"Capitol Report New Mexico" Latest Blog Postings

NM state rep to re-introduce school security bill

Capital Report New Mexico Blog Postings - Wed, 2014-01-15 21:18

ROSWELL SHOOTING INCIDENT: New Mexico Gov. Susana Martinez meets with a student at a prayer vigil Tuesday night following a shooting at a Roswell middle school that injured two students. Facebook photo from Nora Espinoza.

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE – On the heels of a middle school shooting in Roswell that left one student critically injured and another in satisfactory condition, state Rep. Sandra Jeff, D-Crownpoint, says she will re-introduce a bill aimed at beefing up security in New Mexico public schools.

“We have to take precautions and make sure things like this don’t happen,” Rep. Jeff told New Mexico Watchdog on Wednesday.

Last year, Jeff and state Sen. Benny Shendo Jr., D-Jemez Pueblo, sponsored a bill calling for $1.5 million to establish a security infrastructure fund that included creating a visual identity system for students and parents. The bill passed unanimously through the House Education Committee but died in the House Appropriations and Finance Committee.

Jeff said she plans to file a new bill for the upcoming 30-day session that begins next Tuesday that will call for additional security measures, such as installing metal detectors at school entrances and establishing protocols to make sure doors to classrooms are locked.

Jeff said the new legislation will call for more money than last year’s bill but wouldn’t say how much more.

“It’s unfortunate, but that’s the world we live in,” said Jeff, who added that she plans on meeting with Gov. Susana Martinez and Public Education Department Secretary-Designate Hanna Skandera to win their support.

“A lot of rural communities don’t even have a security plan,” Jeff said.

Rep. Nora Espinoza, R-Roswell, attended a prayer vigil on Tuesday night that numbered in the hundreds at the Roswell Civic Center.

“I think (Jeff’s) motives are correct,” Espinoza told New Mexico Watchdog in a telephone interview. “We want to protect our children. But my number one concern is that when a crisis so devastating as this occurs, too many times legislators jump up right away and pass bills. I’d really like to take some time and think about it. My first impression is that it needs to be done by the local school boards and they can do what’s best for their individual schools.”

Jeff said she plans on pre-filing her bill on Friday or next Monday.

The shooting occurred at about 8 a.m. Tuesday and according to reports, a 12-year-old boy at Berrendo Middle School sneaked a 20-gauge shotgun onto school grounds and opened fire in a gymnasium filled with about 500 students before obeying a teacher who told him to put the gun down.

An 11-year-old boy and a 13-year-old girl were airlifted to Lubbock, Texas. The 11-year-old remained in critical condition on Wednesday while the 13-year-old was upgraded from serious to satisfactory condition.

The alleged shooter was taken to a psychiatric hospital in Albuquerque.

“We do not know all the details about this child,” Espinoza said. “But just like in 9/11, this community has come together. There is no blame going around. We’re coming together in prayer for the child and the children who were hurt.”

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

NM Obamacare numbers jump, but where are the ‘young invincibles’?

Capital Report New Mexico Blog Postings - Wed, 2014-01-15 16:04

GOOD NEWS/BAD NEWS: The number of people in New Mexico signing up for individual coverage under Obamacare spiked in December but the number of young people enrolling is lagging.

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE – The number of people in New Mexico signing up for individual policies under the Affordable Care Act increased more than seven-fold in December, but the percentage of young people enrolling is running well below expectations.

“We’re glad that (the numbers) are higher, but we hope to get more,” New Mexico Health Insurance Exchange interim CEO Mike Nuñez told New Mexico Watchdog on Wednesday.

According to the U.S. Department of Health and Human Services, the overall number of people signing up for individual policies in New Mexico increased from 934 at the end of November to 7,688 by the end of December. That means 6,754 people enrolled in December, a 723 percent spike.

“The increase there is really extreme,” Nuñez said. “We’re happy about that.”

On the other hand, just 18 percent of people enrolled so far in New Mexico are between the ages of 18 and 34 — the so-called “young invincibles” essential in keeping the program financially viable.

To keep premiums reasonable, it’s estimated about 40 percent of the total enrollees in the ACA need to fall into that age category. Since young people generally compose the healthiest segment of the population, their premiums help offset the higher costs incurred by the older and sicker people in the plan.

In national figures released earlier this week by HHS, just 24 percent of people between 18 and 34 have signed up for individual policies.

New Mexico’s 18 percent figure for that age group tied for third-lowest among all 50 states. Only Arizona and West Virginia (at 17 percent each) had lower numbers.

Conversely, New Mexico had a higher rate of people between 55 and 64 signing up when compared to the national numbers —38 percent for New Mexico, 33 percent for the U.S.

Citing the national figures, Obamacare critic Avik Roy of Forbes.com, said, “We may not get as far as a true ‘death spiral,’ but for tens of millions of Americans, the law’s promise of affordable health insurance is unlikely to materialize.”

