Wednesday, January 13, 2010

Attacks On Pete Jr. As He Appears To Prepare Guv Bid, Plus: Speaker Lujan Talks Surtax As Way Out Of Budget Crisis, And: Even More NM Politics 

Domenici Jr.
Pete Domenici Jr. may be the son of the longest-serving US Senator in state history and he may be only "seriously considering" a run for the GOP nomination for Governor, but that isn't affording him any protection from early negative hits. Those hits are already surfacing from campaign operatives hoping to dissuade Domenici the younger from joining the fray.

But first the latest on whether he will indeed run. Most insiders we consulted think it is a go. From a Senior Alligator:

I heard from a pretty good source today that Pete Jr. has staffed up to run for governor and may announce next week. He has some big donors and will take advantage of the contribution rules that allow unlimited donations to a candidate...

The 50 year old lawyer, son of 77 year old retired US Senator Pete Domenici, has been in private law practice since 1986 and that is the focus of the first behind-the scenes blows. His foes are questioning federal legal contracts Pete Jr. has received and how that would play out in an election. Will Dems draw lines between those contracts and the power of his father who retired from the Senate in 2008? Any hint of favoritism, they contend, could mean the loss of the crucial ethics issue the R's are wielding against the Dems this cycle.

Domenici Jr. has concentrated on environmental and water law. If his contracts include federal installations such as the WIPP project near Carlsbad or Los Alamos Labs, his opponents will attempt to link them to the office of then-Senator Domenici. Former aides to the onetime senior senator fret about the possibility, noting that the federal government is now controlled entirely by the Dems, perhaps leaving Pete Sr. vulnerable to more probing, even as he tries to enjoy his final years.

Domenici Jr., is a definite threat to the current four member Republican field, if he gets in. His name alone, highly popular still in GOP circles, may assure that he would receive a spot on the June primary ballot at the GOP March pre-primary convention. Candidates need at least 20 percent of the convention delegates to win a party sanctioned spot on the ballot. And if you don't get it, your odds of conducting a viable campaign are close to nil.

Another early line of attack against possible Guv contender Domenici is that he is too establishment. Skeptics of his potential bid say this appears to be the year for an outsider, not an insider like Pete Jr. who grew up at the knee of the keeper of establishment politics here. On the other hand, he may have an old name, but he is a new face who has never sought political office before.

As for the large Domenici family of blood relatives and former aides to the Senator, opinion is decidedly mixed on Pete Jr's trial balloon, according to those with insider knowledge.

But nobody said it would be easy achieving the state's top power position. These early shots are just a taste of what Domenici Jr. can expect if he goes all in. But that's also something he likely learned at the knee of his legendary father.


Speaker Lujan
Big Bill refuses to budge when it comes to rolling back the 2003 tax cuts for the wealthy, but NM House Speaker Ben Lujan has come with a plan that doesn't cut rates, but still raises state revenues from the well-off in order to cover a projected $500 million deficit. The speaker told KOAT-TV's Rod Green a surtax on the highest income taxpayers will be on the table for this session.

I think a surtax for some of the higher income folks is going to be discussed.

That's a clever way of not tampering with the tax rates which are sacrosanct for Richardson, but still tapping the wealthy for tax revenue. A surtax would kick in at a certain level. Lujan didn't say what level, but a good guess would be over $100,000 for individual taxpayers and around $150,000 for a family of four. How much the surtax would be is another point for intense negotiations.

The surcharge could also be temporary, meeting Richardson's requirement that any tax increases be only for three years. The Guv describes himself as "not crazy" about the surtax proposal, but he has not ruled out his support.

A surtax could probably make it through the House, but the conservative Senate may be tougher. There would have to be a lot of wheeling and dealing. (Cutting fewer pork projects, for example) But our posse of Alligators, convened at Zea Rotisserie in ABQ last night (those Gators like their chicken), pointed out that households with incomes over $100,000 are already going Republican, softening the political consequences of any surtax for the dominant D's.

Richardson may still balk, but our analysts are now saying there is a good chance there will be no tax deal and that the session will end in a train wreck and maybe even a series of special sessions as the state budget crisis creates deadlock and dissension.


