise north of $500,000, given the expected support of the oil industry and other Republican interest groups. Colón is an accomplished fundraiser and has to be eyeing that same amount, if not more. Former Democratic Bernalillo County Commissioner Deanna Archuleta was the first to announce a mayoral bid. Her fund-raising totals will be closely watched to see if she can break into the first tier of candidates.

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Thursday, March 09, 2017

Early Childhood Amendment A Go In House But Senate Is Still Sty In The Eye, Plus: Guv And Dems Rush To Embrace Harper Tax Plan As Part Of Budget Deal, But Big Questions Surface 

Once again the state House has approved a constitutional amendment--37-32--that would let voters decide in 2018 if they want to tap about $150 million a year from the state's $15 billion Land Grant Permanent School Fund for mostly very early childhood education (ages zero to five).

As in years past the debate ran along familiar lines, with Dem Reps. Moe Maestas and Liz Thomson arguing that a focus on very early education would disrupt decades of failure that have put the state in the cellar in child well-being and poverty rankings. Republican Rep. Dennis Roche claimed that tapping the fund would "mortgage our future."

The argument that carried the day pointed to a study by Dr. James J. Heckman of the University of Chicago putting the rate of return on investment in early childhood education at 13% annually. A Dem spokesman saying: "Children who benefit from early childhood programs have significantly better life outcomes in education, health, social behavior, and employment. They are more likely to graduate from high school and college and they are less likely to be involved in crime. It is a moral imperative that we invest in early childhood education now.”

The surprise this year was a Republican representative voting for the amendment--Yvette Harrell of Alamogordo.

The sty in the eye for the amendment is Senate Finance Committee Chairman John Arthur Smith. He isn't budging in his opposition but advocates are still prepping for a last minute push in the Senate with the legislature set to adjourn March 18.

BIG QUESTIONS

Legislative leaders might want to pay attention to this as they (and Gov. Martinez) rush to embrace legislation from Republican Rep. Jason Harper that would eliminate dozens of exemptions to the state's gross receipts tax. Martinez and lawmakers have discussed incorporating it into a budget deal.

Harper has agreed to back off on the most controversial part of the legislation--a reinstatement of the tax on food--and that has a lot of legislators looking the other way on other provisions of this big tax overhaul--HB412.

The bill passed the House unanimously late last night and now moves to the Senate. Here from the Roundhouse is in-depth Alligator analysis for Gov. Martinez and Dem Senators Smith and Cisneros in particular to mull over. The bill may actually increase taxes:

I am positive that no House member except for Harper has read the bill (over 300 pages) or even considered its implications. HB 412 tries to expand the gross receipts base by eliminating most of the GRT deductions, exemptions and credits currently available, which should in theory reduce the state and local rates. 

However, the bill also tries to eliminate most business-to-business pyramiding by allowing a deduction from gross receipts for most services businesses purchase. Nobody in the state knows exactly how much this will actually cost, and the kind of analysis needed to get a reliable number will require an economic modeling study. The entire bill relies on data generated by a "Tax Simulator" which has never been reviewed for accuracy by any independent person. The biggest potential revenue-raiser, reimposing the tax on the sale of food, is no longer in the bill. Coupling the anti-pyramiding provisions with not taxing food means that the state and local tax rates could actually increase.
Rep. Harper

The bill does not set a tax rate. Professional state economists will be charged with figuring this out prior to July 1, 2018. The idea is that the gross receipts base will expand, allowing for the state and local rates to be reduced. Instead of the legislature setting a rate, economists in the executive and legislative branches will set the rate. This is probably an unconstitutional delegation of power by the legislature to unelected state employees. 

 Local tax rates will be set by the economists using a similar estimating methodology. But without actual data or a professional dynamic study, there is no way of knowing what will happen. This is not the best way to recruit businesses to New Mexico. Companies looking to locate here won't even know what the sales tax rates will be next year until a few months before they go into effect.

