Speaker Pelosi & Rep. Torres Small

Things are getting complicated for southern Dem Congresswoman Xochitl Torres Small and Dem insiders confess they're worried.

From DC to Deming Torres Small, positioned as a moderate Democrat, is under fire. In DC Torres Small appears to be running afoul of House Speaker Nancy Pelosi who Torres Small voted for. The Speaker is calling on her "moderate" caucus members to bite the bullet and stop playing footsie with the R's. And that includes Xochitl:

Speaker Nancy Pelosi (D-Calif.) took a hard line at the caucus meeting, saying that being a member of Congress sometimes requires taking tough votes. “This is not a day at the beach. This is the Congress of the United States,” Pelosi said, according to two sources. Pelosi also said vulnerable Democrats who had the “courage” to vote against the Republican motions to recommit would become a higher priority for the party leadership and the Democratic Congressional Campaign Committee.

Freshman Rep. Xochitl Torres Small (D-N.M.), who voted for the GOP motion on Wednesday, grew visibly emotional when speaking and pointedly said courage looks different to different people, according to two sources in the room.

Torres Small is in a deeply conservative district with the notable exception of liberal Dona Ana County that put her over the top in her defeat last year of Yvette Herrell, giving the D's the seat for only the second time in decades.

But it's her fellow Dems that Torres Small has to worry about in the early going--and not only Speaker Pelosi but also new Dem Governor Michelle Lujan Grisham. She is taking a hard line with southern conservatives opposing her positions on gun control, immigration and abortion. Her rough and tumble response to those critics has egged on 29 of the state's 33 county sheriffs who are getting major attention by opposing a package of gun control bills and even threatening not to enforce certain them, if passed at the legislature.

Herrell is watching and pouncing like a hungry hawk as she campaigns to win the GOP nomination in 2020 and have a rematch with Torres Small. Here she is firing both barrels at libs in DC and Santa Fe:

We have seen the overreach of the Roundhouse Radicals in Santa Fe - now Nancy Pelosi is attempting the same in Washington. Governor Michelle Lujan Grisham called our heroic Sheriffs “rogue” and said that she will continue the fight for gun control despite the "pity party" she claims the Sheriffs are throwing. Well Governor, let me say this. We, the people of New Mexico, will continue to fight as well. We will not back down from your radical overreach into our lives.

The landscape has definitely shifted. The afterglow of the Torres Small victory has become cloudy, with Dems predicting their liberal wing is going to give them more trouble down south in 2020. 

Some of them want MLG to cool her engines when pressing liberal positions on the hot button issues, arguing she is going to win those issues anyway. Don't excite the natives, they warn, or it could keep Herrell and company turning MLG into baggage for Torres Small and ultimately turn the seat back to the R's. 

During the height of this decade's recession/rural Depression/stagnation we often said:

You're going to see and hear things you never thought possible.

Well, that turned out to be more than true, even as the worst seems to have passed. However, previously unthinkable stuff is still happening as the state continues to absorb shockwaves from the historic economic dislocation. For example:

--ABQ Public Schools reports its enrollment is still dropping sharply, from 91,000 ten years ago to the just announced projection of 80,000 for next year. Officials say a severe drop in kindergarten enrollment, sparked by young families seeking economic opportunity out of state, is a leading cause.

--Earlier the University of New Mexico shocked the state when it announced fall enrollment had plunged over 7 percent. That came on top of a decline the previous year. The head count now stands at 24,000, well down from its peak of 29,000. The usual suspects are in play: better opportunities out of state and the crime-soaked ABQ culture are two.

--Attendance at the crown jewel of UNM sports--Lobo basketball--has literally crashed in recent years. The famous "Pit" now struggles to fill even half its 15,400 seats. Did anyone see that coming ten years ago? Changing times indeed.

In the decade to come New Mexico will face an increasingly aging population (predicted to have in 2030 the 4th oldest population in the nation), an entrenched, mostly low-wage economy and an educational system with a broad swath of its youth wrestling more than ever with poverty, crime and drugs.

The good news--if you can call it that--is that most of the state's political and social elites have stopped denying the historic realignment we have been through. With that capitulation to reality, many people are now working vigorously--and not just in politics--to turn it around.

TIM'S TOPGOLF

Maybe ABQ Mayor Tim Keller may want to deal a bit more in reality when it comes to the $39 million Topgolf project. He fought it every step of the way, saying it would cannibalize existing businesses and not live up to attendance expectations, but other elected officials ignored him and approved hefty financial incentives for Topgolf.

