New Mexico's government will not be flattened by the oil crash and virus pandemic, rather it will limp along for the next year leaning on its ample cash reserves and moving to what the Legislative Finance Committee calls "moderately austere" budgeting.

The bottom lines are:

No employee layoffs or furloughs are planned, state workers and teachers will get a one or two percent pay raise instead of the planned four percent, most agencies will see their budgets cut two to four percent for the fiscal year that begins July 1 and there are no planned tax increases. The budget would go from the proposed $7.6 billion to about $7 billion. 

Key to the LFC and gubernatorial budget plans released in advance of the June 18 special legislative session is the use of $750 million in federal coronavirus money to help plug the $1.7 billion hole for the upcoming budget year. The feds have not expressly authorized that but the bean counters are going forward with the expectation that they will eventually give their approval.

There is a glimmer of good news. LFC economist Dawn Iglesias says the "upside risk" in the LFC predictions is the oil price going higher than the $31 a barrel she and her fellow bean counters expect it to average in the next year. West Texas oil has been trading in the high 30's in recent days. If that bid were to stick or tick higher predicted state revenues would rise.

If the economic torture continues everything will be on the table--cuts, tax hikes and layoffs--at the regular January legislative session when lawmakers tackle the budget for the fiscal year that begins July 1, 2021.

CHANGING GUARDS

We sat in on the virtual LFC pre-special session meeting Wednesday and witnessed a bit of situational irony. Senate Finance Committee Chairman John Arthur Smith, the most powerful budget voice for a decade but defeated in his bid for re-election at the June 2 primary, was unable to make a connection for most of the meeting. Instead it was presided over by House Appropriations Committee Chairwoman Patricia Lundstrom. The changing of the guard got an early start.

MLG'S HAND

Gov. Lujan Grisham has played a competent budget hand. She managed an oil-financed increase in a budget that had been stagnant for years. Yet she did not fight the conservatives desire for extraordinary budget reserves. Much of her budget will survive. Her revised smaller plan is not at great variance with that of the LFC. She and the legislature have breathing room for a year. They will need it. Things could get worse before they get better.

LOCAL HIT

Meantime, local governments like the city of Santa Fe and others are falling off the fiscal cliff, eating through reserves and furloughing or laying off employees. That crisis awaits another coronavirus package from Congress that would provide bailout money. Also, expect them to come to the state with hat in hand.

OPEN SCHOOLS

A recurring theme from lawmakers across the state and both parties during that LFC meeting was the need to open up the public schools in August. It was a clear signal to the Governor and health department as they near a final decision.

MEMO TO MANNY 

The email brings a memo:

Dear BernCo Sheriff Manny Gonzales, In case you haven't heard , Attorney General Hector Balderas is proposing that all law enforcement in New Mexico be equipped with body cameras, something you have long opposed. Your stubbornness has led to a variety of scornful commentary and now, after George Floyd and other shocking police abuse cases, your decision is completely out of context. So here's the deal: you cave on the cameras and you get to continue your longshot 2021 mayoral campaign. No cameras? Then no campaign. Done. Over. Finished. Have a nice day, Manny.

Meanwhile, ABQ Mayor Keller and APD Chief Geier know the ongoing excessive overtime pay fiasco at APD makes Keller vulnerable to mismanagement accusations by Manny or anyone else running against him. The department has come with a new overtime policy. Will it stop an officer from making nearly $200,000 a year as has already happened under Keller?

In light of police abuse that sparked protests here and nationally, City Council President Pat Davis is conducting a community survey on what should be the next steps for APD. It's posted here.

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Is MLG a serious prospect for VP under Joe Biden or is her name being pushed out only for Biden to court favor with Hispanic voters? Well, you be the judge. Meantime CNN's VP watchers have moved the NM Governor up to number 5 on their top ten list of potential VP's. Take a look:

5. Michelle Lujan Grisham: Lost amid the flood of news is the fact that Nevada Sen. Catherine Cortez Masto removed herself from VP consideration. That move leaves Lujan Grisham, the governor of New Mexico, as the highest-ranking Latina in the VP mix. (Other names like Texas Reps. Veronica Escobar and Sylvia Garcia still seem like something of a long shot to me.) Lujan Grisham has also stepped up her criticism of Trump and his response to Floyd's death. (Previous ranking: 8)

Biden is expected to make his pick by August. Just don't let Lt. Gov. Howie Morales hear about her improving VP chances or he may need a defribillator.

