Officials at the New Mexico Finance Authority can finally breathe a sign of relief — and so can taxpayers.

On Wednesday (March 27), the Wall Street ratings firm Moody’s announced it was no longer keeping the state’s bond rating under review in the wake of a scandal that broke last summer that saw an NMFA employee file a fraudulent audit.

Moody’s decided against reducing the state’s top-notch ratings for financial projects, saying in a statement that “the stable outlook reflects our belief that the contributing factors to the rating will remain stable for the long term.”

“With this rating, it will allow us to offer the same activity and low-interest rates that we able to do before (the fake audits),” John Gasparich, the NMFA’s interim CEO, told New Mexico Watchdog. “And the rating means that the taxpayers have a lower cost of financing” projects due to a lower interest rate.

Since the news broke of the fraudulent audit, large-scale projects have been at a standstill at the NMFA while criminal investigations and financial audits were completed.

Gasparich says a $50 million bond project that includes $7 million for Western New Mexico University will proceed.

Back in July of 2012, it was learned that NMFA employee Greg Campbell had forged audits at the authority, which caused ratings agencies to worry that New Mexico’s financial position was less than secure.

In time, it was learned that no money was missing. Campbell was sentenced to five years of probation on Nov. 30 after pleading guilty to three felony charges.

“I could say it was a time pressure,” Campbell told the district court judge at the time. “I just don’t know why I honestly did it.”

In the wake of the controversy, then-CEO Rick May and chief operating officer John Duff lost their jobs.

Sen. Martin Heinrich, photo from Senate website

Getting elected the U.S. Senate has increased the profile of Martin Heinrich but it’s also attracted attention from a conservative website with a national audience.

The Daily Caller, which is based in Washington D.C. and founded by pundit Tucker Carlson, has posted a story about Sen. Heinrich with the headline: Democratic New Mexico senator worked closely with convicted eco-terrorist

The story recounts Heinrich’s membership on the board of the New Mexico Wilderness Alliance prior to start of Heinrich’s political career. One of the members of the board during that time was David Foreman, the founder of the radical environmental group called Earth First!

According to the New Mexico Wilderness Alliance’s website, Foreman is still on the board.

In 1991, Foreman pled guilty to conspiracy to damage the property of an energy facility. Records indicate the incident and the guilty plea occurred before Foreman and Heinrich had met.

From the Daily Caller story:

New Mexico Wilderness Alliance meetings took place in Foreman’s home, where Heinrich was a frequent guest, according to a source close to the New Mexico environmentalist community.

Foreman’s wife, Morton, made multiple financial contributions to Heinrich’s 2012 Senate campaign, totaling $1,750.

This isn’t the first time that Foreman’s relationship with Heinrich has come up.

Back in 2008, when Heinrich first ran for Congress, the Albuquerque Journal looked into the issue:

Foreman helped found the radical environmental group Earth First! in the 1980s. But Heinrich said he never condoned that group’s methods.

“There have been times when even on that board we argued very different approaches on how to do things. I think I had a relatively beneficial impact on them in taking a very mainstream approach.”

Heinrich prefers to call himself a “conservationist” rather than environmentalist.

“I’ll be the first to fault some environmental organizations for not being good compromisers,” he said, “for not getting what they want done by reaching out to people who are different.”

Heinrich went on to defeat Republican Darren White.

After four years in the U.S. House of Representatives, Heinrich ran for the Senate this past fall and defeated Heather Wilson by 6 points.

Conservation groups including the Sierra Club went hard after Wilson during the campaign and while Wilson said that electing Heinrich “would be a disaster for the state of New Mexico,” Foreman’s name did not come up over the course of the race.

The Daily Caller story reported that the Sierra Club spent $2 million in negative ads against Wilson and that the “League of Conservation Voters was Heinrich’s largest campaign contributor during the 2012 election cycle, donating $154,374.”

The Daily Caller said a spokesperson for Heinrich did not return a request for comment on the story.

An e-mail from New Mexico Watchdog to Heinrich’s office on Monday asking for any comment also went unreturned.

LIKE FATHER, LIKE SON, LIKE UNCLE, LIKE GRANDAD: George P. Bush has entered politics, running for Texas Land Commissioner. New Mexico Watchdog photo

His father used to be the governor of Florida, his grandfather was the nation’s 41st president and his uncle was the country’s 43rd chief executive. Now 36-year-old George P. Bush is entering the political arena, announcing earlier this month that he’ll run for Texas Land Commissioner.

But will his famous name hurt him as much as it will help him at the polls?

“In some respects it can because people will have some judgments about me without giving me a full and fair hearing,” Bush told New Mexico Watchdog after he spoke to a gathering of Republicans last Saturday in Albuquerque. “But that’s part of the business and I knew that coming into it.”

Although he grew up in Florida where his father Jeb was governor, George Prescott Bush has been active in Texas politics since graduating from Rice University in Houston in 1998. He and his wife live in Fort Worth, where Bush manages an energy and technology-focused investment firm.

“I’m a man in my own right,” Bush said. “I obviously love my family and embrace their history but I think voters will kind of look past the name and look at what I have to present.”

Overall, Bush said the family name is “net positive” for him and judging that between November and December of last year he raised $1.3 million for his nascent campaign, it certainly figures to help him get a leg up in next year’s race for land commissioner, which has proven to be a stepping stone to higher office in the Lone Star State.

Bush was in Albuquerque, speaking to Republicans about one of his favorite topics — appealing to Hispanic voters.

“We don’t have to sell out our principles to attract Hispanic voters,” Bush said, adding, “It’s time for Republicans to lead.”

Bush — whose mother was born in Mexico and was the daughter of a migrant worker – speaks fluent Spanish and helped establish the Hispanic Republicans of Texas and the Maverick PAC to encourage young and Latino candidates to join the GOP.