The project on I-25 broke ground this week and plans to open next year, but the Mayor was notably absent from the groundbreaking, even though Topgolf will provide 132 full time jobs and dozens of part-time slots. It should also become a major tourist attraction in the tourist driven economy. The Topgolf jobs are not high paying, but they are desperately needed. And they are not much different in pay than the downtown call center jobs that the Mayor has boasted of bringing to town.

Topgolf critics cry "corporate welfare" and it is--but small potatoes compared with what was done for Facebook and Netflix. And any economic benefits will be directly measurable, unlike the film industry where ambiguity about the value of the incentives persists across the nation.

Keller's absence from the groundbreaking does not match his generally collaborative nature and we suspect that it won't be long before he acquiesces and Topgolf is embraced by his administration as part of his One ABQ.

On another front, the mayor may be on the edge of a major breakthrough in addressing the city's homeless problem--by opening a year round, full-time center for the homeless complete with a behavioral health component and other services. The center/shelter would be located in or near the downtown area. His proposal has garnered nearly unanimous support. Now it needs a financial boost from Santa Fe. It's estimated cost is $35 million.

NO DOC IN HOUSE

One of the problems of a generally low-wage economy is attracting high-paid professionals, like medical doctors. The shortage is in many places but in New Mexico it is pronounced, leading to long wait times for accessing health care. Also, the doctors here are aging out, with most now in their 60's. That and more in this series from the Journal which demonstrates that if you have a long wait for medical attention, you're far from alone.

Turning it around is complicated and costly. San Juan Regional Medical Center in the Four Corners is advertising for a neurosurgeon and offering the princely sum of $750,000--and they're still waiting. But with that kind of pay on the line some of the doctor shortage might abate on its own accord. You can almost hear ambitious moms bringing back that proud declaration from days of yore: "My son. The Doctor!" Or daughter.

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Holy Hollywood, Batman!

--The state's film rebate backlog is now a stunning $382 million. While we don't often call on him for assistance, this time we are yelling into the megaphone: "Dr. No, to the emergency room immediately!"

That would be fiscal hawk and Dem Senate Finance Committee Chairman John Arthur Smith whose opponents fault for saying "no" all too often. But in this case someone has to stop being a movie fan and be a movie critic.

First, if the current $50 million cap on annual film incentives is to be raised, don't make it much. We're already too deep in the quicksand.

Second, we have to pay off the $382 million but it should be done over several years. The $150 million the House budget puts up is too much for one year.

Third, the state economic thinkers now need to focus more effort on attracting other industries and ones that are not as costly because. . .

Fourth, the dog caught the bus. Netflix has committed a $1 billion investment over ten years for ABQ film production. That is the big kahuna and more than anyone expected. The rebates/incentives have more than worked. Now maximize that investment for the entire state, but chill on more generous rebates that threaten to take needed surplus dollars from education.

The state's DC delegation managed to prevent Amtrak passengers of the future from being forced off the train in Kansas and make their way to ABQ by bus. Maybe Trump doesn't dislike us that much after all--or just isn't paying attention.

--It's well into the 21st century and NM is still talking about high speed Internet? Yep:

HB 9 creates the Broadband Infrastructure Development Fund providing $10 million of grants and loans to local governments. The legislation addresses lack of access to high-speed broadband, and specifically ensures the inclusion of tribal nations and pueblos, which are plagued with some of the lowest Internet access rates. 

By all means, pass the bill, but how about some results--maybe sometime this century? Better yet, why not just issue a state general obligation bond and have the government wire what's left to be wired with high speed Internet. Then contract with a private company to run it. Come on, New Mexico. 20 years? Really?

BRING ON LADY GAGA

Talk of finally tearing down 62 year old Tingley Coliseum at the State Fairgrounds and building a new arena for the youth of today--who as we just reported are fleeing the state--and to start attracting the major musical acts that so often bypass ABQ because there's no place to put them--is starting to get more real. A study has been in the works for nearly two years and Expo NM manager Dan Mourning says it will be completed "soon".

A Senior Alligator with long experience with the state games out the possibility that Tingley will get the send off it sorely needs:

Joe, there's a bunch yet to be done before anybody buys shovels. There are discussions underway with experts in arena and stadium development. Those studies will include recent changes to the political and economic landscape (a new Governor; an active ABQ mayor etc.), utilization possibilities by entities that might impact the building's design such as concerts, basketball and  trade shows.

The first question from everybody, will be "how big, and how much?" They are talking 15,000 capacity to start but they may want to think bigger to ensure they can get the major acts here. Costs also change with decisions on the bells and whistles that go into the facility. A public/private partnership will likely be proposed.

Manager Mourning has suggested state severance tax bonds as one source of funding. But it looks as if Lady Gaga will have to wait a while before she's an ABQ headliner. Maybe in a couple of years she can open a brand  new arena and bring Tony Bennett along to sing one of their cool duets.