But Obama administration officials say they expect young people to sign up in greater numbers as the March 31 open enrollment deadline approaches. “We are confident based on the results we have now that we’ll have the appropriate mix of individuals enrolled in coverage,” said Michael Hash of the HHS Office of Health Reform.

As for New Mexico, NMHIX will intensify its advertising and marketing campaign to attract more young people later this month. “Given the numbers we’ve got, we’ll be starting a youth-involved campaign,” Nuñez said. “We hope to appeal to that population and bring them in.”

NMHIX has budgeted between $6 million and $7 million for its overall advertising and marketing efforts.

Originally, NMHIX officials were hoping to sign up 83,000 for individual policies, but Nuñez said the glitch-filled rollout of the federal website has caused them to adjust their target number downward.

“Eighty-three thousand is a best-case scenario,” Nuñez said. “A more realistic number is in the 50,000 range” by March 31.

“We’re meeting many of our goals,” J.R. Damron, the chairman of the NMIX, told New Mexico Watchdog. “It’s been a challenge with the individual portion that goes through the federal website but we’re hopeful that our goals can be achieved by March 31.”

In a separate statistic, HHS reports 12,327 people in New Mexico have qualified for Medicaid.

Here’s a breakdown of some of the numbers for New Mexico through Dec. 28:

Click here to read the 29-page HHS report for December ACA numbers.

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

New Mexico finishes 26th in national study on fiscal health

Capital Report New Mexico Blog Postings - Wed, 2014-01-15 09:25

SMACK DAB IN THE MIDDLE: A study of the relative fiscal health of all 50 states ranks New Mexico 26th.

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE — In a recent study ranking the fiscal health of all 50 states, New Mexico falls somewhere in the middle.

Well, at least it’s not 48th or 49th, as we see in so many other national surveys.

Sarah Arnett of the Mercatus Center, a fiscally conservative policy group at George Mason University, looked at four measures of each state’s financial numbers — cash solvency, budget solvency, long-run solvency and service-level solvency.

By combining all four indices, New Mexico finished 26th in the country.

The Land of Enchantment‘s best results came in budget solvency —seventh-best in the U.S. — and long-run solvency — 11th best — while finishing 27th in cash solvency and 41st in service level solvency.

“Service-level solvency is the most difficult to measure because it reflects whether state governments have the resources to provide their residents with an adequate level of services,” Arnett’s working paper said. “A state’s service-level solvency is measured using taxes and revenue per capita, along with expenditures per capita.”

Overall, the study says most states aren’t doing enough to address their respective fiscal problems.

“Despite recent gains in tax revenues and pension assets, the long-term outlook for states’ fiscal condition is negative,” Arnett wrote. “These simulations predict that states will have yearly difficulties balancing revenues and expenditures due, in part, to rising health-care costs and the cost of funding state and local pensions.”

Here’s a look a the state that finished in the Top 10 overall:

States finishing in the bottom 10, which include Illinois, New York and California, lag in a number of other studies on state fiscal issues:

Click here to look at the maps of the four indices, and click here to read the details of the working paper.

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

Battle looms over how to fix NM’s lottery scholarship program

Capital Report New Mexico Blog Postings - Tue, 2014-01-14 16:25

SUGGESTIONS, PLEASE: With the New Mexico lottery scholarship program on shaky financial footing, lawmakers are debating whether to use taxpayer dollars as a long-term solution.

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE – Virtually every member of the Roundhouse realizes the New Mexico Lottery Scholarship program needs to be fixed.

But how to do it — and whether taxpayer dollars should be used to shore up the program — may lead to some big fights in the upcoming 30-day legislative session.

The scholarship program was created in 1995, but in recent years more money is going out than coming in, largely because sales of lottery tickets — such as Scratchers and Powerball — have been flat while the tuition rates at colleges and universities in the state have spiked.

This year it’s estimated $40 million dollars will come into the program, but $67 million will go out in the form of scholarships, which about a quarter of New Mexico’s full-time undergraduates receive.

“Something needs to be done,” Tom Clifford, secretary of the Department of Finance and Administration, said to the House Appropriations and Finance Committee on Monday.

The scholarship program shortfall will be one of the chief topics when the Legislature convenes Jan. 21. Whether to use taxpayer dollars — from the state’s general fund — as part of a long-term solution is a big question.

“I’m not in favor of that,” said Rep. Jim White, R-Albuquerque. “I don’t think that’s a function of government, to pay for college educations. We already pay the universities in the state to the tune of $900 million. Fourteen-percent of our overall general fund budget goes to the higher (education) institutions.”

But Rep. Henry “Kiki” Saavedra, D-Albuquerque, who chairs the appropriations committee, is open to using general fund money as part of a long-term solution.

“They’re not going to make it (financially),” Saavedra said. “So what we’re going to have to do is bite the bullet and put some general fund money in there … We have to do something because, look at who (the scholarship program) helps.”

The program has always been self-sustaining and has never used taxpayer dollars.

But in budget proposals for the upcoming fiscal year, the Legislative Finance Committee and the administration of Gov. Susana Martinez call for temporarily using general fund money to keep the program going as constructed.