In the original bill, the fiscal impact report estimated that the effective state tax rate could be reduced from anywhere between .12% and .9%, with a corresponding proportional reduction being made to local rates. However, that bill included the repeal of the deduction of food receipts from gross receipts, which the new bill does not do. When the legislature enacted that deduction in 2004, economists estimated that the net result of that deduction equaled a rate increase of .5%. (They significantly underestimated the cost of that deduction, resulting in more than $1 billion in unexpected foregone revenue since then.) So, using simplified math, we can add .5% to any new state tax rate. That means the new effective tax rate will be between 3.78% and 4.56%. Note that the upper end of this estimated rate is actually much higher than the current effective GRT state rate of 4.16%.

The impact on local governments has not been studied. In theory, on average, municipalities and counties should get the same amount of money they have been getting, but there is no guarantee that they will. The bill sets up a local government fund to offset any losses, but that fund only gets money distributed to it if the state realizes extra revenue from the changes.

Th rush job on the Harper bill reminds us of another one in 2013 when a "bipartisan" coalition rammed through a corporate income tax cut at the last minute that was barely studied and has ended up costing the state much more than expected and did not deliver on its promise to attract more jobs. How about a well-thought out overhaul of the state tax mess, instead of an ad hoc approach that appears to be stacked?

GOIN' TO TOWN

Suddenly, GOP southern NM Congressman Steve Pearce can't get enough of town hall meetings. This Saturday in Hobbs he will hold his second, after an initial outing last Saturday in Ruidoso. The meetings come on the heels of criticism of Pearce for initially shying away from what can be a volatile format in the age of Trump. However, Ruidoso and Hobbs are pretty friendly areas for Pearce. We don't see him doing one yet in Las Cures, the most liberal area of his district and where the event would be rowdy for Pearce, a possible '18 Guv candidate.

APS SCREENING

More about that radio program APS held last night to get public input on possible APS budget cuts but screened questions from listeners instead of having them directly question school administrations on-air. That drew criticism here and is responded to by APS:

We've lost count of the number of public meetings we’ve held this year to discuss budget. Those meetings are all open to the public and not limited to any one topic. The meeting dates are posted to APS.edu. As far as “screening" calls instead of taking live-calls, KANW doesn’t have the equipment to execute a live radio call-in show. Station manager Michael Brasher notes this is the first call-in show of this format KANW has tried. The equipment needed to support a call-in show carried a $2,600 price tag. An argument can be made that $2,600 is peanuts to spend on transparency. Maybe, but we’d also be criticized had we spent funds earmarked for the classroom on a radio show to discuss cuts.

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Wednesday, March 08, 2017

The Santa Fe Disconnect: While State Fades Gov. Frolicks On Ski Slopes And Falls; Legislature Amuses Itself With Chile Burgers And Dancing 

Let's dance!
The isolation and disconnect of New Mexico's political class from the everyday world of the citizens they represent scaled new heights as the 60 day session neared its climax next week.

There was Gov. Martinez, not even at the session but instead frolicking in the snows of Utah with fellow GOP governors, injuring her knee on a ski slope. Then there was the House and Senate chuckling away as they "debated" proposals to proclaim an official state dance, to make the green chile cheeseburger the state's "official burger" and to beat Colorado in having the first chile license plates. And to add to this dysfunction, the cabinet secretaries for education didn't show up  at a hearing of the Senate Finance Committee to talk about the budget crisis.

Even as this nonsense played out chatter continued about cutting the public schools budgets even more, oil prices remained flat providing no relief from the ongoing budget crisis and the state set a new record for the low percentage of its workforce actually in the workforce.

Gov. Martinez emerged from her ski trip to threaten a special legislative session to craft a  budget because of the frittering away of time by the "meaningless"' measures that the legislature was entertaining. But to show you how screwed up things are in Santa Fe, that threat from Martinez came before the news came out about her own AWOL behavior in Utah. The high ground she sought immediately collapsed into a sinkhole.

And so it goes at the fabled Roundhouse. The new realities of this century are meeting the old ways of governing and colliding. The state has long ceased being a harmonious backwater where things were never great but not all that bad and where green chile, bizcochitos and blue skies were more than enough to see the citizenry over the rough patches. But the legislature, despite a number of hardworking guys and gals, doesn't get it and that applies doubly to the leadership and the Governor. And that's why educated citizens are fleeing rather than fighting.

