Thursday, February 13, 2020

Simple Solution To Guarantee Secure State Retirement Fund: Raise the Retirement Age, But Is Anyone Listening? Plus: Education Impact Aid, And: High Speed Net; Still A Challenge But Not In Oil Country 

One of the more convoluted pieces of legislation winding its way through the Roundhouse is the plan to reform the Public Employee Retirement Fund (PERA). This bill--SB 72--with its many moving parts--has passed the Senate and now awaits House action. But how much action should there be?

Is there anywhere else in the USA where government workers can get a retirement check in their late 40's or early fifties? Not that we can find. So we queried a spokesman for the Governor's Pension Solvency Task Force. Why, instead of the complicated reform plan, doesn't the state simply doesn't raise the retirement age for everyone--public safety personnel included--to the mid 50's for public safety and near 60 for others?  That's a common plan across the nation. The answer was: "We looked at that but nothing came of it."

Raising the retirement age is a lightning rod for the politicos, but doesn't it make more sense than fiddling with retired workers' cost of living adjustments and making them and current employees pay even more into PERA? And coming back time and again for another fix and more contributions?

Often the most effective solution is the simplest. It's astonishing that none of the major players, the Governor, the legislators or the media, are not pounding the table over this biggest of holes in PERA.

As long as the retirement age stays artificially low--no required age as long as you have either 25 or 30 years on the job--the PERA reformers will continue to demand more contributions from workers and retirees, even as their health insurance costs climb.

The House could resolve this by approving the $76 million cash infusion into PERA that is included in the Senate bill, strip out everything else and mandate a new task force to study a minimum retirement age. 

The best solution in this case may be simple, but it requires courage. That's about as bountiful around this issue as Lobo basketball wins.


This is a bit in the weeds but if the state is ever going to reverse its poor standing in education achievement it's going to have to make much more headway in Indian Country where dismal stats have a disproportionate impact on that standing. From the House Dems:

House Bill 4, a bill to provide the equivalent amount of the full federal Impact Aid to schools and school districts that serve Native American students, passed the House floor. . . House Bill 4 seeks to address decades of imbalance in the distribution of federal education funding.

Currently, instead of distributing Impact Aid funds to the neediest districts in full, 75% of federal Impact Aid funding is credited to the State Equalization Guarantee, a formula used to calculate and administer public education dollars across each school district. With House Bill 4, an equivalent amount in funding awards will go directly to tribal and other federally impacted school districts. . .An estimated $65 million a year is diverted away from New Mexico’s tribal schools and school districts. 
House Bill 4 passed the House floor by a vote of 54-2 and now goes to the Senate for consideration.


So they can get super high speed Internet in the booming SE NM oilfields but can't get it in Indian Country in NW New Mexico or on the Rez?

Businesses and residents in the southern end of a southeast NM county likely will have high-speed internet by the end of the year. The Hobbs News-Sun reports the New Mexico Department of Information Technology announced a new public-private partnership expected to build much-needed broadband infrastructure in Lea County. Officials say the move will accommodate the current economic expansion occurring in the Permian Basin.

How about one of those partnerships in rural McKinley, San Juan and Cibola counties and on the section of the Rez in NM? The state and the state's congressional delegation are losing credibility when they argue they are trying when the rich boom county of Lea gets it in what seems like a snap of their fingers. Come on, guys--that would be you Martin, Tom and Ben Ray.

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Wednesday, February 12, 2020

Early Childhood Trust Fund May Not Be Trustworthy, Plus: A "Hair Pulling" Econ Report 

That "Early Childhood Trust Fund" is headed to the Governor's desk soon and lawmakers and the Guv are doing much backslapping, but the fund comes with major catches. The catches are likely to prevent the $300 million fund from growing anywhere near the $1 billion supporters hope and maybe not growing at all.

The measure approved, Senate Bill 3, calls for a certain amount of energy-related tax collections to be diverted in years when total state cash reserves exceed 25% of spending levels.