While Mitt Romney received just 27 percent of the Hispanic vote last November, Bush says Republicans “don’t need to change anything” when it comes their message but they “need to change the messenger.”

“Again, I think it goes back to the tactics,” he said. “Engaging the community, getting down to the street level, getting down to the barrio, showing up at events — not before an election day but literally after an election day and build that relationship over the course of time.”

Here’s video of our New Mexico Watchdog interview with Bush:

GOING GRANULAR: Republican Party boss Reince Priebus says the GOP needs to match the Obama team when it comes to organization. New Mexico Watchdog photo.

Six days after issuing what’s been called an “autopsy” following a loss in the November presidential election, the chairman of the Republican National Committee told New Mexico members of the GOP that the party’s message doesn’t need to be fixed but that its delivery of that message needs an overhaul.

“We have to be a full-time, year-round party,” Reince Preibus said Saturday night (March 23) of Barack Obama’s victory over Mitt Romney. “You can’t compete if you’re running a 5-month operation when the other party is running a 5-year operation. … Republicans had 80 employees in 2011. The Obama campaign had 800 in Florida.”

Priebus did not talk to the local media before his speech and afterwards as he and his entourage hurried to catch a flight, Priebus was approached by New Mexico Watchdog and James Monteleone of the Albuquerque Journal. When asked by New Mexico Watchdog if he could answer one quick question, Priebus said, “Uh, I’m not going to do that guys,” shutting the door of the SUV.

Priebus spoke to the crowd of 300 at the Hotel Albuquerque for about 20 minutes without a script.

“I’ll tell you what this party needs,” Priebus said. “It’s real simple stuff … What we need to do is build a national party like the way you’re doing in New Mexico … You’re doing things right.”

Romney fared poorly with minority groups last November, winning just 27 percent of the Hispanic vote. While Hispanics in New Mexico lean towards Democrats, Republicans have held their own in the state, with Gov. Susana Martinez enjoying high poll numbers in her three years in office.

Priebus said the national Republican Party is about to launch a $10 million community outreach program will send “hundreds of people” across the country, particularly minority communities.

“Barack Obama had a granular, coast-to-coast operation,” Priebus said. “We didn’t. We’re going to be that granular, coast-to-coast party.”

In the wake of the November election defeat, there’s been debate within the GOP as to where it should go.

Speaking at the Conservative Political Action Conference a little more than a week ago, two of the young lions in the party offered differing visions.

Sen. Marco Rubio of Florida said, “We don’t need a new idea. There is an idea. The idea’s called America and it still works” while Sen. Rand Paul of Kentucky described “the GOP of old” as “stale and moss covered.”

“We don’t have time to divide our party,” Priebus said Saturday night. “We gotta go back to welcoming anyone who walks through that door … We don’t need to be labeling people, ‘You’re a bad Republican’ … Reagan said someone who is 80 percent my friend is not 20 percent my enemy. I want to build this party.”

The keynote speaker at the dinner was George P. Bush, the son of former Florida Gov. Jeb Bush and whose mother was born in Mexico. The younger Bush helped establish the Hispanic Republicans of Texas and the Maverick PAC to encourage young and Latino candidates to join the GOP.

“We don’t have to sell out our principles to attract Hispanic voters,” Bush said, adding, “It’s time for Republicans to lead.”

Rep. Steve Pearce of the 2nd Congressional District in southern New Mexico – one of just two Anglo Republicans in Congress in a district that is predominantly Hispanic – also talked about the necessity for Republicans to reach minority voters.

“The mistake we as Republicans make is we sometimes assume there are people who don’t want to communicate with us and so we don’t communicate with them,” Pearce said.

“The world hasn’t passed us by. The world is in desperate need of what we’re selling — things like personal responsibility.”

“The problem is, the message has been delivered very poorly,” Republican Party of New Mexico chairman John Billingsley told New Mexico Watchdog. “The message has perhaps been delivered in a very negative way instead of positive way and that’s the primary thing we’re trying to change as well.”

***

For more about the internal debate Republicans are having about their future, click here to read an article by Peggy Noonan in the Wall Street Journal and click here to read the cover story in the most recent issue of The Weekly Standard by Matthew Continetti.

And here’s a quick interview we did with George P. Bush, who recently announced that he’s running for Texas Land Commissioner:

KEEP COOL WITH COOLIDGE: A new biography of the 30th President takes a different look at his career

Given the power, attention and influence amassed by U.S. presidents for nearly a century, it’s hard to imagine a chief executive who actually questioned the limits of power.

But Calvin Coolidge did.

After ascending to the presidency in the summer of 1923 upon the death of Warren G. Harding, Coolidge presided in the White House during the Roaring Twenties and was considered a cinch to win re-election in 1928.

But the New Englander who was known for his dry wit and terse demeanor passed on the chance, saying, “Ten years in Washington is longer than any other man has had it—too long!” and retired to his home in Northampton, Mass.

While other presidents such as FDR, Lyndon Johnson and Richard Nixon gave rise to term “the imperial presidency” due to the expansion of influence the executive branch has amassed and as we live in a time of expanding national debt, along comes a book that focuses on the overlooked 30th president.

Conservative writer Amity Shlaes has written a book whose simple title — “Coolidge” — exemplifies the laconic nature of the man and offers a revisionist view of Coolidge that stands in stark relief to a modern age where presidents of both parties often seem to aspire to become masters of the universe rather than public servants.

And the book is resonating with readers. “Coolidge” is currently No. 15 on the New York Times best-seller list for hardcover non-fiction.

Shortly before his death in 1933, Coolidge confided to an old friend: “I feel I no longer fit in with these times.”

But Coolidge was no anachronism. Shlaes points out that “Silent Cal” didn’t resist modernism — strongly supporting aviation, home wiring for electricity, and the onset of the telephone and automobile.