The mainly comfortable class that populates the 112 seats at the Roundhouse may be in need of a shake-up. We've never been a fan of having a full-time paid legislature but it may be the only way of bringing to the capitol more folks who have a grip on the immense challenges facing us and the real state of the state.

OPERATION RESCUE

The Democrats can still rescue this session and justify their retaking of the House majority and adding more Dem seats to the Senate last November. They could finally pass the constitutional amendment asking voters to tap the $15 billion Land Grant Permanent School Fund for very early childhood programs. They could finally pass a sensible cap on payday loans--and not the still outrageous 175 percent cap that is being labeled a "compromise." They could have Senate Finance Committee Chairman John Arthur Smith quiet his threats about more cuts to the public schools and have him draw a line in the sand and say he will not stand for more cuts.

There's not much Mr. and Mrs. New Mexico can do at this point but wait and maybe have one of those official green chile cheeseburgers and tap out the steps to "La Marcha de los Novios," apparently the soon-to-be official state dance. They certainly deserve a break from watching the Roundhouse follies.

MORE DISCONNECT

It's not only Santa Fe, politics at many levels is disconnecting  from the public. The top administrators of the ABQ Public Schools will host a call in show tonight at 6 p.m. on KANW- FM 89.1 to discuss the budget crisis and its impact on APS. But "screeners will field phone calls and write down the questions." That's a new twist. Why not just use a seven second delay to avoid any obscenities and face the music--and the public--over the crisis?

GOP Congressman Steve Pearce tried a similar approach when he refused to have a public town hall and instead had a telephone town hall." After heat was applied he relented and faced the public--and the music over Trump--at a Ruidoso town hall.

Longtime APS critic Ched MacQuigg relished this one falling into his lap and wrote on social media:

. . .The senior-most APS leadership refuses to just sit down and just answer legitimate questions candidly, forthrightly and honestly; Once again they sidestep open and honest two way communication between the leadership of the APS and the community members they serve. There is not one of them willing to be held accountable to the same standards of conduct and accountability they establish and enforce upon students. There is an ethics, standards and accountability crisis in the leadership of the APS.

We don't know about an accountability crisis, but surely the administrators could stand in the kitchen for an hour or two and take some heat. 

THE BOTTOM LINES

We blogged Tuesday that Medicaid recipients in the state total "over 900,000." The AP says it's "nearly 900,000." Of course, the way Medicaid is growing we could be over 900,000 by the time you read this.

This is the home of New Mexico politics.

E-mail your news and comments. (jmonahan@ix.netcom.com)

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Tuesday, March 07, 2017

DC R's Set Date For New Mexico Medicaid Time Bomb To Go Off, Plus: ALot Of Folks Don't Work Around Here And Amazon Makes Santa Fe's LifeEasier 

Speaking of the Medicaid time bomb as we are prone to do on occasion, here's the bottom line on the news out of DC Monday. The coast is clear but only until 2020. The R's proposed legislation to dismantle Obamacare will mean Medicaid will continue to insure current patients and add new ones, but come 2020 the expansion would stop. Considering it is billions of Medicaid dollars flooding into the sate that have provided the bright spot in the mostly dreary employment stats, that is sour news indeed.

About 900,000 of the state's roughly 2 million residents are now on Medicaid which insures primarily low income households of which we have plenty. But if the DC legislation passes in its current form the party is really over for New Mexico on Jan. 1, 2020:

After that, states adding Medicaid recipients would no longer receive the additional federal funds the statute has provided. More significantly, Republicans would overhaul the federal-state Medicaid program, changing its open-ended federal financing to a limit based on enrollment and costs in each state.

While that was crossing the crowded blog desk, we received this from the bean counters over at  NM Workforce Solutions. In their latest forecast for state job growth for the years 2014 to 2024, they say healthcare will be the fastest growing sector, with employment growth at nearly 23 percent. But if Medicaid is going to be scaled down, they might want to do some recounting of the beans.

