Thursday, January 13, 2022

Nukes And Oil Still Powering State Economy, Plus: Egolf Makes Peace With Land Grant Advocates, State House GOP Primary Featuring Conservative Firebrand Draws Eyeballs And More Reader Debate On Repealing SS Tax 

Let's kick it off today with a few notable notes from the econ beat.

ABQ's Sandia National Labs reports their spending reached a record $3.9 billion in fiscal year '22, including $1.4 billion in annual payroll for over 12,200 NM employees. 

Then there's the announcement that oil giant ExxonMobil, a major presence in the oil fields of the SE NM Permian Basin, will be the main sponsor of the ABQ International Balloon Fiesta for the next three years. 

Permian production has exploded and energy taxes and royalties are largely responsible for the historic budget surpluses accumulating in Santa Fe. 

ExxonMobil recently announced that they plan to achieve net zero greenhouse gas emissions in the Permian by 2030. That's a sweetner for skeptical enviros.

Nuclear weapons budgets are projected to continue upward and the latest forecasts from Wall Street predict oil will again flirt with the $100 a barrel price point. It's back in the 80's as we write. 

New Mexico's economy today is tied more than ever to federal spending and oil exploration and it's hard to envision when it won't be.


After widespread criticism over his decision to dissolve the House committee that deals with land grant issues Speaker Brian Egolf is making the peace:

Egolf announced. . .the new Rural Development, Land Grants, and Cultural Affairs Committee will be established in the coming session, and will be chaired by Representative Susan Herrera (D-Embudo). Two other standing committees will also be newly titled: the Agriculture, Acequias, and Water Resources Committee and the Government, Elections, and Indian Affairs Committee. Together, these committees will respond effectively to the needs of land grant and acequia communities within the Legislature. 

“Land grants, acequias, and their contributions to our state have been critically important to me. . .I am grateful for the advice and input that we received from land grant and acequia leaders. I am glad that we have charted a path forward which will result in a new committee structure that will both elevate land grant and acequia issues and bring positive change for every land grant heir and acequia parciante."

Hispanic lawmakers, in particular, saw Egolf's first move as a slight. This second one should be enough to keep the peace. 


John Block 
There's another Republican primary besides the '22 Guv and Light Guv races that will keep GOP watchers entertained. That would be the nomination contest for state House District 51 in Alamogordo. 

The district is currently represented by Rep. Rachel Black who is seeking a third term but who has now drawn a challenge from young John Block, an unabashed Trumper and editor of the conservative news outlet the Pinon Post.

Block, an ardent critic of MLG and all things Dem, says Black is not strong enough on tax relief and missed an abortion vote that he didn't specify. He says: 

Alamogordo needs an America-First conservative champion who shows up and takes the fight to the Radical Democrats. The hard-working men and women of District 51 should not be forced to settle for a representative who takes them for granted. This election, our community finally has a choice. We need to finally send a fighter to the Legislature.

Rep. Black
Black, an Otero County Deputy Treasurer, says she has brought $4.5 million in capital outlay to the SE NM district. She has not yet commented on the Block challenge but the Black vs. Block race will soon be joined. Block has already released a slickly produced video announcing his candidacy. 

GOP consultants point out that the twenty something Block is an openly gay Republican and that Alamogordo is Bible Belt territory. They say that could be problematic in scoring an upset. 

Black took her seat in 2018, succeeding Yvette Herrell who is now the southern district congresswoman. No D's need apply in House 51. This one is all R all the time. 


The debate over repealing the state tax on Social Security amounts to a tempest in a teapot, argues tax expert James O'Neill of ABQ's O'Neill Consulting who joins this week's blog debate on the matter: 

Joe: Lowering the state income tax on only middle- and upper-income New Mexicans can be done in many ways. One of the cheesiest is granting a deduction for the federally-taxable part of Social Security retirement benefits while claiming that it would be a great boon for the poor. 