And at a time when the Ku Klux Klan went through a revival across the country (Democrat Woodrow Wilson may have considered himself a progressive but his views on race were nothing short of regressive), Coolidge spoke in favor of the civil rights of African-Americans and Catholics and the influence of the Klan greatly diminished during his six years in office.

Coolidge slashed taxes from the World War I top rate of 70 percent to 25 percent and, through wielding the veto pen some 50 times, helped eradicate the country’s large budget deficits and created surpluses instead.

Although not an isolationist, Coolidge was reluctant to enter into foreign alliances, which was not surprising since he was Harding’s running mate in a campaign that promised a war-weary America “A Return to Normalcy.”

Modern-day historians have relegated Coolidge to lower-half status among American presidents, largely because the Depression hit a little more than one year after he left office.

Shlaes argues that Coolidge was much less to blame than the policies of the Federal Reserve and the counter-productive Smoot Hawley Tariff of 1930 but whether you agree or disagree with her assessment, “Coolidge” is quietly moving up the best-seller list in the month since its release.

“Shlaes delivers a finely muted drama — the tale of an unprepossessing man who overcomes, prevails, exits with honor and establishes something admittedly special: an American archetype,” USA Today said in a review while columnist Michael Barone wrote that the biography establishes Coolidge as worthy of reconsideration and puts him in a “far different light than the antique reactionary depicted by the New Deal historians.”

For my tastes, the man who once said, “the world is full of educated derelicts” is cool in my book.

***

And here’s a long C-SPAN interview conducted by the peerless Brian Lamb with Shlaes about putting the book together and includes a rare piece of film of Coolidge speaking:

And here’s a brief print interview with Shlaes on why historians give Coolidge short shrift.

PARTY PLATFORM: Because the Legislature did not act to curb the use of EBT cards in strip clubs and elsewhere, the state stands to lose more than $5 million in federal funding for the poor in 2014.

A bill aimed at curbing abuse of Electronic Benefit Transfer cards sailed through the state House of Representatives and two Senate committees but was never heard on the Senate floor in the just-completed 60-day legislative session.

And that could mean a loss of an estimated $5.5 million in Temporary Assistance for Needy Familes (TANF) funding for New Mexico by early next year.

The EBT debit cards are given to the needy to pay for necessities. But as first reported by Jim Scarantino of New Mexico Watchdog, some recipients have made withdrawals from liquor stores, casinos, bars, smokeshops and even strip clubs.

Not only is such use a waste of taxpayers’ money, it’s a violation of federal law.

Responding to nationwide reports of similar abuses, Congress in February 2012 restricted the use of TANF money at strip clubs, liquor stores and casinos.

The sponsor of the bill, HB 12, was Rep. Nate Gentry, R-Albuquerque, who said he’s worried that now that the legislation died, the state may not get in compliance by the deadline — which is mid-February of 2014 — and the $5.5 million could disappear.

“We would have to get (a new bill) passed with an emergency clause” next year, Gentry told New Mexico Watchdog Thursday.

“Some people have said we can get in compliance by getting a regulation promulgated by the Human Services Department,” Gentry said, “but I don’t know if that’s good enough (for the federal government).”

DOLLARS IN DANGER: Some $5.5 million in federal money is in jeopardy if New Mexico doesn’t get in compliance with federal guidelines for restrictions on EBT cards.

The Human Services Department oversees the distribution and tracking of EBT cards.

New Mexico Watchdog left a voicemail message with the department. As soon as we get a response, we’ll post it.

In a statement during the session, Gov. Susana Martinez said she would sign the bill if it landed on her desk.

“Cash assistance is designed to help feed struggling families, not for entertainment,” Martinez spokesman Greg Blair said. “Tightening the rules for EBT use in order to comply with federal requirements is only common sense.”

But why didn’t the bill get heard?

HB12 was passed through its final committee hearing on March 11 — five days before the legislative session ended.

Sen. Michael Sanchez, D-Belen, is the Senate Majority Leader and determines which bills are heard on the Senate floor. HB12 was on the Senate calendar in the final days of the session but was never taken off the table. In a 9-1 vote, Sen. Sanchez was the only member of the Senate Judiciary Committee to vote against HB12.

New Mexico Watchdog left a voicemail message with Sanchez Thursday as well. Again, as soon as we get a response, we’ll post it.
Update 3/22: Sen. Sanchez called us back on Friday and said, “We just ran out of time” with HB 12. “It got there in the middle of the hectic final days. There were a couple others (bills) that were in the same situation.”

Although the percentage of withdrawals from EBT cards in New Mexico at places such as liquor stores and strip clubs is small, EBT abuse has been a national problem.

In the state of Washington, for example, in 2010 an investigation by a Seattle TV station revealed that 13,000 welfare recipients took out millions at casinos. The investigation prompted the state to initiate a crackdown that reduced that number to less than 100.

RNC BOSS COMING: Reince Priebus, the chairman of the Republican National Committee, will speak in Albuquerque on Saturday, March 23.

Just four months after seeing Mitt Romney lose to Barack Obama, the head of the Republican National Committee comes to Albuquerque as the GOP does some national soul-searching.

Reince Priebus, chairman of the RNC, speaks at New Mexico’s annual Lincoln Day dinner Saturday evening (March 23) and one of the topics of conversation will center on how Republicans can better attract Hispanic voters.

In November, Romney received just 27 percent of the Latino vote, compared to 44 percent that George W. Bush received in 2004 — the last time the GOP won a presidential election.

Lt. Governor John Sanchez has his own suggestions.

“We got our marching orders the day after the election results last fall,” Sanchez told New Mexico Watchdog in an online chat while attending the National Lieutenant Governors Association meeting in Washington D.C. “The Republican Party has to do a much better job with what kind of tone we set, how we communicate with Hispanics — not just Hispanics but all Americans.”

LATINO APPEAL: Lt. Governor John Sanchez says its imperative for Republicans to reach more Hispanic voters.