The LFC is calling for an immediate injection of $11 million and another $11 million in the coming fiscal year. The governor’s budget calls for $16 million, and Martinez insists it’s just a one-time appropriation and she is against using taxpayer money in the long-term.

“We do not want children who are in college to feel the pain because this fund is not solvent,” Martinez said earlier this month. “We also think (the lottery scholarship) can work within the parameters laid out by the Legislature when they created this fund.”

“I’m skeptical about ‘one time,’ ” said Rep. Paul Bandy, R-Aztec. “Unless you do something, it’s pretty hard to stop.”

Rep. Sharon Clahchischilliage, R-Kirtland, agreed. “The graduation rates haven’t increased” since the lottery scholarships were instituted she said. “No, I wouldn’t want (general fund dollars used as a long-term solution) simply because taxes should be used differently.”

“What I suggest is we de-couple (the lottery scholarship) from tuition fees so that (recipients) get a certain amount of money,” Bandy said. “If there’s a difference, the college can pick it up or they can charge the student.”

Among other suggestions being floated?

*Raising the minimum grade point average from 2.5 to 2.75, although some critics say that would put pressure on college professors to inflate grades so that students on the borderline don’t lose their scholarships

*Increasing the number of credit hours a lottery scholarship student must take from 12 hours per semester to 15

*Capping the dollar amount awarded to each scholarship recipient

*Reducing the length of the scholarships from eight semesters to seven

*Help shore up the program by using revenue from the gaming contracts between the state and Native American tribes, although that would require a good deal of political coordination

*Boost the program’s finances by using money from other state funds, but that would surely lead to push-back from defenders of the programs that would be targeted

*Make the scholarships a means-tested program, so that students from wealthier homes would be left out

“If folks are making a lot of money there’s no reason they need that lottery scholarship (for their kids),” said Sen. Tim Keller, D-Albuquerque.

But Paul Gessing, president of the Rio Grande Foundation, a free-market think tank based in Albuquerque, said a number of scholarship programs for low-income students are in place.

“Unfortunately,” Gessing said in a paper released last week, “low-income students who receive the Lottery Scholarship drop out of the program at twice the rate of other students. Lottery Scholarship dropouts represent a significant loss of limited scholarship resources.”

Among his recommendations, Gessing calls for a “limited tuition voucher” that would allow students to go to any college or university — even ones outside of New Mexico — believing it would provide incentives for students to go to schools that are the best fit for them while encouraging price-shopping.

But Gessing admits that “given political limitations in New Mexico and inertia,” scholarship vouchers “may not be a realistic option.”

Keller said the lottery should be self-sustaining. But, “If we need to supplement it slightly from things like gaming and even some sin taxes like cigarettes and tobacco, I think folks would be willing to do that and that would be okay.”

While White is against using taxpayer dollars as part of a long-term solution, he says he’s open to accepting LFC and Governor’s Office recommendations to use general fund money once, but only once for incoming students in the coming academic year.

“I’m willing to say, ‘Hey guys, we can fix this in other ways, we can’t keep on doing this,’ ” White said. “If you accept that idea and let us start cutting back on the overall reward, yeah, I would be amenable to compromise to save the juniors and seniors.”

***

Click here to read the Rio Grande policy paper on the lottery scholarship.

And here’s NM Watchdog video of Sen. Keller, talking about some options:

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

Moody’s says NM’s pension fix falls short

Capital Report New Mexico Blog Postings - Mon, 2014-01-13 16:30

NOT GOOD ENOUGH: While praising New Mexico’s pension reforms, the Moody’s ratings service says the state needs to do more.

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE — One of the so-called “Big Three” ratings agencies in the country says legislation aimed at shoring up a $12 billion shortfall in New Mexico’s two major public pension plans falls short.

Unfunded liabilities for the Educational Retirement Board and the Public Employees Retirement Association are still too high, Moody’s Investor Service says in an analysis released Friday.

Moody’s praised a recent New Mexico Supreme Court decision upholding cost-of-living adjustments to the ERB pension plan, but added, “Going forward, even with the reforms, the unfunded liabilities will remain elevated, which will be a continued source of risk to local governments participating in the plans,” the analysis said.

The executive director of PERA, Wayne Probst, disagreed.

“Reading this I guess I’m reminded of that old saw about how pessimists always seem smarter than optimists but optimists generally live in bigger houses,” Probst said in an email to New Mexico Watchdog.

Officials at PERA and ERB pushed for the changes last year, saying they would be sufficient to get the two pension plans back on firm financial footing.

“The ink on (the legislation) has barely dried and the impact of the reforms are only beginning to be felt, so we believe what is needed is a period of time to take stock of where we are before making judgments that it wasn’t enough or was too much,” Probst said.

Moody’s says New Mexico has historically set contribution rates too low.

“Mending the large liabilities would likely require deeper cuts to benefits, more substantial increases in employer and employee contributions, or having a sustained multi-year trend of making contributions at full actuarial required levels,” the Moody’s analysis said.