EYEBROW RAISER

As the pandemic continues to rage on the Navajo Reservation a bit of an eyebrow raiser comes from the MLG administration. It is pondering an appeal of a federal Dept. of Education ruling that gives a boost to Native American school districts.

Impact Aid is designed to compensate school districts such as Gallup McKinley for the property tax revenue they lose from tax exempt federal lands and the expenditure to educate Native children. However, the state has been diverting much of that money to the general fund, a practice the Feds have now called out. We get this from a western NM educator:

Native American school districts have opposed the state’s practice of inappropriately taking $60 million per year in Impact Aid from the poorest districts in the state. The federal government agreed with them by ruling NM cannot continue to take the money for FY20. The Governor, who has publicly supported replacing the unfairly taken dollars from these students, is now surprisingly preparing to appeal the Feds decision. The Governor would be using a lot of political capital going against the Tribal communities who overwhelmingly voted for her. The federal government has never reversed a decision on this issue so she should just take the Feds ruling as a win. She is risking this voting block for less than 2% of the educational budget. . .

The deadline for the state to appeal is June 15th.

A PAIR OF BILLS

Sen. O'Neill

ABQ Dem state Senator Bill O'Neill isn't letting any grass grow under his feet. First, he came with a book of poems based on his experiences as a legislator and now he comes with his first book of fiction, the Panoramic Diaries which is described in this promo:

The protagonist moves from a rebellious existence to be more focused in the surrounding adult world. As he heads once more to the freights, after working intensely for seven years with parolees in a halfway house, he brings his old railroad diaries with him. Reading them over as he bounces from railyard to railyard, framed by the scenery of the Southwest, he winces at his own self-absorption back then, the shame he feels about his own privilege. . . 

O'Neill represents District 13 in ABQ's North Valley and is seeking a third term this year. He is opposed by Republican Michaela Chavez in the heavy Dem District.

Former Gov. Bill Richardson is back on the diplomatic beat, with CNN reporting he recently played a role in the release of an American Navy veteran held in Iran:

Michael White, 48, traveled to Iran in July 2018 to visit a woman he said was his girlfriend. In January 2019, the Iranian government confirmed that White had been arrested in the city of Mashhad. The State Department said he had been detained since 2018 and was serving a 13-year sentence. He had been charged with insulting Iran's Supreme Leader and posting private information online. . .Richardson. . . formed an unlikely partnership with the administration and played a key role in securing White's release. Richardson, who was ambassador to the UN under President Clinton, runs the Richardson Center for Diplomacy. . .

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Chase, Herrell & Mathys

After a bitter Republican congressional primary the question arose whether Claire Chase would endorse Yvette Herrell on Herrell's victory in that southern congressional battle. Well, Chase didn't keep anyone guessing. In a little noticed Facebook posting shortly after the primary she not only endorsed Herrell but said she was sending her a campaign donation:

I want to congratulate Chris Mathys on running a strong campaign, and Yvette Herrell on her victory. This was a hard-fought Primary Election - no doubt about it, but our real fight has always been defeating Xochitl Torres Small, Nancy Pelosi, and the rest of the Democrats who meddled in our Republican primary. Now it’s time for Republicans to come together, finish the fight, and turn New Mexico red for President Trump. We're sending a campaign contribution to Yvette Herrell and I would encourage everyone else who has the means to do the same. . . 

The Chase endorsement is music to Herrell's ears but not so much to the Dems and Rep. Xochitl Torres Small. They were hoping the GOP primary wounds would remain open. There still may be sore feelings but the Chase announcement lowers the temperature and the tempers in the GOP south.

Businessman Chris Mathys, who finished third in the primary, also endorsed Herrell saying he supports her "100 percent."

This was Chase's first run for elective office. Right now there is no clear path for the R's for any major NM office, except the southern Congress seat. But the political pendulum does swing back and Chase is only 36. She has time for the waiting game. Quickly endorsing Herrell will help if and when a path finally opens.