Priebus appeared on “Face the Nation” on CBS last weekend, previewing a $10 million community outreach program will send “hundreds of people” into communities across the country, particularly minority communities.

“We have to relate things to people’s lives, we have to win the math war, but we’re going to have to learn how to win the heart war,” Priebus said. “And that is, in presidential elections, what’s plaguing our party.”

Priebus may be looking to get some clues from New Mexico.

While the state’s House and Senate have Democratic majorities, the top three executive seats — Governor, Lt. Governor and Secretary of State — are held by Republicans in a state with one of the largest Hispanic populations in the country.

“What we really need to talk about is how to provide economic opportunity and the ability for Hispanics to climb that ladder of success one rung at a time without sounding nasty, without sounding mean,” Sanchez said.

But working out a policy dealing with immigration and workers in the country illegally may be a difficult balancing act when it comes to keeping the conservative base on board.

For example, Iowa Republican Steve King objected to Priebus’ call for embracing an immigration reform package.

Talking to the conservative online publication The Daily Caller, Rep. King said, “We cannot abandon the rule of law in an effort to try to send a message to people that are moving away from the Republican Party generally for other reasons.”

Sanchez sees the problem can be solved.

“I’m not suggesting amnesty is the way to go but we can find solutions,” Sanchez said. “If we can send a man to the moon and return him safely, what was it, 40 years ago, we can deal with the issue of immigration. And I think it’s an opportunity for us because going forward, the Hispanic vote will decide the future of both political parties.

“And I want to make sure that the Republican Party becomes the majority party. And we can’t do that without having Hispanics and other people of color, women and young people coming back to what we believe the answers lie — that is strong, pro-growth, free market, capitalistic, conservative values.”

***

Here are seven graphs from the Washington Post with some sobering news for the GOP when it comes to appealing to Hispanics: http://www.washingtonpost.com/blogs/the-fix/wp/2013/03/18/the-republican-problem-with-hispanic-voters-in-7-charts/

Here’s video of the interview we had with Lt. Governor Sanchez, who was accompanied by the Lt. Governor of Oklahoma, Todd Lamb, via the Republican Lieutenant Governor’s Association:

By the way, Lamb said that of the 45 states with lieutenant governors, 30 are Republicans.

Saturday’s Lincoln Day dinner in Albuquerque is sold out.

The 60-day session in the Roundhouse ended in dramatic fashion Saturday (March 16) as a last-second tax package that tied in a number of other pieces of legislation rolled through the Senate and House as the clock struck noon. (Click here to read the details.)

Did Mimi Stewart dislike it?

Is the new pope Argentinian?

We talked to the Democrat from Albuquerque immediately afterwards:

 

But Senate Pro Tem Mary Kay Papen, D-Las Cruces, is happy with the compromise:

 

So is Gov. Susana Martinez. We asked her about the last-second deal:

 

Some things got done in the just-completed legislative session in Santa Fe — such as reforming the Public Regulation Commission, which has been beset by a string of embarrassing incidents.

And some things didn’t get done — like requiring that kids who can’t read at a minimal level by the end of the third grade to get retained, which has divided Republicans and Democrats.

Our friends at the Associated Press have come out with a list of some of what survived and died on the vine at the Roundhouse in 2013.

And keep in mind, Gov. Susana Martinez has 20 days to look at what did pass and decide whether or not to wield the veto pen.

Here’s the link to the AP story: http://www.seattlepi.com/news/crime/article/Highlights-of-51st-New-Mexico-Legislature-4360194.php

It wasn’t taken up on the Senate floor until the final 35 minutes of the 60-day session and a bill aimed at closing what advocates say is the gun show loophole died one step short of reaching the governor’s desk.

“This bill will come back,” Senate Majority Leader Michael Sanchez, D-Belen, said on the Senate floor of House Bill 77 that called for establishing a procedure to align the state’s mental health and criminal conviction records with the federal instant background check system.

As the session went into its final days, HB77 generated all the conflicting feelings, odd political alliances and passion over the 2nd Amendment and firearms in general that has roiled the entire country.

On the one hand, the expected battle lines between gun rights conservatives who hated the bill and liberals loved it emerged.

But there were a number of Roundhouse Republicans who supported the bill and took heat from the right for doing so — including Gov. Susana Martinez, who said she’d sign the measure if it got to her desk because of the bill’s provision dealing with mental health.

Yet while rank and file Democrats in the Roundhouse supported the bill, it didn’t get heard in the Democratic-controlled Senate Judiciary Committee until the final days of the session and didn’t get heard until 11:25 a.m. Saturday — 35 minutes before the session came to an end.

“I knew because of the comments that had been made by other senators that there were numerous amendments (that would have been added),” said Sen. Sanchez. “What would have happened if we had introduced in the early morning (Saturday), it would have been filibustered and we wouldn’t have gotten any other pieces of legislation out of here.”

There had been speculation in the Roundhouse that some Democrats didn’t want to see the bill head to the governor’s desk because, by signing the legislation, it would give her an opportunity to be seen as a moderate.

The bill’s sponsor, Rep. Miguel Garcia, D-Albuquerque, disagreed with that perception.

“That never crossed the path of this bill whatsoever,” Rep. Garcia told New Mexico Watchdog, who said he’ll bring the bill back in the 2014 session.

The governor mentioned the gun show bill when talking to reporters Saturday after the session ended as one of the things in which “I have received flack within my own party” and Sanchez said, “The governor and I don’t see eye to eye on many things but we agree on this bill.”

Then, he added a bit of jab, saying, “If she truly supports this bill she’ll put it on the call” when the Legislature meets again.

DOWN TO THE WIRE: At 11:52 a.m. a legislative expert (seated) discusses the details of a last-minute tax package that included provisions of an incentives bill for TV and film sponsored by Rep. Antonio “Moe” Maestas (standing, left). The compromise deal passed as the 60-day session came to an end.

It was New Mexico politics and its wildest, wooliest and wheeling-and-dealingest.