By the way, did you known Roy Rogers and Dale Evans were the act for the opening of Tingley way back in '57? Happy trails to you. . .

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We're off and running on the Tuesday political trail. . .

--In the greater scheme of things that more conservative minimum wage increase being sponsored by Grants Dem Senator Clemente Sanchez isn't so bad. It puts the statewide minimum up from $7.50 an hour to $10 next year and keeps the lower minimum for tipped workers in place. Also, it does not gradually increase the minimum to $12 an hour over two years as another bill does, but leaves it at $10. That makes sense for the recession-ravaged rural areas that might be most impacted by $12 an hour in a relatively short time. The state's large cities, ABQ, Santa Fe and Las Cruces, already have minimums near or above $10 and  regularly adjust them for inflation.

--The House continues to inch toward approving a bill to legalize recreational marijuana but there is little confidence in Santa Fe that the state's bureaucracy is ready to take on the sizable task of regulating a new drug industry when it's already struggling with the fast growing medical cannabis program. We still see the Senate putting the brakes on legal pot--at least for this year.

--Yes, powerful Dem State Senator John Arthur Smith, chairman of Senate Finance, can "boggle the mind" at times. Here's reader Ken Tabish:

John Arthur Smith just boggles my mind. Here he is submitting a bill to raise the tax on food which would only hurt the poor in this poverty heavy state but he can't approve a 1 percent draw on the $18 billion Land Grant Permanent School Fund for early childhood education! It's raining cats and dogs in this state especially when we consider low income earners. We have the money, let's spend it--yes, judiciously while maintaining adequate reserves . . . just sayin'.

The one percent draw down on the giant Permanent Fund is still up in the air. The food tax is DOA. Smith knows that but says he wants to make a point about the need for additional state revenue streams.

--Quite a favorable assessment of  Rep. Ben Ray Lujan in Politico and we'll be seeing more national reporting about the northern Dem congressman now that he has secured the post of "Assistant Speaker." Excerpts:

Rep. Lujan

Can a nice guy like Ben Ray Luján elbow his way to the top? (He) has built strong ties throughout the caucus, positioning him to rise in leadership when there’s an opening....Luján now ranks fourth in a sprawling hierarchy helmed by Speaker Nancy Pelosi and is seen as a future contender for one of the caucus’ top jobs — maybe even speaker. But whether a lawmaker known for his congenial, easy-going personality can ascend even higher. . . is unclear. . . And the competition would be fierce. Luján would square off against an ever-growing roster of seasoned Democrats. 

. . As assistant speaker, Luján is tasked with managing a large, historically diverse and at times unwieldy class of more than 60 freshmen. But it’s no secret that the six-term lawmaker from Santa Fe is already eyeing his next move once there’s a chance.

THE GREAT ETA DEBATE (CONT.)

Many of our readers find the ongoing blog debate over the Energy Transition Act (ETA) quite captivating. It's the measure that would increase the percentage of renewable resources the state uses to generate its energy to 50% by 2045. Now that it has passed the Senate Conservation Committee on a close vote the Great Debate again heats up. So everyone say "securitization" real fast three times and let's get it on.

First up is a Senior Alligator with a long background in energy:

Joe, the header on the Journal's account of the Senate Conservation Committee hearing suggests that the PNM securitization bill is the wide road to a carbon-free future. The market is attending to that transition already. The reason the owners of those plants don't want to operate them after 2022 is because coal is too expensive compared to renewables and natural-gas-fired electrical generation.

The end of coal is happening--with or without SB 489 (ETA). With SB 489, the transition will cost PNM ratepayers--$400 million over 25 years. PNM would have us believe customers will save money if SB 489 passes. PNM's ratepayers (many of whom are poor) could go broke saving money from this bill.

The Public Regulation Commission (PRC) is the duly constituted body to make 'abandonment' determinations. PNM has a pending case before it. PRC has substantial authority and an expert staff.
SB 489 is the Legislature assuming authority over this question--with little-to-no capacity for doing so. PNM thinks it will get a better deal from legislators than it would get from regulators. The Conservation Committee didn't elicit PRC's view of the legislation.

Tactically, the conservation committee's 5-3 vote was a close call for PNM. The 5-3 'do pass' vote would have died on a 4-4 tie. It was one vote from defeat. The bill has language ambiguities that Committee Chairman Cervantes wants to try to fix. Such fixes can be easier said than done. And, with 19-days remaining until adjournment, the clock begins to matter.

Apart from language imprecisions, the bill is a complex stew that puts good and bad stuff together. The 'bright, shiny object' in the bill that has attracted 'progressive' support is the increase in the Renewable Portfolio Standard (RPS). The transition from coal to non-fossil fuel sources is a function of economics. It will happen whether the 'progressives' are complicit in extracting $400 million from PNM customers or not.