GUESSING GAME

The guessing game in Santa Fe is about how much of the progressive agenda will be supported in the Senate that will be reshaped following the November election. Here's some more:

Eric Griego, state director for the Working Families Party, which had backed the progressives, said their (Democratic primary) victories are the “last gasp” of the moderate, corporate wing of the party on a state and local level. . .  “With them gone, we think this is going to open up a lot of really, really monumental legislation that the state has needed for generations,” Griego said. The progressives’ priorities include fully funding early childhood programs, releasing the state’s dependence on oil and gas, and repealing an arcane law that criminalizes abortion, he added. “The other really big one is potentially expanding the social safety net whether it’s healthcare or childhood education.”

WET NOODLE TIME

Crystal Diamond

A post we had Monday (since removed) said GOP State Rep. Rebecca Dow would be leaving her House seat to become the state Senate candidate for the seat held by Dem John Arthur Smith who was defeated in the primary. We had Dow replacing Crystal Diamond who won the GOP Senate nomination last Tuesday. Dow tells us the speculation about a Senate run began months ago in the Silver City press and has bubbled up since but that she will be seeking a third term to her SW NM House seat.

We apologize for the error. As punishment we are submitting to 20 lashes with the wet noodle. As to whether such a movida was ever discussed, as several readers asked, that subject--for now--will have to be sidelined.

Here's info from the Sierra County Republicans on Diamond who has served as Dow's campaign treasurer:

Crystal Runyan Diamond of Elephant Butte, NM proudly serves as Secretary of the Sierra Republican Party. Crystal served 8 years as elected official on the Soil & Water Conservation District Board of Supervisors and currently holds office as an elected Truth or Consequences School Board Member. She remains politically active within her community and state.

And here's a closer look at how Martinez-Parra pulled off one of the epic legislative upsets:

 Luna and Hidalgo county voters kept Smith (D-Deming) in front but a big push from Sierra and Dona Ana counties lifted Democratic challenger Martinez-Parra. Martinez-Parra enjoyed 60 to 70 percent of the votes from those two counties. Luna County gave Smith 52 percent of the votes cast while Hidalgo put Smith at 53 percent. Martinez Parra collected 71 percent of the votes from Dona Ana and a 60/40 split in Sierra County.

And there you have that. Is it Friday yet?
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The original post we had here today said that GOP State Rep. Rebecca Dow would be leaving her House seat to become the state Senate candidate for the seat held by Dem John Arthur Smith who was defeated in the primary. We had Dow replacing Crystal Dimond who won the GOP Senate nomination last Tuesday. Dow tells us the speculation about a Senate run began months ago in the Silver City press and has bubbled up since but she will be seeking a third term to her SW NM House seat. We apologize for the error. As punishment we are submitting to the traditional 20 lashes with a wet noodle (revised upwards from 10).

PRO TEM TIMING

Of the five primary targets of well-funded progressives, four won Tuesday. Besides Martinez-Parra they are Pam Cordova who toppled Sen. Clemente Sanchez of Grants, Siah Correa Hemphill of Silver City who beat Sen. Gabe Ramos and Carrie Hamblen of Las Cruces who upset Sen. Mary Kay Papen.
Our reporting last week mentioned top names that insiders see as possibly replacing Sen. Papen as President Pro Tem at year's end. That drew the attention of one of those named--ABQ Dem State Senator Daniel Ivey-Soto--an attorney who is executive director of the NM County Clerks. He came with this about the powerful position that is responsible for handing out senators committee assignments:

Joe, It's nice to see others planning out my career. In the Senate we are a collaborative group and regardless of the results from primary night, for the rest of 2020 we have officers and committee chairs who continue in office at a time when we are being called upon to serve our state. Plus, any new Senators elected in 2020 may want to have their say on this issue as well! It is too early to be lining up a leadership slate for 2021. In the intervening months, Senators will be in deep conversation about where we go beginning in 2021. Those conversations will help define the variety of leadership positions in our chamber.

And what about those rumblings about the future of Senate Majority Leader Peter Wirth? Talk about being on the wrong side of history. He publicly endorsed coalition Senators Sanchez and Smith over their progressive foes, including cutting a radio ad for Clemente. Wirth styles himself a progressive but the progs are none to happy with his endorsements. However, we are not hearing of any Movida being planned against Wirth who has told colleagues that he will seek to be renamed majority leader.

Wirth of Santa Fe is seen as an amiable and competent traffic cop who doesn't intervene in the dividing lines of the Senate. Progressives presume he will follow the policy preferences of the new Senate majority and will not use his position to keep it to the right.

One other note: Trial lawyers are staunch backers of fellow trial lawyer Wirth and are a key Dem donor constituency.

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