The 60-day legislative session ended with a compromise among Democratic leadership, Republican leadership and the office of Gov. Susana Martinez on a tax deal that rolled a number of hot-button issues, including approval of the so-called “Breaking Bad” bill that provides incentives for TV series shot in New Mexico.

“Today we beat the buzzer,” Gov. Martinez said at a news conference, adding that she would not call lawmakers back for a special session as she had threatened to do. “It wasn’t a victory for one political party or another. It was a victory for New Mexico.”

Democratic Senate Pro Tem Mary Kay Papen of Las Cruces agreed saying, “Nobody got everything they wanted but I believe it’s responsible … I think it was a good package.”

Her legislative nemesis, Senate Majority Leader Michael Sanchez, D-Belen, was more circumspect.

“It was good old-fashioned horse-trading,” said Sen. Sanchez but “it’s happened in this body before when a piece of legislation — a big. major piece of legislation — comes through here and later on we find out there are mistakes in it.”

“It is trading to a degree,” said Republican House Minority Leader Don Bratton, R-Hobbs. “Everybody wants something different … there are those pressures that are brought to bear, if you can give up this, we will concede that.”

HAPPY WITH WHAT SHE GOT: Gov. Susana Martinez said Saturday’s last-second deal by the Legislature is a good one for the state and she won’t call for a special session. New Mexico Watchdog photo, 3/16/13.

But a number of liberals were spitting mad about the deal that literally happened at the last second.

“I think we got a corporate income tax (deal) shoved down our throat,” said Rep. Mimi Stewart, D-Albuquerque. “That bill will cost the state hundreds of million of dollars. We were not allowed to discuss it … This was a royal screw job.”

Here are some of the particulars of the deal that had a number of initiatives rolled into one:

*of the state’s annual $50 million cap on film incentives, up to $10 million of unused money can be rolled over to the next year and the state’s rebate for producers increases from 25 percent to 30 percent for TV series shooting at least six episodes in New Mexico

*institutes what’s called “combined reporting” — something liberals have been seeking for years — by “big box” retail companies, but only unless they have non-retail operations in the state employing at least 750 people

*lowers the top corporate income tax rate to 5.9 percent (it’s now at 7.6 percent), to be phased in over 5 years

*tightens the qualifications for a pair of existing tax incentives that have ended up costing the state money in forgone revenue

When asked by New Mexico Watchdog if the last-second nature of the tax deal could mean unintended consequences that could come back and bite taxpayers, Martinez said, “Oh, we’re confident it’s going to work for New Mexico,” adding, “We’re really going to be able to incentivize businesses to come to here. I have no doubts it’s going to work.”

Late Saturday morning (March 16), it looked like no deal was going to be reached but then at 11:11 a.m. — just 49 minutes before the session was to end — the plan was introduced on the Senate floor and leadership on both sides of the aisle coalesced around it.

“This is something everybody can hate,” said Sen. Steve Neville, R-San Juan County, “but it’s got a lot of good things in it.”

“This corporate tax package makes us more competitive and helps close loopholes,” said Sen. Tim Keller, D-Albuquerque.

“We’re taking all this on faith, objected liberal Sen. Gerry Ortiz y Pino. “It looks like local governments will be taking it in the shorts.”

But the bill passed on a 34-8 vote at 11:25 a.m. and was sent to the House.

“This is major, major tax policy,” said Rep. Antonio “Moe” Maestas, D-Albuquerque, who had sponsored the “Breaking Bad” bill that hung on the balance and brought in a legislative expert to hurriedly go over what was in the bill.

“We’re in an unusual situation,” Speaker of the House W. Ken Martinez, D-Grants, said in the understatement of the session.

A few moments later, Speaker Martinez called for a vote, saying, “It’s 11:59.”

“It’s 12 o’clock,” Rep. Stewart yelled.

The vote came down 46-18 in favor.

The Speaker slammed his gavel after announcing the vote, “It is now 12 o’clock.”

“It’s 12:01,” someone shouted but the deal was done.

“In the hope of getting one little piece, we’re giving up the ranch,” Rep. Eliseo Lee Alcon, D-Milan, said afterwards.

Another progressive, Sen. Jacob Candelaria, D-Albuquerque, voted “no” but hopes the compromise deal will work.

“I needed to ensure that it would not result in a tax on food and medicine,” Sen. Candelaria said. “I made that promise to my constituents. The bill will not allow that … but if that (fiscal) impact is there and it’s good for the state, she should sign the bill.”

The last-minute jobs package means the governor will not have to bring lawmakers back to Santa Fe for a special session.

“I will review the state budget carefully,” Martinez said. “I may have some line-item vetoes but overall, I will sign the state budget and we will avoid the need for a special session.”

***

Here you policy nerds, here are some of the specifics of the tax deal:

1. Repeals Gross Receipts Tax deduction for manufacturing consumables of the following industries:

a. Power generation

b. Natural resource processing

c. Meal preparation

2. Tightens requirements for the High-Wage Jobs Tax Credit and extends it from 2015 to 2020

3. Single sales factor election for manufacturers phased in over 5 years

4. Lower top Corporate Income Tax rate to 5.9% phased in over 5 years

5. Requires combined reporting of corporate income tax by “big box” retail companies unless they have non-retail operations in the state employing at least 750 people

6. Phases out “hold harmless” distributions to local governments over a 15 year period after a two-year.

7. Creates new “hold harmless” local option GRT authority of up to 3/8%. This would be imposed on the existing GRT tax base, i.e. no tax would be imposed on food or medical services.

The governor’s office says the net fiscal impacts to the state’s general fund are expected to be positive as it expects reduced spending on the hold harmless distribution will offset significant tax reform and that the corporate income tax cut will gradually increase to almost $150 million per year.

“This will provide both broad-based relief and targeted economic development,” the governor’s office brief stated.

