Monday, September 14, 2009

More On Bill's Future: Aimless Wandering Or Power Playing? Plus: Special Session Update, And: Our Special Report On Your Money; The Economy Watch 

More national press for Big Bill as he turns the corner on the CDR scandal that ended with no indictments. The New York Times Saturday had the Guv downplaying any return to the national or international stage, but, of course, not ruling it out. He said he plans to finish out his term and them drive around the country visiting major league baseball stadiums. Okay, Guv. As long as Brian Condit isn't doing the driving.

The recent Elephant Butte boating accident put a damper on Bill's upturn, but it is an embarrassment, not a legal problem. Did the incident give the White House pause about Bill? Probably no more than they already have. Richardson's penchant for mischief is well-known.

Whether Richardson gets an appointment as a special envoy to Cuba or another diplomatic post or ends up staying here and completing his term, the impact on the race to replace him will be major. If he leaves, Lt. Governor Denish becomes Governor and the Dems have a much easier time retaining the office. If Bill stays, the speculation about him leaving will hang over the campaign. Will that give Denish an advantage with financial donors, concerned that a bet on an R could blow up at any time?

The Richardson Watch will not end until next summer. The window on appointing him will close around July of 2010. If the White House were to do it close to the election, they would be accused of trying to anoint Denish, a charge that could resonate with voters.


Richardson's "aw, shucks. I'm just going to finish my term" approach offered up to the New York Times may be heartfelt, but it won't convince longtime observers that the Governor does not yearn for a major position to finish out his quite remarkable career. His burning ambition and political skills have taken him far. The torch may not burn as brightly as it once did. But it still burns.

Richardson remains the centerpiece of New Mexican politics and will until he departs. After that, the state will enter an era where politics is played on a much smaller stage and with lower stakes. We have just experienced an unusual juxtaposition in which two political superstars--Richardson and GOP Senator Pete Domenici--shared the spotlight of La Politica. Their larger than life personas elevated politics here to a new level. The next generation of politicos will return us to a time when the state is rarely in the national news and where big ideas and big personalities give way to the grunt work the new politicos will have to perform if they ever hope to attain the stature of Big Bill and Saint Pete.


Santa Fe wall-leaners say an October 9 start date is looking very likely for the special session of the New Mexico Legislature to deal with an historic shortfall in state revenue. That would take them in on a Friday with an eye toward getting out Sunday night or Monday. Key lawmakers are wondering out loud if the shortfall for the current budget year that began July 1st should be estimated at $500 million, up from the already huge $433 million currently projected. Tax collections from all sources--income and gross receipts taxes as well as oil and gas revenues--continue to drift downward. Cutting $500 million during the special will, the reasoning goes, anticipate needed future cuts.

Once Big Bill brings the legislators back he risks losing control of them. He hopes to have an agreement hammered out with a legislative working group by the time the special convenes. Our sense is that the two sides are not too far apart. A key point is that both sides agree direct tax increases are off the table.

Bill wants to cut spending 3% across the board and spare education from the cuts and also avoid layoffs and furloughs. Lawmakers are countering with a proposed 4% slash that doesn't spare education.


Sen. Sapien
We asked Senator John Sapien, one of those negotiating with the Guv's team to address the shortfall, why lawmakers are not yet talking much about restructuring the public schools that critics say have grown top heavy with highly paid administrators, also a concern in the university system. He pointed out that lawmakers set the appropriations level, but it is up to the schools to decide how to divvy up the money. But we know how that will go. To get the restructuring necessary for a lean economic era, we will need legislators to address how the money is being spent. Sapien said we will be hearing more from lawmakers once the special session is underway and in the months after.

Few in the Democratic majority have spoken out, even as the public bristles over the number of highly paid education administrators as well as those numerous state "exempt employees." Will Senators work to have the pain spread fairly, or will sacred cows escape the butcher's knife?


The state is quite divided when it comes to having a "public option" as part of health care reform.

"Do you favor or oppose creating a public health care plan run by the federal government that would compete directly with private health insurance companies?"