One trustee on the ERB board, Brad Day, made similar arguments last year during the legislative session in Santa Fe. He agrees with Moody’s.

“The best I can say is that doing something is better than doing nothing,” Day said in telephone interview with New Mexico Watchdog. “But the problem is, the something that was done is so minimal that it won’t get the program in better shape.”

Day says the expected annual return on investments of 7.75 percent is too optimistic.

“You’re either going to put in an extra 4 percent in there or cut benefits,” Day said. “To sit here every year and pretend everything is fine and dandy (is wrong). There’s a storm coming up … These liabilities are lot bigger than they’re showing.”

Supporters of the legislation have taken criticism from both sides.

While Moody’s and people like Day say the reforms don’t go far enough, the biggest threat to passing the legislation last year came from PERA and ERB members who said the bills called for too much sacrifice from pension members.

“The reforms enacted last year, coupled with an improving investment environment, appear to have set PERA on a steady course towards long term stability and resolving our unfunded liability,” Probst said. “We didn’t get into this overnight and there will be ups and downs as we climb out of it but our most recent actuarial valuation shows the Fund at 100 percent, well within a 30-year period and at 108 percent-funded by 2043, which is reason enough for cautious optimism.”

“Right now, it’s just an illusion,” Day said. “We’re discounting the liabilities at too high a rate.”

The New Mexico Legislature passed — and Gov. Susana Martinez signed — the legislation last year.

Click here to read Moody’s analysis. Its report on New Mexico begins on Page 8.

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

Editorial: Contemplating the Rocky Mountain high

Capital Report New Mexico Blog Postings - Sun, 2014-01-12 09:33

Rob Nikolewski. Photo courtesy of Santa Fe New Mexican/Clyde Mueller.

It’s reefer madness!

No, not the stories of people lined up around the block on the first day of the new year in places across Colorado to buy marijuana for recreational purposes.

I’m talking about the world-turned-upside-down reaction from opposite political corners in the aftermath of the Rocky Mountain State passing the law.

Last week, the New York Times, the bastion of all good-thinking liberals, came out with an editorial bringing up concerns about Colorado’s “Marijuana Experiment.”

Yet at the same time, the National Review, the bastion of all right-thinking conservatives, came out with its own editorial, headlined, “Sensible On Weed,” congratulating voters for making “the prudent choice.”

So the Gray Lady’s editorial board, which has never had a problem with espousing social issues such abortion or same-sex marriage gets its knickers in a twist over Colorado’s decision but the National Review is cool with it?

Cats living with dogs!

Now the libertarian in me has no problems with Colorado’s decision (or that of Washington state, which is in the process of instituting its own pot decriminalization measure). In the words of the über-free marketeer Milton Friedman, “The government has no more right to tell me what goes into my mouth than it has to tell me what comes out of my mouth.”

But while I support decriminalization I am willing to listen to those who oppose it, such as former Carter administration Health, Education and Welfare Secretary Joseph Califano, who has argued that for every dollar we spend on taxing alcohol and cigarettes, we spend nine dollars in health care costs, criminal justice expenses and social welfare spending.

Here in New Mexico, former state Rep. Dennis Kintigh of Roswell — who used to be an FBI narcotics officer — points out that prescription drugs are manufactured to extremely high standards and heavily regulated and taxed.

“Why then do we have this nightmare with prescription drugs,” Kintigh told me in an interview last year. “If that’s the panacea that solves everything, how can there be this drug overdose death rate that is going through the ceiling with prescription drugs?”

He makes a good point — and a few others, too. You can see my interview with Kintigh, as well as one with a supporter of decriminalization, at: http://newmexico.watchdog.org/16671

No, my chief concern with the Colorado law is based on issues centering on the collision of government and money.

In Colorado, marijuana will be taxed at 25 percent (plus the usual state sales tax of 2.9 percent) and sales are expected to generate $67 million. Should that come to pass, great.

But we know from experience how government works and I wouldn’t be surprised that, in time, as Colorado officials grow accustomed to that tax income, marijuana is looked upon as just another sin tax and — as we have seen with cigarettes and liquor — the tax rate increases.

When that tax balloons to 40 to 50 percent, there will be a powerful incentive to create a black market and sellers will come up with illegal ways to supply what consumers want.

You can rail about the social and moral advantages and disadvantages of legalizing marijuana but my worry is over government’s inexorable desire for more.

Look here at New Mexico.

When the Legislative Lottery Scholarship was created in the mid-1990s, voters were assured that no taxpayer dollars would be used to fund the program. But now, with lottery ticket sales stagnant and tuition costs rising, the lottery scholarship is running out of money and both the Governor’s Office and Legislative Finance Committee have called for spending between $16 million-$22 million from the general fund (taxpayers) until a long-term fix is made.