Because of the unprecedented SE oil boom, for the next budget year the state for the first time will keep cash reserves of 25 percent. As the oil boom continues but naturally tapers off and recurring state spending increases--we've gone from $6 billion to $7.6 billion in two years--carrying a 25 percent reserve every year is near fantasy. Reserves of ten percent are normal, 25 percent is historic.

$20 million of the trust fund is slated to be appropriated in July of 2022 and $30 million a year each July after that. New Mexico is currently ranked last in the nation in child well-being in the Kids Count Data Report. If the initial $300 million grew with more cash injections, the amount of investment income available for early childhood would increase. Since the state is requiring that cash reserves hit 25 percent before the fund gets additional money what you see is probably what you get for the foreseeable future.

Also, the bill says if the state budget is threatened with deficit spending the early childhood fund could be raided:

. . . Money in the. .  fund may be expended in the event that general fund balances. . . will not meet the level of appropriations authorized from the general fund for a fiscal year. In that event. . .the legislature may appropriate from the fund to the general fund. . 

The early childhood trust fund is a baby step not a grand leap to provide universal pre-k and other programs for children ages zero to 5. The bill's sponsors, Rep. Doreen Gallegos and Sen. John Arthur Smith, have placed a nearly impossible hurdle to grow the fund in the manner of the $20 billion Land Grant Permanent Fund or to otherwise guarantee the new fund's permanence. Baby steps are fine, just don't call it walking the walk. Because it isn't.


Here's one that will have both the left and right pulling their hair out. The left because it's about more nukes, the right because it shows that making New Mexico's economy noticeably less dependent on the Feds is a pipe dream:

The National Nuclear Security Administration, a semi-autonomous branch of the U.S. Energy Department, would see its budget increase by 18.4 percent to $19.8 billion next fiscal year, partly to ramp up production of plutonium pits at Los Alamos National Laboratory and Savannah River Site in South Carolina. Weapons spending would climb to $15.6 billion to help modernize the nuclear stockpile.

And then there's this:

. . . A 2019 economic-impact analysis. . . found that Sandia National Laboratories is responsible for creating 1,100 new jobs while contributing $509 million to New Mexico businesses and $96.6 million in state gross receipt tax revenue. The Economic Impact report also found that the Sandia contributes $784 million to small businesses in New Mexico and “manages economic development programs that leverage the people, technologies, and facilities of the Labs to deploy technology in support of Sandia’s mission and to create jobs.” 

So much for "diversifying" away from all that. Do we need to? How about cutting the crime, ramping up the education levels and encourage small business growth? Now that's "diversifying."


Did you know:

In 2018, the number of current and retired public school employees in the Roundhouse surged to 16, according to legislative bios. 

We're sure they like making the rounds at the Roundhouse but the way things are going the retired teachers may have to be called back:

. . . Skyrocketing numbers of people with bachelor’s degrees (are) stepping into classrooms without teacher training. It’s a trend that syncs with a drop in the number of teaching candidates emerging from the state’s university education departments. But those teachers quit at much higher rates than traditionally trained teachers because, and like many beginning educators, they don’t feel properly supported for the rigors of the job. The teacher shortage plays out in the day-to-day lives of students through larger class sizes in some schools. . .

Teachers appear to be in store for another raise this year (4 or 5 percent) as Santa Fe continues to whittle away at the many vacancies.

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Tuesday, February 11, 2020

Clashes For Congress: Chase Takes To Tube To Head Off Herrell Ahead Of Pre-Primary, Plus: Serna Hones In On Native Support 

Claire Chase
Fearing a rout at the March 7 Republican pre-primary convention that could cripple her candidacy, southern congressional hopeful Claire Chase is taking the highly unusual step of launching a "six figure" TV ad buy before the pre-primary to make up ground on Yvette Herrell, her chief rival for the coveted GOP nomination.

In her ad posted on Facebook Chase is show with a gun slung over her shoulder. Herrell comes in for a swipe getting dinged as "a career politician"

Haunting the Chase campaign are past Facebook posts ridiculing Trump and his presidential run. Herrell is expected to have those posts widely viewed via paid media leading up to the June 2 primary. Chase's TV ads put her in damage control mode and on the offense. Her campaign says:

We’re grateful that the outpouring of support for Claire’s candidacy from conservatives has put us in a position to let voters know early that Claire is the only pro-Trump political outsider in this race.