Some days one thing flows into the other. Monday was like that as we received more confirmation of the welfare state that has taken a mighty hold here since the Great Recession/Stagnation/Depression/Depopulation:

According to the Bureau of Labor Statistics, North Dakota had the highest employment–population ratio among the states in 2016, with 69.2 percent of the civilian working-age population employed. West Virginia had the lowest ratio at 50 percent. New Mexico at 53.7 percent recorded its lowest employment–population ratios since the series began in 1976. The employment–population ratio is the proportion of the civilian noninstitutional population 16 years of age and over who are employed. The ratio for the country as a whole was 59.7 percent.

Well, work is vastly overrated anyway. Look at the Legislature's first 50 days of its 60 day sessions. They get it.

Is conservative reader Jim McClure writing with a bit of sarcasm when he opines on jobs in our enchanted land?:

Joe, the home builders’ strategy to attract retirees that you reported on makes more sense than the pipedream of creating high-end jobs and attracting millennials to fill them. . . Attracting seniors requires no change to New Mexico’s established institutions. Retirees don’t need schools and won’t demand that educators teach children to read. They will spend money in our stores and restaurants, but don’t need jobs and won’t start businesses. Retirees will create jobs that match the capabilities of New Mexico’s workforce: restaurant servers, house cleaners, landscapers, security guards and caregivers. They don’t need commuter trains or fancy buses and will not generate rush-hour traffic. Best of all, an influx of retirees will stimulate construction of new subdivisions and communities. Gated, of course.

Jim, we need to talk to you about our idea for green chile laced prune juice. We could make a mint.

A LOT EASIER

Amazon just made it a lot easier for the Governor and the legislature to raise about $40 million in badly needed new revenue each year. That's how much the state may realize from taxing Internet sales. Amazon's announcement that it would start doing just that in New Mexico come April 1 seems to assure passage of that part of the budget package that is being negotiated in Santa Fe. That's $40 million down and about $150 million to go. . .

THE BOTTOM LINES

Reader Jeffrey Paul writes on social media about how he is preventing his house from getting robbed in crime-ridden ABQ:

I've taken out my home alarm system and de-registered from the Neighborhood Watch. I've got two Pakistani flags raised in my front yard, one at each corner, and the black flag of ISIS in the center. The local police, Sheriff, FBI, CIA, NSA, Homeland Security, Secret Service and other agencies are watching my house 24/7. I've never felt safer, and I'm saving $24.95 a month.

Hey, Jeffrey, forget that green chile prune juice idea we were going to serve up with McClure. We've got to talk flag marketing with you--and fast.

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E-mail your news and comments. (jmonahan@ix.netcom.com)

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Monday, March 06, 2017

Martinez Approval Still Weak But She Still May Get Way On Budget;, Plus: Higher Ed Secretary Shies Away From Sweeping Reforms But Others Don't, And: Pearce Evens Up Optics With Grisham  

Gov. Martinez's long lame duck walk continues. Her latest approval rating in the PPP poll is 42 percent, the same as in the Research and Polling survey last September.

The PPP poll, which is run by Dems, also says 57 percent of respondents "disapprove" of her performance. But that would mean only one percent are undecided about her. The liberal group ProgressNowNM, which commissioned the poll, says the extremely low undecided is because the electorate is more polarized under Trump. However, Research and Polling showed 14 percent undecided about Martinez. The Gallup Poll on Trump has been showing an "undecided" response of 5 to 8 percent.

The good news for Martinez is that she may have hit bottom. The bad news? Getting back to 50 is not in the cards.

POLICY IMPACT

As for Martinez's low approval number impacting public policy, Democrats don't seem to be making much hay over it. The senate did pass a ten cent a gallon boost in the gas tax to fund government as well as an increase in the minimum wage. But the state's three major cities have already approved minimum increases so there's not much firepower there. As for the gas tax, they don't have  have the votes in the senate to override a Martinez veto.

(ABQ's minimum wage is $8.80. Santa Fe is at $11.09 and Cruces at $9.20. The statewide minimum is $7.50 and hasn't been raised since '09.)