Here’s another example:

While in grad school in New York City, I read that when the George Washington Bridge started construction in 1927, it was under the presumption that once the bonds on the bridge were paid off, the tollbooths would come down. That was 87 years ago and the tolls are still up. And the cost going into the city today on the GW? Thirteen bucks.

So if you think a government-run program that generates millions can stand a decent chance of reining itself in, well, I’ve got a bridge to sell you.

(This column originally appeared in the Santa Fe New Mexican. Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski)

Rob, the buzzkill

Capital Report New Mexico Blog Postings - Fri, 2014-01-10 17:46

By Rob Nikolewski │ New Mexico Watchdog

I’m appearing tonight (Friday, Jan. 10) on “New Mexico In Focus,” the weekly public affairs show broadcast on KNME-TV, the PBS affiliate in Albuquerque at 7 p.m.

One of the topics on the panel discussion hosted by Gene Grant is the potential growth in “pot tourism” now that Colorado has legalized recreational marijuana sales.

Panelists Sophie Martin, an Albuquerque attorney, Dan Foley, a former member of the New Mexico House of Representatives, and Julie Ann Grimm, the editor of the Santa Fe Reporter, and I talked about what may happen in the Rocky Mountain State now that the law has passed.

Some think there could be a big boost in the number of people coming to Colorado and that pot sales will lead to a tax windfall. Already, the state expects to take in $67 million in taxes on marijuana.

But I offer a cautionary note for the long-term.

Here’s the segment:

And here’s a web extra of the panelists talking about how much gay marriage may boost out-of-state visitors to New Mexico and a snarky tweet sent out by former Lt. Governor Diane Denish following the death of a billionaire who made sizeable political contributions during his career:

 

You can watch the entire one-hour program tonight at 7 p.m. and online by clicking here.

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

National study says New Mexico’s debt equals $24,041 per person

Capital Report New Mexico Blog Postings - Fri, 2014-01-10 12:42

INDEBTED: A study from a fiscally conservative group claims that New Mexico’s total debt equals $24,041 per person in the state.

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE – James Madison once said, “I go on the principle that a public debt is a public curse.”

By that measure, New Mexico has some work to do, judging from the numbers released earlier this week by a fiscally conservative policy group.

A study by State Budget Solutions shows total state debt amounts to $24,041 for each and every person in New Mexico, placing the Land of Enchantment’s debt obligations as the seventh-highest in the country.

The figure for states overall was $16,178 per capita.

“This is the fourth time we’ve done this report and we’ve reached a new shocking total in state debt,” said Cory Eucalitto, who crunched the numbers by looking at a variety of debt measures for each state that go beyond what most state budget offices take into account.

For example, the State Budget Solutions study looks at market-valued unfunded public pension liabilities, benefit obligations for public employees and outstanding unemployment trust fund loans.

Using those figures, State Budget Solutions calculates that New Mexico’s state debt is more than $50 billion, which is 28th-highest. But since New Mexico’s population is relatively small, that means its per capita debt is $24,041, moving New Mexico to seventh in the country.

The state’s official debt numbers are different.

According to figures compiled by the New Mexico Board of Finance, a debt affordability study puts the state’s unfunded debt at about $3.7 billion.

“The (SBS) study includes state pension funds and other retirement benefits, which shifts the number considerably,” Department of Finance and Administration spokesman Tim Korte told New Mexico Watchdog. “Without knowing the methodology but assuming the group’s $50 billion figure for New Mexico is accurate, the figures presented in the study reaffirm the need for a cautious budgeting approach.”

By some measures, New Mexico actually fared pretty well in the SBS study.

For example, New Mexico had the nation’s 13th-lowest ranking for outstanding unemployment trust fund loans and 20th-lowest for outstanding debt.

On the other hand, New Mexico had the third-highest ranking for the amount of debt as a percentage of the gross state product, at 62 percent. Only Hawaii (64 percent) and Ohio (63 percent) finished higher.

The overall tenor of the SBS report is downbeat, claiming its numbers show state governments combine to face $5.1 trillion in debt nationwide.

“When you add in all of the other components of state debt that don’t necessarily show up in traditional state government financial reporting, the problem is so much larger,” Eucalitto said in an interview with Watchdog.org. “And too many people and too many elected officials don’t understand there are these other trillions of dollars … that states need to address.”

The DFA’s Korte said that with New Mexico’s spending restraint and budget reserves of nearly 10 percent, “we can focus on central priorities such as education, economic development, public safety and water infrastructure while remaining prepared for any unforeseen issues.”

“Concerns remain about the heavy federal presence in New Mexico as well as a natural gas market that remains flat because of large supplies,” Korte said in in an email.

Natural gas plays a large role in the relative strength or weakness in New Mexico’s economy. It’s estimated that an increase of just 10 cents in the price per thousand cubic feet of natural gas translates into $10 million more revenue into the state’s general fund.

Click here to read the entire State Budget Solutions state debt report.

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

Santa Fe mayor denies political favoritism in restaurant deal

Capital Report New Mexico Blog Postings - Wed, 2014-01-08 22:55

GRILLED ABOUT THE AIRPORT GRILL: Santa Fe Mayor David Coss denies any political favoritism regarding a restaurant located at the city’s municipal airport.

