Tuesday, November 23, 2010

Cracks In The R Ranks: Not All Favor House Coalition, Plus: More Insider Info On Big Budget Gap, And: The Readers Write 

Cracks have begun to appear among state House Republicans that could make it even more difficult for them to form a coalition with a handful of Dems and take over the chamber. That's the word from our Alligators and insiders who now count three Republicans among the 33 House R's who are not friendly toward supporting Dem State Rep. Joe Cervantes for House Speaker--or any other Democrat--to dethrone longtime Speaker Ben Lujan.

With 37 Dems and 33 R's, it would take all the R's plus three Dems to form a GOP led coalition in the 70 member House. Take away the three R's and you need six Democrats to do the trick. Not likely.

At present, Cervantes has the support of Reps. Nunez, Mary Helen Garcia, Irwin and himself. If all the R's came to his side, that would give him 37 votes--one more than needed to become Speaker. If he pursued a coalition without picking up more Dem support, he could only afford to lose one Republican, but no more than that.

We're told the Republicans reluctant to join any coalition have several concerns. One is their hometown constituents and whether they would want them voting for a Democratic Speaker. Another is strategic and one we've previously mentioned. This 60 day legislative session starting January 18 is going to be about cutting budgets and taking services away from the public. Not all Republicans want ownership of that agenda and the resulting pain. If the session doesn't go well, the majority party would be positioned to take the hit.

R's in favor of a coalition say take the power while you can. Rarely is the minority party ever in a position in the state House to exercise meaningful influence. This is one those rare occasions.

Over the weekend House Dems again nominated Lujan to be their speaker. He overcame a challenge from Rep. Cervantes.

Another scenario floated here Monday--that Lujan step aside and pass the Speaker baton to Rep. Ken Martinez--is one of many that will keep the political class playing the guessing game throughout the holiday season and then some.


We've been blogging that the $452 million projected shortfall for the state budget year that begins next July 1 is not the final one. There is still another budget estimate to come next month that could--just could--mean the final number is lower or higher. But the final estimate does not come from the Legislative Finance Committee (LFC) alone as we have indicated. Here's a full technical explanation from a Santa Fe Alligator we bring to you because this issue is so dominant--and important:

What happens in early December is the final Consensus Revenue Projections before the legislative session. Those projections are developed by career economists from the Executive and the Legislature.

The numbers that the LFC has been reporting, and more recently, DFA (representing the Administration) showed drastic differences in terms of budget assumptions--namely the growth of Medicaid and retirement contributions. Despite those differences, both the Executive and Legislature are working from the same revenue projections.

But in a few weeks, new joint revenue projections will be developed.

One of the flies in the ointment in past state budget projections has been the assumed rate of economic growth. The Santa Fe high altitude crowd keeps projecting it to be stronger than it turns out as this merciless recession continues. Now there is this projected recession-inspired explosion in Medicaid growth.

There are political implications in the size of the projected shortfall. If it were in the $300 million range much less drastic action would be required to resolve it than if it stays around $452 million. How so?

For one thing, a $450 million shortfall could propel that controversial proposal from Senate Majority Leader to issue bonds backed by the state's $3.5 billion Severance Tax Permanent Fund to resolve some of the shortfall. But a hole in the $300 to $350 million range might keep demands at bay that the severance fund be put in play. Clearly, the stakes don't get much higher when it comes to the final revenue forecast before solons gather in Santa Fe January 18.

(The severance fund, derived from royalties on natural resources, and the Land Grant Permanent Fund are two of the state's permanent savings accounts that currently total about $13 billion.)


ABQ PR executive and 2010 GOP Guv candidate Doug Turner grabbed some of the insiders by the collar when he came with an op-ed piece that had the Republican actually supporting the use of the severance fund to help plug the budget hole---but only under certain circumstances.

State Senate Majority Leader Michael Sanchez was first to float a trial balloon on bonding the severance fund to resolve the money woes until the state economy recovers. He recently said that the idea will definitely be back in play in the 60 day legislative session starting in January.

Sanchez's "raid" would only require majority approval from the House and Senate. Turner says Republican legislators would not vote to bond money headed to the severance fund unless they had voter approval. To that end, he suggests a Constitutional Amendment be placed on on the ballot at a special election in 2011 asking voters to give lawmakers permission to get into the huge savings account.

Governor-elect Martinez has expressed wariness of tapping any of the state's legacy savings accounts. However, issuing bonds against severance tax money is current policy for capital projects. The fund has also been used to finance targeted investments in private ventures, but many have not done well.

Since Martinez has pledged no tax increases of any kind in her four year term, bonding against the severance fund as a short-term bail-out--either now or down the road--could look tempting to her if state finances don't soon take a turn for the better.


From Jim McClure in ABQ:

One of the advantages of living here is the comic relief of New Mexico government. I'm still laughing over the decision of the transportation department to name the I-40/Coors interchange after Gov. Richardson.

In my home state of Illinois, where former governors wind up making license plates, they generally do not name anything for a politician until he is deceased and beyond the reach of the law. This saves embarrassment later.

Since indictment appears to be an occupational hazard for our politicians, this would be a prudent policy for New Mexico. You'd think they would have learned something when the Hispanic Cultural Center had to remove Manny Aragon's name from a building

From Jeff Potter in Alameda:

I had to comment on the mention in the blog about naming an interchange after departing Guv Richardson. Having retired from UNM 4-plus years ago, I was astounded by all the buildings named after Senator Domenici and his wife or Governor Richardson and his wife just on the Health Sciences side of campus! What about former Guv Bruce King? Are there any state buildings named after Bruce and/or Alice? It seems to me a big disparity, especially since they both passed away in the last two years and did so much over three decades to advance the quality of all New Mexicans. Besides, Bruce was known for mending political fences, not widening them.

The late Bruce King had the main building of NM Farm and Ranch Museum in Las Cruces named in his honor.

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