Sánchez Saturno/The New Mexican

What's she trying do? Send the hawks into cardiac arrest?

MLG stunned the crowd Tuesday as she opined that she is open to taking money from the state's $18 billion Land Grant Permanent Fund and using it to plug a budget hole that could be as much as $2 billion. As antithetical as that may sound to the fiscal right, there could be a deal brewing. But first. . .

The Fund, started at statehood, has been sacrosanct to conservatives who repeatedly say it is meant to ensure stability for future generations. They add that the state gets plenty from it right now (upwards of $800 million a year) from the interest it generates. But clearly, this generation is going to be severely hurt and destabilized in the post-pandemic era. And that had MLG making this news:

. . . .The state’s multibillion-dollar Land Grant Permanent Fund, which draws fees from oil, gas and mineral extraction on state trust lands. . . would not be exempt, she said. Money from that fund is used to support a number of state initiatives, including public education. Legislators from both. . .parties have been reluctant to pull more money from the endowment for fear it could negatively impact future spending, particularly for the public school system. “I am sure there is some trepidation about doing that, but if we are going to have economic recovery … I think we can make a legitimate case that that is an appropriate use in this extraordinary emergency,” the governor said.

But MLG can't just raid the fund. To take the cash out a constitutional amendment would have to be approved by voters. If at the mid-June special legislative session the amendment were approved it would be placed on the November ballot.

One idea apparently informing the Governor's thinking is to take one percent of the fund and devote it to public education--K thru 12. That would free up close to $200 million annually that could then be used to plug the budget gap.

For years advocates for early childhood education have proposed a constitutional amendment that would devote one percent of the fund to their cause. It has been passed by the House but rejected in the Senate. Now with the state perhaps facing its worst budget crisis since the Depression, budget hawks like Senator John Arthur Smith, chairman of the Senate Finance Committee, might bite at the K-12 amendment but not the one for early childhood.

Insiders say  the American Federation of Teachers NM is pushing the K-12 plan, similar to one they backed a number of years ago and that won a sympathetic ear from Smith.

The chairman has a progressive challenger in the June primary but was recently endorsed by the AFT-NM, leaving progressives puzzled. Now the pieces are starting to fit.

Also, taking money from the fund could dampen calls for tax increases to resolve the deficit, another issue near and dear to the conservatives. And it would shut out early childhood advocates who Smith has come to resent and whose amendment he has opposed.

Smith backed away from the Permanent Fund plan when asked Wednesday:

“I still don’t think it’s responsible,” said Sen. John Arthur Smith, the Senate Finance Committee chairman who has long blocked efforts to access the fund. “I fully understand the desire to try and rob Peter to pay Paul, but I think there are other things that can be done between now and then.”

Smith, D-Deming, said his main concern was that dipping into the fund for one fiscal year could open the door to continuing to draw from it again and again. He added that’s likely since legislators expect the current economic downturn to last a considerable amount of time.

He also said the current shortfall is so large it requires a more complex response than just tapping permanent funds and reserves.

We've blogged that some think constitutional amendments can only be considered during "regular" sessions of the Legislature, but that does not apparently cover the Governor placing such an amendment on her call for the special and having it considered by lawmakers.

In any event, there is still the idea that federal coronavirus money awarded to the state could be used to fill the budget hole, even though that money is earmarked for virus relief. And then there are the state's huge reserves of $1.9 billion that can be drawn down.

The problem for the budget year that starts July 1 is a biggie, but the mother of all gaps could be for the year that starts July 2021. It all depends on oil prices, what kind of economic recovery we get and whether DC approves a bill directly appropriating money to help out with state budget deficits.

MLG AND SENIOR GATOR ANALYSIS

Every New Mexico Governor since Gary Johnson in 1995 has set their sights on higher office. All have come up empty-handed. So what about Gov. Lujan Grisham? Well, according to this Senior Alligator she appears to have joined that list of governors. It's an interesting take:

It’s clear that she’s seeking to get her name mentioned for VP.  Recent articles on CNN and elsewhere by people with ties to New Mexico and former Gov. Bill Richardson point to that. There’s little chance she’ll get selected. Her attributes really don’t help Biden with any swing states,  The real catch for MLG would be Secretary of the Health and Human Services Department. The HHS position is a chance to hold the nation’s most important public health job. Public health is where she started and where she considers herself an expert.

There’s a reason that Neera Tanden, former Clinton advisor and head of the liberal think tank Center for American Progress came to New Mexico to visit MLG twice in 2019. It wasn’t to sample the chile.

Was she really enjoying being Governor before the pandemic? MLG’s 2019 was nothing to write home about. She looked frustrated and disappointed in staff/cabinet secretaries that never could move quickly enough. After basking in record oil and gas revenues, the next couple of years will undoubtedly be a slog through an economic nightmare. Similar to her approach to Congress, once MLG figured out she can’t bend the legislature to her will and it’s not that much fun, the fight gets less appealing and it’s on to the next fight.

But MLG shouldn't start calling her travel agent. First, Biden would have to beat Trump in November and then she would have to emerge as a leading HHS contender. No small chores.

As for Lt. Gov. Howie Morales, keep studying your briefing books, Howie--just in case.

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(c)NM POLITICS WITH JOE MONAHAN 2020