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE – Santa Fe Mayor David Coss says he showed no political favoritism in handling a controversy involving a former campaign contributor, a union supporter and a restaurant at the city’s airport that is facing an Internal Revenue Service lien.

“I’ve always been a supporter of the airport,” Coss told New Mexico Watchdog in a terse interview right before the weekly Santa Fe City Council meeting began Wednesday night.

Coss denied there’s any sweetheart deal for the Santa Fe Airport Grill, run by Duke City Gourmet Co. LLC. A state document lists the restaurant’s officials as film industry union representative Jon Hendry, a long-time political Coss supporter, and Duke City Gourmet managing partner Lisa Van Allen.

According to the Santa Fe Reporter, Van Allen and her business have contributed nearly $2,300 to Coss, who has been mayor since 2006 and ran unsuccessfully for the New Mexico House of Representatives in 2012.

Coss is a longtime union supporter and has served as organizer, negotiator and president of Communications Workers of America State Government Local.

“That lease (for the Airport Grill) was done a long time before I was on the scene,” said Coss, who insisted that any political contributions had no bearing on the city’s dealings with the restaurant that is alleged to owe more than $108,000 since 2010.

Santa Fe airport manager Francey Jesson has said she noticed discrepancies in the restaurant’s payment history when she started working for the city earlier this year,.

According to the Santa Fe New Mexican, Jesson was worried the city was possibly out of compliance with federal regulations because Duke City was paying rent at below fair-market value.

In a timeline of events, Jesson wrote that she met with Santa Fe officials, including city manager Brian Synder. “If I remember correctly, it was at the start of this meeting that the mayor, who was wrapping up a meeting with Brian, mentioned to ‘be nice to them,’ in reference to the restaurant owners,” Jesson wrote.

Coss denied any favoritism to New Mexico Watchdog and city spokeswoman Jodi McGinnis Porter told reporters Tuesday, “The mayor routinely instructs staff to be courteous in dealing with members of the public, contractors and partners.”

New Mexico Watchdog spoke to Hendry, a union representative well-known for his work on behalf of the movie industry. Hendry said he cut off his relationship with Duke City Gourmet years ago.

“It’s a company I’ve not been associated with for a decade,” Hendry said, adding that he and Van Allen have been “good friends” and denied reports that the two are domestic partners.

“I’ve represented her for 20 years,” Hendry said. “She’s one of the members of my union (IATSE — the Interernational Alliance of Theatrical Stage Employees.)”

Santa Fe City Council member Patty Bushee is calling for an audit of the restaurant.

“The improprieties that perhaps occurred I think are putting the city in jeopardy with regards to federal funding out at the airport,” Bushee told New Mexico Watchdog on Wednesday.

But Hendry blasted Bushee, accusing her of trying to score political points in the run-up to the city’s mayoral election in March.

“This is not about me, this is not about Lisa (Van Allen), this is not about Airport Grill,” Hendry said. “This is about embarrassing Coss.”

Bushee is running for mayor in a field that includes Bill Dimas and Javier Gonzales. Last week, Coss endorsed Gonzales.

“This is absolutely a political issue,” Hendry said. Bushee “sat on this issue until Coss endorsed Javier.”

Bushee denied any political motivation, saying she’s raised concerns about the airport’s restaurant deal since 2006.

“This situation concerned our new airport director (Jesson), and we simply had a conversation and I think she’s been trying to do her job and not allowed to do it,” Bushee said.

When asked if she was referring to Coss, Bushee said, “I’m not going to say until there’s been a hearing how this went on.”

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

Taxpayer dollars slated to prop up NM’s lottery scholarship program

Capital Report New Mexico Blog Postings - Tue, 2014-01-07 16:03

TAXPAYER DOLLARS FOR SCHOLARSHIPS: With revenue sagging for the New Mexico Lottery Scholarship program, both the governor and the legislature intend to use money from the general fund to keep the program going for now.

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE — When the New Mexico Legislative Lottery Scholarships were created in 1995, it was done with the understanding no tax dollars would be used to fund the program.

All of the money needed to pay for the tuition handed out to tens of thousands of students in New Mexico since its inception have come from proceeds collected from people buying tickets for such games as Scratchers and Powerball jackpots.

But lottery revenue is down and budget recommendations from both the Legislative Finance Committee and the office of Republican Gov. Susana Martinez are each calling for money from the taxpayer-supported general fund to keep the lottery scholarship program afloat until changes are made to make the program financially sustainable.

The LFC is calling for $11 million this spring and another $11 million in fiscal year 2015, contingent on the Legislature coming up with a long-term fix.

The governor’s office is calling for an appropriation of $16 million.

“We do not want children who are in college to feel the pain because this fund is not solvent,” Martinez said Monday at a news conference where she announced her budget recommendations. “We also think (the lottery scholarship) can work within the parameters laid out by the Legislature when they created this fund.”