Responding to a change in the state Constitution overwhelmingly supported by in New Mexico, Roundhouse lawmakers passed legislation bolstering the qualifications to the Public Regulation Commission on Friday (March 15).

Under the new requirements — which came after six members of the House and Senate concurred — future candidates for the PRC must possess:

• 10 years work experience in a field related to regulated industries or;
• A combination of 10 years work experience in a field related to regulated industries and related education resulting in a degree
• And be required to fulfill a minimum 32 hours of continuing education each year.

In its short history, the PRC has been embarrassed by a string of incidents involving its commissioners, including lawsuits, arrests and convictions.

Currently, the only requirements PRC candidates have to meet is being over 18, be a legal resident of the state and not have a conviction on their records.

“What we have crafted will restore integrity in the body that touches the lives of all New Mexicans,” said Sen. Tim Keller, D-Albuquerque.

The legislation now heads to the desk of Gov. Susana Martinez.

MINIMUM WAGE, MINIMUM CHANCE? The NM Legislature passed a minimum wage raise but it could be vetoed.

Democratic Party-backed legislation that would give New Mexico the fourth-highest minimum wage hourly rate in the US passed the Roundhouse Friday, even though it appears Republican Gov. Susana Martinez will veto it.

In a 37-32 vote, the House of Representatives on Friday (March 15) approved Senate Bill 416 that would boost the state’s minimum wage from $7.50 to $8.50 an hour. Only Washington state, Oregon and Vermont have higher rates.

The federal minimum wage stands at $7.25 an hour, although President Obama has called for increasing it to $9 an hour.

“This is about the people,” said Rep. Carl Trujillo, D-Santa Fe Democrat. “This is about an extra $40 in the pocket
every single week.”

Republicans argued the higher wage rate would hurt small businesses and could cause employers to hire fewer people because their costs would increase.

Rep. Nate Gentry, R-Albuquerque, tried to amend the bill, saying the $8.50 rate would get vetoed by Gov. Martinez. A spokesman for Martinez said she’d be willing to accept $7.80 an hour.

“The last thing I have to worry about is the governor,” said Rep. Eliseo Lee Alcon, D-Milan, as the amendment was defeated.

GOING TO THE GUV: Another pension plan fix is heading to Gov. Susana Martinez

Just two nights after sending a bill to the desk of Gov. Susana Martinez aimed fixing the $6.2 billion fiscal hole in one of the state’s major pension plans, the Legislature passed another piece of legislation affecting the estimated $6 billion in unfunded liabilities in New Mexico’s other big plan.

On Friday (March 15), the House of Representatives passed Senate Bill 115, which affects the Educational Retirement Board, the state pension covering teachers, public education employees and state college faculty.

“This bill has us headed in the right way to solvency,” Speaker of the House W. Ken Martinez, D-Grants, said on the House floor just before the bill passed on a 54-13 vote.

The plan requires teachers and other educators to pay more into their pensions if they earn more than $20,000 a year. It would change benefits for educators hired in the future, including imposing a minimum retirement age of 55.

The bill survived an attempt to amend it by Rep. Mimi Stewart, D-Albuquerque, who had a competing version of the legislation and argued SB115 would lower cost-of-living increases for retirees.

“This bill is the ‘screw the educators’ bill,” said Rep. Sheryl Williams Stapleton, D-Albuquerque, who is a public school administrator. Her remark elicited groans and grumbles from the floor, where decorum is expected of members.

Republicans weren’t crazy about the bill, either. Eleven of the 13 no votes came from GOP members, which may indicate that SB115 may not be embraced by the Republican governor.

“It’s better than Mimi’s bill but it’s not all the way there,” said Rep. Nate Gentry, R-Albuquerque, and Republican House Whip.

Back on Wednesday, the Legislature passed a bill aimed at fixing the substantial fiscal problems facing the other major state pension plan, the Public Employees Retirement Association.

Click here to read more about the PERA plan heading to the governor’s desk.

FEELING BETTER: Luciano “Lucky” Varela is expected to return to the Roundhouse for the final day of the legislative session.

In what doctors say appears to be a reaction to blood pressure and allergy medication, longtime Roundhouse state rep Luciano “Lucky” Varela was rushed to a hospital Friday morning (March 15) after he fell unconscious for about 20 seconds.

House Speaker W. Ken Martinez ordered the hallways of the third floor cleared so Rep. Varela could be transported

The 13-term representative from Santa Fe who turned 78 last month says he’s doing fine and he plans to return to the State Capitol tomorrow for the final day of the session, according to a statement released by House Democrats.

“I want to thank everyone for helping me this morning, especially Speaker Martinez and my staff,” Varela said. “Fortunately, this was a minor episode, but everyone reacted so quickly. I am also grateful to those who expressed concern and offered prayers. I’m feeling much better and should be back for the final hours of the session.”

This is the third health-related incident to occur in the current 60-day session. Senate Majority Leader Michael Sanchez, D-Belen, has been treated twice, including an angioplasty procedure to clear blockages in his chest/heart area. Sanchez is 62 years old.

Two years ago, Sen. Linda Lopez, D-Albuquerque, was treated for feeling dizzy and complaining of high blood pressure but came back to the session after one day.

BLOCKING SUNSHINE? Open government advocates fear the Legislature is trying an end-run around releasing public e-mails. Photo of ceiling of NM state capitol.

New Mexico’s attorney general Gary King doubts whether a public e-mail exemption the Legislature has claimed for itself would stand up in court and told New Mexico Watchdog his office would side with opponents of the bill if there’s a court challenge.

“I don’t think the Legislature can exempt themselves from making public documents that they prepare and such from (the Inspection of Public Records Act),” King said.

Earlier this week, lawmakers passed House Concurrent Resolution 1, a rule that calls for the Legislative Council Service — the research arm of the Roundhouse — to act as the clearinghouse for releasing lawmakers’ emails requested under open records laws.