The ABQ Journal poll conducted last week has 49 percent of those polled against the controversial government-run proposal and 42 percent in favor. This is not overwhelming opposition, but does show efforts to derail the public option have had an impact. Support of the option by Reps. Lujan and Heinrich does not seem to put them in political peril. Much of Lujan's district favored it, while the ABQ area represented by Heinrich was evenly split. Southern Rep. Teague has indicated he will vote against the option. Opposition to is heaviest in the conservative east side. A majority of Hispanic voters favored the option.


It was the very last sentence in this newspaper report about early retirements at Sandia National Labs that stood out:

Sandia plans increased hiring to replace workers who leave.

There is wiggle room there. Sandia did not say it "will" replace the workers, and in this economic environment that's enough to cause jitters.

Sandia National Laboratories is preparing for a wave of retirements over the next year because of a reduction in the share Sandia pays for retirees health benefits. The reduced benefits apply to those who retire after Jan. 1, 2011, creating an incentive for those near retirement age to leave before that date.

There are 8,200 employees at Sandia, providing a big chunk of the highest paying jobs in the state's largest city. But the budget pressure on the labs is undeniable. There have already been layoffs of highly skilled machinists and others. Sandia continues to say there is no change in employment levels. Will that be the case a year from now? And if the employment level manages to say the same, what about the size of the payroll that feeds hundreds of millions into the city economy? Even if you do bring in new workers to replace the old, you are hiring them for less, aren't you?

At best, Washington insiders say funding for Sandia in the budget yet that starts October 1 will be flat. Can the state's congressional delegation hang on to what we've got? Or will budget levels in the next several years slowly drift downward? Those questions hang heavily in the pre-Autumn air.

Kim Sanchez Rael
The state's economic elite are not unaware of the permanent refashioning the state's economy faces. In a recent conversation with Kim Sanchez Rael, a member of the state Board of Finance and a venture capital specialist with Flywheel Ventures, she shared her view that long-term federal funding for New Mexico will indeed decline in the years ahead. Sanchez Rael, a Democrat and wife of Lt. Gov hopeful Lawrence Rael, said that means there is now more urgency to diversify the economy than anytime in the post-WWII era.

We have an economy already composed of many parts--mining, tourism, agriculture and hi-tech, for example. But if government money--the foundation of the current state economy--is going to decrease, the pressure will be on to expand private sector employment. If we don't, overall state economic and population growth could simply stagnate.

New Mexico's romance with the "big fish" concept may have ended with the economic collapse. That was the notion that we could land hundreds, if not thousands of jobs in one fell swoop from national or international corporations. Politicians here can now be heard talking more about encouraging small business formation--companies with dozens of workers, not hundreds or thousands. And across a range of industries. (The dependence on oil and gas revenues is again glaring).

That means encouraging, but not going ga-ga over the sexy ideas of the day such as renewable energy. There is already talk in financial corridors that the rush to throw money at the renewable sector could lead to yet another sector bubble that ends in a collapse.

Businessman and GOP mayoral candidate RJ Berry makes the point:

"We absolutely chase the green jobs, if that's what you want to call them, but we don't put all our eggs in one basket."

Solar and the like can provide good jobs--perhaps several thousand of them--but to thrive in an uncertain future New Mexico is going to need to scatter its seed far and wide.


Former Santa Fe County commissioner Javier Gonzales, as expected, was elected the new state Democratic party chairman by the State Central Committee this weekend to replace Brian Colon who is running for lt. governor. The vote was unanimous, probably the last time Javier hears that word for a while. From the Dems:

Gonzales, 43, was nominated by Lt. Governor Diane Denish:

Gonzales is leading the effort to bring a...film studio to Santa Fe...Gonzales earned his B.A. in Accounting from New Mexico State University. He currently serves on the New Mexico State Board of Regents...Gonzales and his wife Consuelo have two daughters, Cameron and Cadence...Gonzales along with his family, co-founded La Voz Broadcasting, Inc., which is New Mexico's largest locally-owned Spanish language radio station....

Democratic Secretary of State Mary Herrera is raising money for her re-election.

You are cordially invited to a Party/Campaign Fundraiser to Re-Elect Mary Herrera Secretary of State On Wednesday September 16 at the home of John Clema Hyde Park Estates Santa Fe.

Santa Fe County Clerk Valerie Espinoza has in the past talked of challenging Mary in the primary, but has not been heard from lately.

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