When the upcoming 30-day legislative session starts in two weeks, lawmakers will try to hammer out an agreement that will get the lottery scholarship program back on solid financial footing.

A number of solutions have been proposed, ranging from reducing the amount of the awards given out to students to increasing the grade point averages for students (right now, a minimum GPA of 2.5 is required).

State Senate Majority Leader Michael Sanchez, D-Belen, has mentioned partially funding the program with tribal gaming revenue and earmarked tax hikes, but on Monday the governor said her $16 million recommendation is designed to happen just once.

The lottery scholarship program “was intended to live within the money it generates,” Martinez said. “There should not be general funds or a carve-out of general funds placed into the lottery.”

But what about the guarantee made in the mid-1990s that no taxpayer dollars would be used at all?

“These laws are not etched in stone,” said Rep. Luciano “Lucky” Varela, D-Santa Fe. “We can change them … We need to stabilize the lottery.”

“This problem has been known, it’s been looming, it’s been coming and should have been solved a year or two ago, but it was not solved,” Martinez said.

At a committee hearing last month, legislators from both parties admitted the idea of using tax dollars for lottery scholarships wouldn’t sit well with many voters, but coming up with a long-term solution could make the issue more palatable.

“We have commitments to our high school juniors and seniors,”said Rep. Jimmie Hall, R-Albuquerque. “To go into the general fund, I don’t want to do it unless we have a solution on board.”

“We keep kicking the can down the road,” said Sen. Mary Kay Papen, D-Las Cruces. “We have people who don’t want to make hard choices.”

The financial problems with the lottery scholarships have been largely blamed on two factors: stagnant numbers of tickets being bought and the rising costs of in-state tuition.

Under the current system, lottery scholarships pay for 100 percent of tuition for eight consecutive semesters, beginning with the second semester of enrollment. The scholarships can be used at 25 public colleges, junior colleges or universities in New Mexico and students who transfer to another eligible college can keep the scholarship, even if tuition increases.

In April 1995, then-Gov. Gary Johnson signed legislation creating the New Mexico Lottery and the college scholarships that have since gone out to more than 90,000 students.

From his perch as a former governor now living in Taos, Johnson said the lottery scholarship program doesn’t create enough incentive for colleges and universities across the state from curbing growing tuition costs.

“It’s given higher education in New Mexico immunity from competitive pricing,” Johnson told New Mexico Watchdog. “Tuition costs have risen because, hey, everyone’s on the lottery scholarship.”

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

Dueling budget recommendations for NM’s upcoming legislative session

Capital Report New Mexico Blog Postings - Mon, 2014-01-06 18:29

THE GOVERNOR’S BUDGET: Gov. Susana Martinez laid out her budget recommendations for the upcoming fiscal year on Monday. NM Watchdog photo.

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE – There are some differences in the respective budget proposals turned in by the administration of Gov. Susana Martinez and the Legislative Finance Committee, with each side taking a couple shots at the other, but no lines have been drawn in the sand — at least not yet.

Coming on the heels of the LFC budget recommendations made last week, Gov. Martinez and her staff came out with their own plan on Monday.

“These are problems we have to solve now,” Martinez said at a news conference at Acequia Madre Public School in Santa Fe. “Otherwise, we’re going to stay stagnant or we’re not going to continue with positive growth. I believe we can come to an agreement. We have good relationships with each other.”

“I’m willing to work with the administration,” LFC chairman and Rep. Luciano “Lucky” Varela, D-Santa Fe, said, adding, “If we don’t work together, if we don’t hang to together, we’ll hang separately.”

It’s often difficult to line up the LFC recommendations with those of the Governor’s Office but here’s how they each stack up on some specific issues:

Gov. Martinez budget LFC budget recommendation Total budget FY2015 $6.07 billion $6.15 billion Percentage increase 3.0% 4.3% Early literacy programs $15.5 million $12 million Pre-K and K-3 Plus $36 million $35 million Overhaul of pay structure for NM State Police $4.5 million $3 million Money to meet NM Lottery Scholarship obligations $16 million this spring $11 million this spring, $11 million in FY 2015 Increases for state employees $14.2 milion in targeted 1.5% cost of living increase for all increases (including State state employees, esitmated at Police overhaul) $50 million and $40 million for schools and state agencies to use at their discretion Reserves remaining 10% 9.4%

Varela criticized the Martinez budget for not doing enough to help the state’s lagging economy and said the LFC recommendations calling for 1.5 percent cost of living raises for all state employees would boost the state’s finances.

“Our plan would turn New Mexico around from the spiraling effect that we’ve had for the last decade,” Varela said after Monday’s news conference. “There seems to be a reluctance (from Martinez) in terms of across the board salary increases on the part of public employees, to reward them for performance.”

For her part, Martinez criticized the LFC budget calling for $40 million to schools and state agencies to be used at their own discretion and said the LFC recommendations for education reforms are “virtually non-existent.”