Under current federal and state tax law, no one (except some married persons filing separately) whose only income is Social Security pays any New Mexico income tax -- even if the recipient gets the maximum benefit (over $90,000 for married couples). See for yourself by completing the worksheet on page 31 of the 2021 form 1040 instructions. Even when there is a small amount of taxable income at the federal level, existing provisions of New Mexico's law reduce the state liability to zero. The point of these proposals is to allow other features, like the standard deduction, to apply fully to other income. Even that benefits only New Mexicans earning at least median levels of income. The poor, as usual, get nothing. 

The 30 day session begins Tuesday and that's when we will next be with you at NM Politics with Joe Monahan. 

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Wednesday, January 12, 2022

Pat Lyons Back In La Politica And Seeking State's #2 Post, Plus: MLG's Hydrogen Bomb And Debating State's Social Security Tax  

Pat Lyons
Look who's back in La Politica--or in his case let's call it the lion's den. 

It's none other than former state land commissioner, former public regulation commissioner and former state senator Pat Lyons telling all within shouting distance that he is running for the '22 GOP nomination for lieutenant governor.

Within the GOP Lyons, 68, doesn't have to shout very loud. He's a well-known campaign veteran who has brought home numerous wins for his party before losing a bid for land commissioner four years ago to Dem Stephanie Garcia Richard. 

Given his statewide experience, GOP insiders think Lyons of Quay County is the frontrunner for the Light Guv nomination. His main foe is former Dona Ana County Commissioner Isabella Solis who may be a better match demographically for the R's in the general election but who faces a major test against Lyons.

Solis switched from the Democratic Party to the GOP in 2019. In 2020, she ran unsuccessfully against Dem State Rep. Joanne Ferrary. 

Dems wil be ready for Lyons if he is the nominee. They already label him "pay to play Pat" over his fundraising techniques while serving on the PRC.

The GOP Lt. Guv race plays out this way. Solis, a Hispanic woman from the south, is a good match for either Mark Ronchetti or Rebecca Dow, the leading candidates for the GOP Guv nod. She balances the ticket nicely with either, but perhaps more with Ronchetti who comes from ABQ while Dow comes from the rural T or C area. 

Lyons matches up okay with Dow, but an all Anglo, all male ticket with Ronchetti would be a downer for the GOP. 

Aerospace engineer Ant Thornton is the third candidate in the race. 


It may be a nice title but New Mexico's lieutenant governor gets little attention. Look at MLG's proposed budget for the coming fiscal year. Her office budget is proposed to go up a hefty 12.3 percent to $5.174 million. And for the office of Lt. Gov. Howie Morales? Her proposed budget for him is $585,000. That's an increase of exactly zero. 


She may call it her "signature legislation" for the 30 day legislative session that starts next week but it appears doubtful the legislation will reach her desk for her signature. 

The Guv is pushing hard for state hydrogen production to the chagrin of the environmental community and others who think this is a way down the ladder priority given other pressing matters facing the state.

What's surprising is how dismissive the Roundhouse already is to the Guv's proposal. Why is MLG willing to show such weakness so early in the campaign? 


With the incredible amount of money in Santa Fe our motto for the legislative session is don't raise taxes on anything. In fact, consider rebating some of that loot to Mr. and Mrs. New Mexico. 

That brings us to Fred Nathan of Think NM that is leading the charge on the repeal (with sponsorship from ABQ Sen. Bill Tallman) of the state tax on Social Security. A good idea, we blogged Monday, until you get to the part that raises tobacco taxes to pay for the cut. Nathan explains:

Opponents were concerned that repealing the Social Security tax would deprive state government of $80 million. So we made the bill revenue neutral. Opponents also argued that wealthy New Mexicans should continue to pay the tax because they can afford it. So this year’s bill continues to tax seniors with incomes over $72,000 as an individual or $124,000 as a couple. This targets the tax relief to middle income seniors since very low income seniors already have an exemption. The reason that we decided to raise tobacco taxes is because health experts have been calling on the legislature to increase those taxes to combat youth smoking and vaping. New Mexico ranks third highest for teen vaping and fifth highest for teen smoking. Because teens have the least discretionary income, they are the most impacted by higher taxes. 

Instead of that $80 million some lawmakers fret over (a drop in the proverbial bucket with the mountain of money they have) what they should worry about is the 8 bucks or more their smoking constituents are ponying up for a pack of cigs while making 15 bucks an hour. Not even vice taxes deserve to be increased in this environment of riches. And finding recurring revenue to pay for the cut is a no-brainer.

