Wednesday, February 19, 2014

Flat State Economy Gets Modest State Budget Boost; Analysis And Context On Where We're Headed, Plus: Who Won The Hanna Battle? 

The $6.2 billion state budget approved unanimously by the state Senate last night loosens the purse strings just a bit. It calls for a 5 percent increase in overall spending, gives a 3 percent pay boost to the mostly underpaid state workforce and provides for a reserve fund of less than 9% of the budget instead of 10%.

It amounts to a baby step toward stimulus but it was still enough to have our parsimonious Governor declare she was "concerned" about the overall increase. Try not to worry too much, Governor. We have zero job creation, creeping depopulation, stagnant to downward home prices and federal government spending on the decline. Combine all that with the perennial social conditions crisis that has plunged the state to 50th in child-well being and worst in the USA poverty rankings and you have a state that is pretty much flat on its back.

Even fiscal hawks John Arthur Smith, chairman of the Senate Finance Committee, David Abbey, the powerful staff leader of the Legislative Finance Committee and Department of Finance chief Tom Clifford can't deny the reality they are reading about even if they don't personally experience it from their insulated perches.

The 5% increase that worries the Governor could finally be a reflection of this trio's fear that they are falling behind the curve. And they are. They take comfort in a $600 million budget surplus, over $16 billion in Permanent fund cash and $600 million in capital outlay money appropriated but not yet spent. But all of that is cold comfort for the legions who can't find work in capital starved New Mexico.

Senator Smith, if he is aware of this blog, probably doesn't recall that we were among those who had his back when the state was going on a historic spending spree in the prerecession years. He tried not to let the party get out of hand as Big Bill played Santa Claus year after year. But we've gone from Santa to Scrooge.

Without investment in the state's human capital, there will be no future parties. The booms will pass us by--as the one underway regionally is now doing.

The budget--which now goes to the House--is best described as offering a glimmer of hope that Santa Fe is finally catching up to the reality on the ground. It does offer that modest spending increase and even that little drop in the percentage tucked away in reserves. Baby steps, for sure, but steps in the right direction...


We blogged Tuesday that the state budget originates in the House by tradition and "rule." Reader Jonell Maison says:

Joe, There is no rule that the budget bill originates in the House, that is purely tradition. There have been several times that the bill came to the House from the Senate, most recently under Gov. Johnson. Remember 1999, when he vetoed both Senate Bill 2 and SB 738, both state budgets?

So noted, Jonelle. Tradition was violated this year because of the gridlock in the state House where a weakened Democratic leadership called for a state budget vote and it ended in a tie. That made Senate Finance Committee Chairman John Arthur Smith pounce.


Republican Jim McClure writes:

Joe, I laughed out loud when the paper quoted Sen. Jacob Candelaria in a grammar-challenged criticism of (Sec. of Education designate) Hanna Skandera: “I think both her and the governor are bad for New Mexico…” 

I guess school reform doesn’t stand a chance when graduates of local schools serve in the legislature.

And I chuckled again when your blog revealed that Rep. Michelle Lujan Grisham, a big supporter of raising the minimum wage, visited Lavu, Inc. which produces point-of-sale technology that replaces minimum-wage workers. I guess politics is an irony-free zone.

Hey, Jim, Sen. Candelaria is a graduate of Princeton University and a UNM School of Law student. His grammar was spoiled when he went to Santa Fe where they speak in unknown dialects. As for Lavu, owner Andy Lim reminds you that his growing company is providing dozens of high-paying jobs right here in ABQ.


A Dem reader writes of how the confirmation of Sec. of Education designate Hanna Skandera stalled this week in the Dem controlled Senate Rules Committee:

The battle waged to privatize public education has hit a dead end. In addition to Governor Martinez, her political adviser Jay McCleskey and Skandera, another big loser from that committee vote was Teri Cole of the Albuquerque Chamber of Commerce, whose members' failure to generate jobs is a main reason people are leaving the state in droves. Another loser was Marty Esquivel, President of the Albuquerque Public School Board, who sold out the students, teachers, staff and parents that make up his constituency to curry favor with Martinez by endorsing Skandera's confirmation. The problem with hitching your wagon to a given horse, is that you can't unhitch that wagon once the horse starts moving.

Republicans like to see it differently. They argue that since Senate Dems could not defeat Hanna's nomination, she wins by getting to stay on the job.


The ugly string of NM child abuse cases could serve as a spark to get a debate going over the state's depressing standing as 50th in the USA in child well-being. An ABQ attorney says lawmakers need to look beyond the obvious:

One measure introduced in the House--dubbed “Omaree’s Bill"--would give CYFD authority to immediately take custody of a child who is found to have. . . . signs of abuse. A hearing would follow within 48 hours. Albuquerque attorney Colin Hunter said the agency already has the ability to request a 48-hour hold through law enforcement or to seek custody through court proceedings. Hunter, who is suing the agency over alleged civil rights violations in a custody case, said many of the problems stem from incompetency within the agency. “This is not just popping up,” he said of the problems. “It’s a very, very difficult job and it’s a very, very unpleasant job, too, for a lot of people. But it goes beyond them being overwhelmed.”

Omaree's bill has been approved by the House and awaits Senate action.


Lorenzo Pino, who has announced he will seek the Dem nomination for the ABQ Valley House seat held by Dem Ernie Chavez, tell us he is not yet retired from the city of ABQ as we blogged Tuesday. Here is his updated Facebook page.

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