However, the largest segment of the budget in both proposals goes to education.

Some 44 percent of the governor’s budget and 56 percent of all new spending go to education.

The LFC budget calls for $2.7 billion in FY 2015 for public schools, a 5.6 percent increase.

Update: Rather than seeing pay increases for all state employees, the Martinez budget plan would boost pay for about one-third of public workers and new teachers would get higher pay.

“Small, across the board increases do nothing to reform our broken salary compensation system,” Martinez said. “They just shift the broken system upward a little bit.”

Click here to get more details on the LFC budget and here for more on the governor’s recommendations.

The 30-day legislative session starts Jan. 21 at the Roundhouse.

“We need to create good-paying jobs,” Varela said.

“As professionals, we know what we have said to those that elect us and what promises we’ve made,” Martinez said. “We just have to keep them.”

On another topic, Martinez said she had no plans to try to reverse the New Mexico Supreme Court decision allowing gay marriage. “It’s the law of the land and the court has spoken,” she said.

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

Get drunk, get hurt, get paid: NM lawmakers trying to fix workers’ comp loophole

Capital Report New Mexico Blog Postings - Mon, 2014-01-06 16:44

DRUNK ON THE JOB: In New Mexico, workers can test positive for drugs and alcohol but still qualify for workers’ comp if they injure themselves on the job.

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE — It sounds crazy, but thanks to a poorly worded law employees who hurt themselves or others while drunk or stoned on the job in New Mexico are often eligible to receive workers’ compensation benefits.

But with a 30-day legislative session around the corner, lawmakers will try to change that.

“I’m hopeful, let’s put it that way,” Rep. Dennis Roch, R-Texico, told New Mexico Watchdog on Monday. “It’s a personal responsibility issue.”

Roch plans to introduce a bill that will close a loophole in the state’s Workers’ Compensation Act, which an appellate court says is vaguely worded and, business leaders say, costs employers thousands of dollars in claims.

In some cases, New Mexico taxpayers get stuck with the tab.

For example, in 2006 a city sanitation employee in Las Cruces fell off a garbage truck and injured his head, wrists and a hip. Some three hours later the worker was found to have a blood-alcohol level of .12, well above the .08 legal limit in New Mexico.

But because of a lack of clarity in the Workers’ Compensation Act, an appeals court ruled the employee was entitled to 90 percent of his workman’s compensation claim, which cost taxpayers in Las Cruces about $90,000.

“The intent of the law called for a penalty to be built in if an employee showed up for work drunk and got into a car accident, but how the law is applied now, it’s very hard for that to go into effect,” said Darin Childers, director of the New Mexico Workers’ Compensation Advisory Council.

The court has called on the Legislature to clean it up, but Roch has been turned back in two prior attempts.Bu

In last year’s 60-day session, Roch’s bill was tabled by the House Labor and Human Resources Committee on a party-line vote, with all five Democrats voting to table the bill and all four Republicans voting against it.

“It was kind of overbearing and punitive in terms of the worker,” Rep. Miguel Garcia, D-Albuquerque, told New Mexico Watchdog at the time. “You’re also dealing with issues of family members who are heirs to entitlements.”

“But what about the family of the employee who is injured on the job by a fellow employee who’s impaired?” Roch said. “If someone makes that decision (to drink or take drugs), they ought not be rewarded.”

The Builders Trust of New Mexico, a coalition of home builders and contractors, calls for tightening the law, citing statistics that show workers’ compensation claims are 20 percent higher in New Mexico than the national average, and workers’ comp insurance premiums are going up 4 percent in New Mexico while premiums are falling in 19 other states.

“In construction, unfortunately, we have problems with employees using drugs and alcohol,” said Jack Milarch, CEO of the Builders Trust. “Companies can literally be put out of business because these claims are terribly expensive.”

As worded, the statute allows denying compensation only if the worker’s drug or alcohol condition was the sole factor in causing an accident, which critics say makes it almost impossible to deny a claim.

“The statute needs to be fixed,” said Childers.”Whether it’s more favorable to the employer or more favorable to the employee isn’t really our call, but something needs to happen.”

The Builders Trust is striking all references to prescription medication.

“The powers that be didn’t seem to be willing to take that on” in previous sessions, Milarch said, “so we decided to avoid that. We want to focus on illegal drugs and alcohol this time.”

In a 30-day legislative session, any bill not involving appropriations or revenue needs a message from the governor — put “on the call” — for it to be debated in committee. New Mexico Watchdog asked the office of Gov. Susana Martinez whether a workers’ compensation bill would be included on the agenda, but our messages haven’t been returned.

“I have not received word yet, but it was put on the call before and I have no reason to think she won’t this year,” Roch said.

Update 1/7: Martinez spokesman Enrique Knell e-mailed New Mexico Watchdog this comment:

“It’s certainly reasonable to think that people should be responsible for their own actions if they use illegal drugs or get drunk at work. We haven’t seen the specific legislation on this and decisions about what will be messaged as part of the session have not been set.”

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

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