But good luck, Fred, just pray they don't bring back the food tax. 

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Tuesday, January 11, 2022

"Battle Ready" Rep. Herrell Makes First ABQ Appearance Since A Slice Of The City Was Sent Into Her District, Plus: Dan's Plan Dashed: Benton Takes ABQ Council Presidency Over Lewis, And: A Tax Cut Misfire  

Rep. Herrell in ABQ
Go ahead progressives, let those chills roll up your spine because here she is--right in your backyard. 

The "she" is none other than conservative Republican US Rep. Yvette Herrell who over the weekend made her first major public appearance in the city that contains the newest addition to her congressional district.

She appeared at the Bernalillo County GOP Pre-Primary Convention and cheerily welcomed any of her new ABQ constituents who may have been in the audience. 

Her new district takes in a large swath of ABQ's Westside and some South Valley precincts, a map the Dems hope will make Herrell vulnerable to defeat this November. But be careful what you wish for. 

Herrell has been nothing if not spunky and confident since the gerrymander, vowing to win a second term and not giving an inch on her conservative views despite having a good part of the big city now in her mostly rural and small town southern district.

Pundits are taking notice, questioning whether progressive former Dem Las Cruces City Councilor Gabe Vasquez, the only announced Democrat for the seat, is a step too far left in trying to put the district back in the Dem column. 

The progressive nightmare is a Herrell re-election, giving her a foothold in ABQ while that same circumstance is a Republican dream. 

Heck, don't be surprised if she soon opens up an ABQ office, further rattling Dem nervous systems.

Herrell is not shying away from her new challenge, according to delegates at that weekend convention who report she is "battle ready."

In a way she can thank the progressive Dems for her street fighting skills. She honed them during two of the toughest campaigns waged in recent state history against Dem Xochtil Torres Small (in '18 and '20), winning one and losing one. 

What will it be in '22? Who knows, but given Herrell's zeal for combat chilled progressive spines don't seem out of order. 


Councilors Benton and Lewis
The plan of freshly elected Republican ABQ City Councilor Dan Lewis to take the council by storm in the new year ran into an obstacle Monday. Councilors did not get aboard the Lewis for council president bandwagon, instead electing liberal Dem Councilor Ike Benton the new president.

Upon winning election to his westside council seat last November Lewis told associates he was confident he would be elected the new council president which added four new members as a result of the city election. But Lewis, who has made no secret that he harbors mayoral ambitions, could not build a coalition and that dashed Dan's dream. He was, however, elected council vice-president.

Insiders tell us Lewis thought he had a deal with Benton who would vote for him for president in exchange for making Benton chair of the council’s most important committee but pressure on Benton from Dems not to make a deal with Lewis prevailed and pulled the rug out from under Lewis. Councilors Bassan and Pena then provided the critical votes to make Benton president. 

GOP Councilor Brook Bassan will now chair the Committee of the Whole which presides over the city budget, the aforementioned most important committee.

Bassan and Lewis have a frosty relationship. That was made clear when with the backing of Mayor Keller last month she proposed a $110 million bond issue for city improvements that ultimately was shot down by the old city council. Lewis disliked the plan, saying it should be decided by the new council.

Lewis' misfire for the presidency was shared by another Louis--new Westside Dem City Councilor Louis Sanchez. He voted for Lewis and ended up a loser on his first major council vote.

Sanchez and Lewis have positioned themselves as major foils of Mayor Keller, which is fine, but they might want to do more homework before taking their next test. 

That next test for Councilor Lewis is a multi-pronged program, including a $70 million cut in the city's gross receipts tax and placing a limitation on the pandemic powers of the Mayor. He unveiled the plan shortly after his loss of the presidency.


Speaking of misfires, ABQ Dem state Senator Bill Tallman wants to eliminate the state tax on Social Security. Okay, so far so good. But then he wants to raise the tobacco tax to pay for the cut. That means the working class fella already paying 8 bucks or so for a pack of smokes now has to pay even more so the mostly comfortably retired Social Security recipients get a break? 