Herrell, the 2018 GOP nominee who lost a close race to Dem Xochitl Torres Small, is the heavy favorite at the pre-primary where contenders seek an official spot on the June ballot by garnering at least 20 percent support from the delegates. Failure to do so is tantamount to a death knell for a candidacy.

With or without TV ads. Chase is expected to cross that 20 percent threshold but by how much is critical. If she can keep Herrell in her sights at the convention Herrell will be denied valuable momentum.

A third candidate, Las Cruces businessman Chris Mathys, is in the race but a footnote to the high-powered Herrell-Chase rivalry.

Chase's most recent finance report showed her with over $550,000 in cash. Herrell reported over $460,000. Chase hails from a wealthy SE oil family and money is not an obstacle. Spending on very early TV whose main purpose is to influence several  hundred delegates reveals how expensive and hard-fought this campaign will be. Herrell does not have the same fund-raising capacity as Chase so it will be interesting whether she sees the need to respond with her own TV buy.

Watching avidly from the sidelines is Rep. Torres Small whose worry beads are never far from her side. How could they be as the R's start to go all out to get her out.


The contest for the Dem nomination for the northern congressional seat has become a highly competitive battle. Santa Fe District Attorney Marco Serna is seen lagging front-runners Valerie Plame and Teresa Leger Fernandez but he still has some arrows in his quiver, including a play for the up in the air Native American vote. From Marco's spin room:

Serna announced that former Third Congressional Candidate and current President of the Navajo Nation San Juan River Farm Board, https://www.dinehbenally.comDineh Benally, endorsed his campaign. Benally endorsed Serna for his “family” and “community” driven campaign across the diverse district. “I am honored and humbled to have such strong Navajo support. . . we are sending a strong message that I will fight tirelessly for the Navajo people and Navajo Nation in Congress,” said Serna. 

The endorsement is nothing to sneeze at since the district's population is 20 percent Native American and overwhelmingly Democratic.

All three front-runners are expected to get 20 percent delegate support at the Dem pre-primary convention and win official spots on the June ballot. This one, kids, is like the Dem Prez derby. There's  no end in sight.


ABQ Dem state Sen. Jerry Ortiz y Pino acknowledges that his bid to legalize recreational marijuana this session is dead. . . GOP Rep. Rod Montoya says Dem Rep. Nathan Small's proposal to revamp the Public Regulation Commission is "premature" and a "blatant power grab" on behalf of MLG. At a committee meeting Both D's and R's expressed support for Montoya’s take, pointing out that a PRC reform measure is on the November ballot. Why not let the people speak first?. . .

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Monday, February 10, 2020

Red Flag Law Is Green Light For Cervantes; Former Guv Candidate Makes Comeback, Plus: Does Red Flag Weaken Senate Coalition? And: GOP US Senate Race Could Lose A Contender  

Sen. Cervantes
State Senate Judiciary Committee Chairman Joe Cervantes engineered the surprise of Session 2020 when he pulled a rabbit out of his hat and managed to usher through the state Senate the controversial Red Flag law that stirred emotions statewide. Before the vote we wrote:

Cervantes says he will now seek a compromise on Red Flag. Thirty of 33 NM county sheriffs oppose the law. If he can come up with a bill that passes the Senate, his new nickname might be "Joe the Magician."

That nickname may not stick but the Red Flag victory does appear to mark a turn in the fortunes of the 59 year old Cervantes who has served in the House and Senate for 20 years (the Senate since 2013) and is often cited as the legislator with the most unrealized potential.

For years the articulate Las Cruces lawyer has tried to break through only to fall short. As chairman of the House Judiciary Committee he participated in an ill-fated coup attempt of then-Speaker Ben Ray Lujan. He was forever toying with a run for the southern congressional seat only to retreat. Finally, in 2018 he pulled the trigger and sought the Dem Guv nomination, but the effort was half-hearted and he finished third behind MLG.