The vote was 48-16 vote in the House and 39-1 in the Senate.

But what’s raised hackles is the Legislature’s claim that it doesn’t have to turn over e-mails from their public, government-issued addresses.

A number of journalists, political advocates and residents who often file IPRA requests have objected, saying lawmakers must abide by rules the other two branches of state government — the executive and the judiciary — must follow.

Legislators base their exemption on Article IV, Section 13 of the New Mexico Constitution:

Privileges and Immunities

Members of the legislature shall, in all cases except treason, felony and breach of the peace, be privileged from arrest during their attendance at the sessions of their respective houses, and on going to and returning from the same. And they shall not be questioned in any other place for any speech or debate or for any vote cast in either house.

But King disagrees with such a broad interpretation. “It certainly isn’t covered by the constitutional provision that they’ve cited,” he said.

He said his office isn’t ready to fight the rule in court but should an IPRA challenge come, “then certainly we’d be willing to take an action if they violate the law.”

While the House barely approved the rule by the necessary two-thirds majority, the measure breezed through the Senate with only Sen. Pete Campos, D-Las Vegas, voting against it.

“It was a stance that I needed to take.” Campos said.

Among the senators voting yes were Sander Rue, R-Albuquerque, who has prided himself in passing sunshine laws, and Bill Soules, D-Las Cruces, who, in campaign messages posted on his Facebook page, hails a commitment to open government.

Soules said he based his vote on having the Legislative Council Service handling “thousands of emails.”

“Who is it that would go and be the one actually to look as to which (emails) get released and which ones don’t get released?” Soules said. “And that I think is the biggest concern and that was my concern. By any means, anybody can come and look at my emails; I don’t have any problem with that because I understand what I should be doing in public and not doing in public.”

Rue said the rule helps clear up which emails exchanges should be released.

“To the extent we can make that clear, that’s fine, but if we can’t it still becomes very interpretative and subjective,” Rue said before the vote.

But at the same time, opponents of Gov. Susana Martinez — including some Democrats in the Roundhouse — over the past year criticized her office for using private rather than public e-mails.

Isn’t it hypocritical then for the Legislature to grant itself an exemption?

“Yeah, it’s true,” Sen. Gerald Ortiz y Pino, D-Albuquerque, said. “(But) we believe the governor is in a different position than citizen legislators who have no authority on their own.”

Legislators are claiming they act collectively, not individually.

So the difference is that the governor has a full-time job and legislators work part-time at the Roundhouse?

“That’s right, exactly,” Ortiz y Pino said. “We have no authority individually, where hers is. It’s the Legislature as a group of 112 people (70 members in the House and 42 in the Senate) who make rules and set policy … but the governor, who is all by herself, I mean, she is the authority.”

But Gwyneth Doland of the New Mexico Foundation for Open Government is dead-set against the move.

“Everyone likes to stand up and say they want transparency,” Doland said the day after the Roundhouse vote. “They want to vote for bills that impose transparency on every other part of government, but it’s extremely disappointing to not see (practically) anyone in the Senate … try to champion transparency here.”

****

Here’s video of some of the principals in the story: (Sorry for the sideways video of Sen. Ortiz y Pino.)

TRYING TO BEAT THE CLOCK: A bill requiring background checks at gun shows in NM heads to the Senate floor, 3/14/13.

The only gun control bill left standing in the current 60-day legislative session passed through the Senate Judiciary Committee in a vote that came at 11:23 p.m. Thursday (March 14), with just a day and a half left in the 60-day legislative session.

House Bill 77, which requires background checks in an effort to close what gun control advocates call the gun show loophole, passed on a 6-4 vote, with all the Democrats on the committee voting yes and all Republicans voting no. The bill now heads to the Senate floor. Correction: Democrat Michael Sanchez was absent so the final vote was 5-4.

“This is a good bill that we worked on with representatives on the other side of the aisle,” said the bill’s sponsor, Rep. Miguel Garcia, D-Albuquerque.

Supporters and critics of HB77 waited well into the night to watch the proceedings and voice their opinions to the committee members who voted on the bill without debate.

The bill — which already passed through the House and Republican Gov. Susana Martinez indicated she’d sign — now has to beat the clock.

If the Senate (where Democrats hold a 25-17 advantage) passes the bill in a floor vote, it would then have to go back to the House for concurrence because HB77 was amended slightly in an earlier Senate committee.

Concurrence can happen relatively quickly but there’s no guarantee as the Legislature will adjourn at noon on Saturday.

The only other gun control measures introduced this session were bills that would have restricted assault weapons and large-capacity ammunition feeding devices in New Mexico and banned firearms in the Roundhouse — except for military, law enforcement and security.

But the assault weapons bill was tabled in a House committee with a Democrat casting the deciding vote; the firearms ban in the Capitol has gone nowhere.

As for HB77, it passed the House, 43-26, with a handful of Republicans supporting it. Gov. Martinez told reporters she would sign the bill if it made it to her desk in its current form because it establishes a procedure to align the state’s mental health and criminal conviction records with the federal instant background check system.

Steve Pearce talking to constituents in Animas, NM. Photo courtesy of Wall Street Journal

Earlier this week, the Wall Street Journal ran a positive profile piece on the only Republican in New Mexico’s Washington delegation, US Rep. Steve Pearce, the Republican in Congressional District 2 that makes up the southern part of the state.

An excerpt:

When describing his brand of constituent service in a district that is larger than the state of Florida, Mr. Pearce said, “I see myself as a big windshield wiper, just working my way back and forth, back and forth.”

Democrats, who view Mr. Pearce as a prime target for the 2014 midterm election, are recruiting potential challengers.

“I don’t know if there’s been a politician in New Mexico more out of touch with the state or his district,” said Javier Gonzales, chairman of the state Democratic Party.