Come on, Bill, right now Santa Fe has more money than God. Just eliminate the SS tax and leave the puffers alone. They're already paying their fair share and then some.

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Monday, January 10, 2022

Newfound State Wealth Produces Only Modest Budget Plans From Guv And LFC; Confounded By The Cash? Plus: 2022 Budget Politics 

"New Mexico has the opportunity for generational change with the amount of money we have." 

So declared state Senate Finance Committee Chair George Munoz upon presentation of the Legislative Finance Committee's (LFC) $8.46 billion budget recommendation for fiscal year '23 that starts July 1. 

The premise is correct but the standout recommendation in both the LFC budget and the Guv's is a 7 percent pay hike for teachers and state employees. That will be greeted warmly by a public that wants to support educators and that will grudgingly admit that the state's bureaucrats deserve a pay bump after suffering stagnant wages for years. But where's the "generational" change to put New Mexico on a path to getting out of the nation's ratings cellar? That's proving to be an elusive target--if it's being targeted at all. 

Both budgets bolster currently funded programs and the LFC does mention the landmark Yazzie court ruling that demands the state correct the educational inequities for at risk public school students (mainly Native American and Hispanics) and recommends $180 million to specifically address the court order. 

But there's not much budget time devoted to the ongoing (and growing) behavioral health crisis in the state, a state with one of the highest rates of drug addiction in the nation, record crime rates in ABQ, stunted student learning growth due to Covid school lockouts and a myriad of other social ills all to familiar and that often seem so stubborn and insurmountable. 

As intractable as the challenges seem, without resolution you are left with a state with gold overflowing from its vaults while daily living decays for far too many. 

Beyond our long-held acceptance of the status quo, perhaps the problem is the pandemic that has everyone looking more inward. Getting by day to day and month to month is a much more urgent matter than pondering a macro vision for a statewide socio-economic revival.

When faced with a daily death count, logistical challenges for once simple chores and ongoing economic uncertainty, a state's child well-being rating or poverty percentage can seem even more abstract to the average voter. The political leadership responds in kind.

New Mexico, as Senator Munoz might say, is now in possession of potentially life changing money. Neither the Governor, the LFC or the public has figured out precisely what that means. Like the problems we confront, the vastness of the newfound wealth is proving to be confounding. Unwinding and fully understanding the complexity of choices will take much longer than any 30 day legislative session. 

The LFC budget is here. The Governor's budget is here


That there were no sweeping programs proposed in MLG's election year budget is no surprise but if her popularity were higher among independents she may have had more room to maneuver. 

A PPP poll conducted last August had only 33 percent of independents approving of her job performance and 54 percent disapproving. R's say more recent polling continues to show her under water with the indys who often lean moderate to conservative. Combined with overwhelming GOP opposition, that puts her in a possibly fragile area right around 50 percent.

That is not the kind of political picture that allows a Governor to swing for the fences. Not that MLG is necessarily upset about that. Remember, she described herself as a "fiscal conservative" when campaigning n 2018 and in many ways has lived up to that self-reported analysis.

The Guv's handling of Covid would appear largely responsible for her dive with independents. Perhaps an autocratic style laced with a whiff of hypocrisy (Lilly Barrack jewelry) and perceived Draconian measures turned them off. 

And Covid cooped her up in Santa Fe for months on end not mending fences or making new friends on the hustings for well over a year. 

As for the LFC, they are institutionally skeptical of any new programs. In fact, their lean most recently has been to favor what they say are programs that have proven themselves through "evidence based" testing.
That doesn't leave much room for innovation.


Rep. Teresa Leger Fernández as well as Sen. Ben Ray Lujan issued a statement expressing misgivings about House Speaker Egolf's decision to abolish the committee that deals in land grants. Like Lujan, she also says talks with Egolf over the matter have been fruitful. 

On the political front the freshman Democrat is reporting that in the last quarter of 2021 she raised $402,658.77 and had $524,000 in cash on hand. That's up from $250K in cash in the previous report. 

The changed boundaries of the northern district is drawing increased attention to TLF's re-election bid.

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