Then came one of those out of the blue moments--the arrest of Senate Judiciary Committee Chairman Richard Martinez on aggravated drunk driving charges. The mishap cost Martinez the chairmanship and in slid Cervantes.

Martinez sat on the Red Flag bill in 2019, a major priority of Gov. MLG. Cervantes played ball, despite an uproar in rural New Mexico, and pushed through amendments that got the bill before the full Senate. The final vote in favor Friday was 22-20.  The bill is expected to win approval from the House and be signed by the woman who dashed Cervantes' gubernatorial dream, but who now is a key ally in his transition from just one of the pack to pack leader.

The Red Flag vote is a major win for the Fourth Floor as well as Cervantes. Conservative-leaning Democrat George Muñoz of Gallup did not, as many expect, vote with other like-minded Dems and the chamber's Republcians to stop the bill. His vote was so key that Lt. Gov. Morales issued a statement saying: "I applaud State Senator George Muñoz for his very courageous vote." (Some goodies from the Guv to follow?).

Is the Munoz defection the prelude to the gradual waning of the conservative Senate coalition that has held sway for so long? That seems likely. The pressure on the Senate to moderate is enormous. The House today is a blazing blue, aflame with liberal rhetoric and passing legislation that represents the views of the major cities.

The failure of the rural block to stop the Red Flag bill had sheriffs, gun rights advocates and conservatives of all stripes flocking to the capitol in protest. It was a seminal defeat for them and will be followed by more setbacks as the state's population continues to realign.

By design the Senate is more restrained than the House and is not about to become a hotbed of liberal activism. However, it will move toward the center and center-left more frequently. The Red Flag decision signals more Blue votes to come in the years ahead.


It appears not all of the six GOP US Senate candidates will get considered for an official spot on the June primary ballot when state Republicans hold their March 7 pre-primary convention. Candidates last week filed required petition signatures with the secretary of state to earn that consideration. One of our Alligators has the news:

Joe, Candidates were required to turn in 1,503 valid signatures from registered Republican voters. Rick  Montoya turned in 39 sheets of signatures. Assuming every sheet was full (of which many were not) and that every signature was valid, he'd have 780 signatures. In other words, he is not going to make it to the pre-primary. 

Gavin Clarkson turned in 1,934 signatures. That gives him, should all of his signatures be valid, a buffer of 431 signatures. Mick Rich didn't turn in many more signatures than Clarkson and Louie Sanchez not many more than Rich. Mark Ronchetti turned in over 10,000 signatures to lead the field. Elisa Martinez came in strong with between 4 and 6 thousand signatures. Ronchetti might take a hard look at the signatures of some of his weaker competitors and consider challenges to see if he can bump them from pre-primary consideration. Ditto for Elisa. 

It will take support from 20 percent of the pre-primary delegates to get on the June ballot. Candidates who don't will have the option of gathering more signatures to make the grade. However, no candidate who has failed to garner 20 percent convention support has gone on to win a GOP primary.

Dem US Rep. Ben Ray Lujan is unopposed for the Dem Senate nomination. The seat is being vacated by Dem Senator Tom Udall.


Longtime Santa Fe reader Rick Lass comes with this on our coverage tof the US Senate race:

You did not mention that Libertarian Bob Walsh will be running for Senate this year. While he is unlikely to win, his race will determine whether the Libs keep Major Party status in 2022. Former Governor Gary Johnson ran as a Libertarian in 2018 and got over 15% against Senator Heinrich and Republican Mick Rich. Bob obviously doesn’t have the name recognition as Johnson but it could be a place for Republicans to express their displeasure with the current state of the Republican Party.

Good point, Rick. It's already an uphill battle for the R's for the Senate seat and with Walsh perhaps peeling away GOP votes it will make for an even steeper climb.


We received a number of reader emails on the proposal to exempt Social Security from NM income tax, but the bill has already been put down. It was a spirited debate during which we learned SS was not taxed in the state until 1990.

The proposed tax break was slowed in part because of the relatively well-off status of most senior citizens while NM ranks 50th in the nation in child well-being. Look for the debate to resume next year.

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