Santa Fe attorney and businessman Earl Potter is back on the blog, sharply disagreeing with our contention that the state's gross receipts tax (GRT) is too high and inhibits business growth. The Democrat and member of Big Bill's Budget Balancing Task Force, even argues that raising the tax is a good way to help balance the state budget:

Enclosed, with apologies to David Letterman, is my " Top ten reasons for the Governor to propose a small (.5%) increase in GRT " which I presented to Governor Richardson as member of the Budget Balancing Task Force...NM has only the 28th highest sales tax now. A .5% increase would move us to 25th, still lower than TX,OK, AZ, and CO. I don't know of any businessman who thinks that the level of our gross receipts tax inhibits economic growth, and many who agree this is the least damaging way to raise revenue...

Well, not to spar too much with you Earl, but maybe the businessmen you are talking with are mainly in the upper tax bracket and are enjoying that generous tax cuts they received from Big Bill and the Legislature in 2003 and that is costing the state plenty. The gross receipts tax impacts low wage New Mexicans most because it is a broad based tax. Also, Texas does not have a state income tax, so their sales tax is higher than ours for a reason.

Maybe we can do a compromise. You agree to support a surtax on the well-off and we agree to support a very limited increase in the GRT on certain transactions. Draw up the papers, Earl. We'll do this deal at The Shed. You buy the lunch. I'll pay the tax.


We're getting solid input from readers who are long on business experience on how the state can solve its mammoth budget deficit. Jim McClure comes with this:

What ought to happen is a detailed review of each government activity, with questions such as:

--Is this department necessary? Can it be merged with another department and administered at a reduced salary grade? How many layers of supervision do we need? Can the organization be flattened by eliminating supervisory positions?

--What level of administrative and clerical support is necessary? Does every manager need his/her own administrative assistant, or can several managers share an assistant? Can some generic functions be contracted-out at lower cost instead of performed with state employees? For instance, what are janitors doing on the state payroll?

I'm a veteran of multiple downsizing moves in the Bell telephone companies in the 1980s and 90s that involved all of these management actions. There were a few boneheaded moves, but in most cases these companies were able to realize substantial savings by reducing the management force without laying off a single customer service employee.

Reduce the management force in New Mexico government and education? Someone get the smelling salts, Winston Brooks and David Schmidly just passed out.


Her campaign may be kicking itself for falling behind the curve, but GOP Guv candidate and Dona Ana County District Attorney Susana Martinez has finally agreed to voluntarily release a year-end list of her campaign contributions and expenditures on her Web site this week. Susana has been running what we've dubbed an ethics-obsessed campaign against presumed Dem Guv nominee Diane Denish, but it was Denish who beat everyone to the punch by voluntarily reporting each quarter her campaign donations. State reporting requirements are sporadic with the next report not due until April 12.

Denish challenged all the GOP candidates to follow her example as a way of increasing transparency for Campaign '10. GOP Guv candidate Janice Arnold-Jones was the first to respond with an early release, now Martinez. Candidates Turner and Weh have yet to agree to release early reports.

This is very early skirmishing but Denish will have an argument this fall that it was her example the R's followed when it came to this ethics issue.

The Republicans have some good arguments going for them this election year, but Martinez and the others are going to have to be savvier. They are now playing on a statewide and national stage. And we're all watching.


The worries of daily newspapers are not going to to go away with the new year. For example:

ESPN did a pretty good job horning in on the ABQ Journal when it came to coverage of the controversy last year over University of New Mexico head football coach Mike Locksley. While it doesn't seem to be around the corner for New Mexico, ESPN could regularly compete with the Journal over state sports coverage. A reader points out that the very profitable cable sports channel already has local sports sites dedicated to several major US markets.


Well, it was good while it lasted. We blogged how the winning performance of the University of New Mexico basketball Lobos was giving the PR challenged school a reprieve of sorts, but no sooner had we sent that into cyberspace and the Lobos drop their first two conference games, knocking them out of the top 25 teams in the nation. The Lobos were 14 and 1 before those mishaps. It seems pulling UNM out of its PR pit is going to take some good news from off the court. The Lobos play Utah tonight at 8 at the Pit.

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