The minimum wage debate throws a little bone to the Dem base but the issue is not motivational for most of them. With the Senate's Democratic fiscal conservatives still given reign over economic policy it is impossible for the Democratic Party to advance a full-fledged economic program that distinguishes them very much from the Republican Governor.  Senate Majority Leader Wirth and House Speaker Egolf signaled early on they were not going to tamper much with the status quo and they've been good on their word.

NO NEW TAXES

Unsurprisingly, it appears Martinez is going to prevail on her pledge not to raise taxes, a plank that keeps her in good standing with her political base and from plunging even more in the polls. Here's the deal that's brewing, according to longtime Senator Minority Leader Stu Ingle:

The final package will probably include a tax on out-of-state internet sales, a rollback of contributions to local governments, an increase in fees on heavy trucks, and the expansion of the state gross receipts tax to more health care providers. Ingle said a conversation he had with Martinez about 10 days ago indicated that she supports that approach, though neither side discussed specifics.

With less than two weeks ago, that's pretty much it for the budget in Session '17. There will be some intermittent drama but the cake appears baked: No veto overrides, little hair pulling by the majority Democrats and no big picture overhaul of the state's tax and fiscal policies.

If that package Ingle is reporting raises enough to cover the projected deficit and raise the cash reserves enough to avoid another downgrade of the state's bonds--and it appears it does--that will be more than enough for a legislature that has been worn down by the nonstop budget debacle and the stubborn Governor.

OVERHAUL OVER

As we blogged at the start of this session if there is going to be a serious overhaul of economic policy it will have to wait for a new governor in 2019. The Harper GOP tax overhaul being touted by conservatives is a nonstarter,. It does not address the fundamental problem of raising recurring revenue to finance government operations, including the public schools.

That doesn't mean under the next Governor there will be a major overhaul and that the kick-the-can budgeting will finally come to an end. It just means that if there is to be one it won't be until 2019.

HIGHER ED AHEAD

NM Secretary of Higher Education Barbara Damron surprised some when she shied away from calling for a broad consolidation of the 31 colleges and universities in the state, a number that is clearly too many for our stalled out state.

Damron, who has been mentioned as a possible future UNM president, said the solution is to centralize authority over the many campuses, not consolidating or closing them. But acting UNM President Chaouki Abdallah is more bold. When asked by newsman Chris Quintana if the current higher ed model was sustainable, Abdallah remarked:

You want a one-word answer? No. But I don’t think it’s sustainable across the U.S,

Abdallah suggested that consolidating the state’s higher education system would probably be beneficial in the long term for the state, though in the short term it could disrupt local economies.

Damron says she will come with a "strategic plan" for the higher ed crisis in September, but that plan may be destined to gather dust unless she does more than tinker with decentralization and ignores downsizing.

Meanwhile, enrollment at the multitude of campuses is eroding dramatically. We now have 131,000 higher ed students compared to 155, 000 in 2010. Clearly something has to give. Resistance to closing any institution will be fierce. Secretary Damron has decided to avoid that battle in her short time left but the Great Downsizing that has followed the Great Recession will not be denied. As President Abdallah said the current mode is unsustainable.

PEARCE OPTICS

It was a short-lived optics win for Dem US Rep. Michelle Lujan Grisham over GOP Rep. Steve Pearce. The southern congressman and possible '18 Guv candidate was heavily criticized when he opted out of holding a town hall meeting in today's volatile environment. Instead he went for a telephone town hall. Meanwhile, Grisham, an announced Guv candidate, held a town hall that garnered wide notice. But over the weekend Pearce reversed course and threw open the doors of the Ruidoso Convention Center for a town hall that attracted over 300, (albeit a lot them protesting Democrats) along with ample media coverage.  Pearce may not be officially in the governor's race with Grisham, but he's acting as though an entry may be around the corner.

This is the home of New Mexico politics.

E-mail your news and comments. (jmonahan@ix.netcom.com)

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(c)NM POLITICS WITH JOE MONAHAN 2017
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