Securitization is good for PNM shareholders. If SB 489 becomes law, Wall Street will be pleased and NM customers will pay for its pleasure - needlessly. Let the PRC do the job it was created to do.

Welcome back. Let's get right to the latest action.

It's been a long absence from the national Sunday morning news broadcasts for a New Mexico Governor but MLG broke the ice Sunday with an eight minute appearance on CBS' Face the Nation to discuss immigration and border issues.

For eight years her Republican predecessor, Susana Martinez, shied away from the Sunday gabfests which often go deep in the weeds on policy, an area where Martinez, to put it mildly, did not excel. Still her supporters pushed the first female Hispanic Governor as a national political prospect, even if she was unable to muster the courage to take on the national media.

There are no rumblings about MLG seeking national office but as a former congresswoman and a policy wonk she is comfortable in the DC spotlight. If we are lucky and temptation doesn't overtake her, for the first time since the early 90's New Mexico will not have a Governor seeking national office. Martinez's national ambitions (mainly for VP) were preceded by those of Dem Bill Richardson who ran for President and those of GOP Guv Gary Johnson who sought national fame with his drug legalization efforts and later ran twice for President.

While it's good to see a New Mexico Governor back on the Sunday morning circuit, it does not stimulate any interest for her camping out in Iowa or New Hampshire. The state has had its fill.

MONAHAN AND MUNOZ

Our Friday blog that urged Santa Fe to cool the head of steam it seems intent on building for cutting back state retiree benefits from the Public Employee Retirement Authority (PERA) fund brought differing thoughts. Gallup Area Dem State Senator George Munoz, who is deeply involved in the issue, joined the debate. He goes first:

Joe, between PERA and the Educational Retirement Board (ERB) funds this state has almost $14 billion in unfunded pension liabilities with no prospect of ever paying them off. Those liabilities will grow this year. Bond rating downgrades have already started to happen. I agree with the Governor that “reasonable” changes need to be made and both the ERB and PERA boards have come up with reasonable proposals. Having worked on our pensions for more than a decade I can assure you this is not fake news and everyone needs to help, including the state and retirees. 

Sen. Munoz

By the way, the S&P portfolio you want PERA to adopt was at -10% earlier this year. I’ve seen the numbers and neither PERA nor ERB would survive a -10% return. We can make reasonable changes now or big changes later. It is the state and the pension fund we are trying to protect. We cannot protect what someone worked twenty-five years to save if we are not able to work together.

Thanks for the thoughts, Senator. Here are ours:

NM will be adding thousands of employees in the next few years, including educators, to make up for the extreme number of vacancies left from the Martinez administration. Their retirement contributions will help shore up both funds. Also, we do not believe it is necessary to achieve 100 percent funding for the "unfunded liabilities" that stretch into the decades ahead. Our generation alone can't solve the problem. PERA funding is currently over 70 percent of the 100 percent. We are really not in a perilous spot.

As for the S&P 500 investment, we used a 15 year comparison because our funds are long-term investments. In that time span a passive S&P index fund handily beat over 90 percent of actively managed stock investments that cost us much more in management fees. Did PERA’s actively managed stock portfolios beat the index over 15 years? It would be interesting to know.

The 10 percent market downturn you mention is not unusual. Only if it happened on an annual basis for a number of years would it dramatically impact the retirement funds.

We agree changes are needed, just made carefully and spread over the next 20 years--not a panic move that would harm the economic prospects of today’s retirees and those nearing retirement.

Thanks again, George. We appreciate the work you do on this important issue.

HOW TO LOSE THE HOUSE

Reinstate the dreaded food tax? What? Are the Dems trying to give the state House back to the R's? That's the take of a number of Alligators as they watch this one play out. Senate Finance Committee Chairman John Arthur Smith, a Dem, is the front man for the food tax and has introduced such a bill as did a Senate R.

Reinstating the tax on food, says Fred Nathan of Think NM, would hit New Mexicans earning $15,000-$40,000 three times harder than people earning over $200,000. And he adds that even though these bills would never be signed by MLG, it's important to note this angle:

New Mexico’s tax system is a mess and is undermined by more than 300 special interest loopholes, exemptions and deductions. So it is puzzling that these bills, rather than focusing on overall tax reform, instead focus on the food tax exemption, the one exemption which benefits hundreds of thousands of low and middle income New Mexico families and which enjoys wide public support.

Well, so long as this stays below the radar. Otherwise, the new battle cry of Session '19 will be: "Keep your hands off our tortillas, Santa Fe!"

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