But Mr. Pearce’s opponents will need to do more than just wave the party flag. Bald and bespectacled, he has won the southern half of New Mexico five times since 2002. In November, he nabbed around 42% of the Hispanic vote, or nearly twice what Mitt Romney received nationally, and better than Republican Susana Martinez‘s share when she won the New Mexico governor’s race in 2010, according to various polls.

The article says Pearce is one of just two Anglo Republicans in the House whose districts are predominantly Hispanic.

Click here to read the whole story. There’s also a video interview with Pearce that runs 3 three minutes and 41 seconds.

SENDING THEM BACK: NM Gov. Susana Martinez told NM Watchdog she will send the Legislature back to a special session unless a last-second deal is reached on the budget.

Gov. Susana Martinez told New Mexico Watchdog in a video interview that unless there is a last-second change to the $5.9 billion budget passed by the Legislature, she will veto it — which means lawmakers will be called back to the Roundhouse in a special session.

“Yes, at this point the way the budget exists, I’m going to veto it,” Gov. Martinez said Thursday afternoon as the current 60-day session is down to its final two days.

“We have to” have a special session “if I veto that budget,” Martinez said. “I was told today by the leadership that it may not get to my desk until next week and the session ends Saturday. I was hoping I would get it today so I could return it to them so they can fix it. I’m willing to negotiate until Saturday at noon.”

One of the items Martinez doesn’t like in the budget package is elimination of a $3 million pilot program for merit-pay for public school teachers. The Senate replaced it with $2 million in stipends for teachers who agree to work in schools in high poverty areas with low student performance.

“Merit pay does not work,” said Sen. John Sapien, D-Albuquerque, after the Senate passed the budget bill while Sen. Howie Morales, D-Silver City, said, “There was a substantial amount of money that went to (the governor’s) initiatives, but there is concern with merit pay.”

“The Legislature did not put the priorities that education is funded at the level that it should be,” Martinez told New Mexico Watchdog, adding she isn’t happy that the tax changes she’s looking for haven’t materialized.

“We don’t have a tax reform package to make sure that while sequestration is upon us, that we’re inviting companies to come here and that we’re up with competition with Texas, Colorado and Arizona,” Martinez said. “If we don’t have that, we’re going to start losing jobs.”

Democrats dismissed the governor’s tax measures as “corporate tax cuts to out-of-state companies” and have pointed to the fact that the budget the Martinez is so critical of passed with Senate Republicans joining Democrats in a unanimous vote earlier this week.

“I find it fascinating and interesting that it was 42-0 in the Senate,” Rep. Sheryl Williams Stapleton said during the debate. “But once it go here the other side (Republicans) and all (their) members will not vote for it.”

“The budget was in much better condition when it left the House than when it left the Senate,” Martinez said Thursday.

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Here’s our Watchdog interview with the governor:

 

VETO THREAT: A budget has passed the Legislature but Gov. Susana Martinez has threatened to veto it.

Despite a threat of a veto from Republican Gov. Susana Martinez, the New Mexico House of Representatives passed along a $5.9 billion budget package that it received from the Senate on Wednesday (March 13).

“I fear this bill will not get signed and we’ll have to start over,” Rep. Dennis Roch, R-Texico said on the House floor but Democrats pushed back and passed the amended budget on a 37-33 vote that saw all Republicans vote no and all the Democrats except Rep. Sandra Jeff of Crownpoint vote yes.

Rep. Jeff said she was concerned that the legislation — House Bill 2 — didn’t do enough for Native Americans as far as public education. Update 3/14: In a statement, Jeff added she didn’t like the budget because she said it insufficiently funded Native American suicide prevention, domestic violence and education initiatives: “I am appalled to see this happening to my people. We are elected to serve as representatives of our communities and are voices are being ignored.”

“Yes, we may have to come back,” Rep. Luciano “Lucky” Valera, D-Santa Fe said, “but the government will have to be shut down, just as we’ve seen in Washington D.C. … This legislation has something for everyone.”

The House vote came one day after the budget bill passed through the Senate on a unanimous 42-0 vote. But despite Senate Republican support for the budget Tuesday, the Martinez administration has given it a thumbs-down.

“This unbalanced approach provides government employee pay raises, but cuts common-sense education reforms, such as funding for early childhood literacy programs and merit-based pay raises for teachers,” spokesman Enrique Knell said in a statement. “The budget also shortchanges economic development initiatives, which is particularly concerning given that a tax reform package has not yet been agreed to.”

After HB2 passed the House, the governor released her own statement, echoing the charge that the budget to be sent to her is “unbalanced.”

“The year’s legislative session will end in three days,” Martinez said “I’m very disappointed in the lack of compromise by the other party … While the Democrats want me to agree to pay increases for government employees and larger subsidies for Hollywood corporations, they have refused to pass meaningful education reforms to improve student achievement, and they have refused to lower taxes to make New Mexico more competitive to help businesses grow, and to create more jobs.”

But House Democrats pointed to the unanimous vote in the Senate.

“I find it fascinating and interesting that it was 42-0 in the Senate,” Rep. Sheryl Williams Stapleton said during the debate. “But once it go here the other side (Republicans) and all (their) members will not vote for it.”

One of the sticking points for Martinez and House Republicans is a change in the bill from adopting a $3 million pilot program for teacher merit pay to a $2 million package for stipends for teachers who agree to work in schools in high poverty areas with low student performance.

“Show the research that if you give merit pay, you will get different outcomes,” Rep. Stapleton said.

Given the necessity for the Legislature to adopt a budget, if Martinez doesn’t sign it into law the chances of the Legislature getting called back to Santa Fe for a special session increase to almost a certainty.

“It’ll be vetoed and we will be brought back here at enormous expense to our taxpayers,” Rep. Nate Gentry, R-Albuquerque said.

“We need to think independently, we need to vote independently,” said Rep. Georgene Louis, D-Albuquerque.

Click here to read more about the budget plan, which includes a small pay raise for state employees.