Who Runs the Roundhouse? Not Who You Think. Budget Released, With Hundreds of Millions Left On the Table. What Recession? What Transition?

A second Capital & Main piece, and Joe Monahan offers insights into why our budget leaves $1 billion of surplus funds unspent despite desperate needs in rural & tribal NM. Read compelling evidence why we remain so fiscally conservative.

Legislative Alert: Roxanne sent out an alert at 8:40 pm last night after hearing schedules were updated by the legislature. There are four hearings today with some very important bills being heard, including legalization of cannabis, sustainable economy task force (this morning) in Senate Finance, and several more this afternoon. The increasingly problematic Senate Judiciary, despite being scheduled for a hearing at 1:30 today, has still failed to publish an agenda, though we are fairly certain they will again take up SB 66, the predatory lending rate bill.

The legislature is becoming more erratic in the timing of its Committee Schedule updates, causing Roxanne to have to guess whether to send out an alert in the late evening, after the committee hearing updates finally occur, or hold off until early the next morning. There are pluses and minuses on each side, but we will do our best to continue to send out the alerts on a timely basis, while reminding you of them through the blog. To review last night’s alert, click here.

Santa Fe Hearing on Transition to LED Streetlighting: A Good Thing, If

There is always an “if,” and even though intentions are good in this initiative, the devil is in the details. The specifications in lighting to be utilized indicate 3000K and 4000K color temperatures, depending on the application, the latter of which is very bright and blue-white. This is detrimental to people, to wildlife, and to the preservation of a dark night sky. Lower color temperature lights (3000K or less) are an option that provides the same benefits as the higher temperature lights and are being adopted by places like Flagstaff and Tucson, AZ, where light pollution is taken seriously. 

The city is to be commended for holding a public discussion of the matter before deciding. The benefit of that hearing will be that concerned residents can weigh in and make the correct decision. At issue is the range of lighting chosen. This is a big city investment, a wise one if done correctly. Please click here to get info from the Audubon Society on how to weigh in TODAY at 6pm or to call/write your city councilor and Mayor BEFORE a decision is made.

How Fiscal Conservatives Clip the Wings
of Eager New Legislators

The Context

Retake is constantly reminding our supporters that creating progressive, bold legislation can only occur in a context of sound but liberal fiscal policy. Just as water is necessary to grow crops, adequate funding is the necessary ingredient to growing a robust infrastructure, an adequate early childhood system, more efficient farm and food systems, and a sustainable renewable energy grid. A budget is a moral document, and who you tax and what you spend money on are moral decisions. But in the Roundhouse, fiscal conservatives still maintain an iron grip on our fiscal faucet, greatly constraining our options.

Retake Our Democracy and a loose coalition of progressive advocacy groups led by Working Families Party and including such groups as Indivisible, Nasty Women, Progressive Democrats, Adelante Progressive Caucus, Taos United, Progressive Voters, Wheeler Progressives, and others worked for months to use the primary election to remove five fiscally moderate Democratic Senators. This successful effort fell on the heels of a dramatic shift in the composition of the NM State House in 2016 and 2018. By all accounts, this effort significantly shifted the legislature to the left.

Progressives hoped that this would lead to a quantum shift in fiscal policy and a badly needed infusion of funding for state infrastructure needs and building a sustainable economy. But as described in Monday’s post, thus far what we have found is a deep commitment to planning, studying, and forming task forces, and precious lack of actual investment or spending to address gaping holes in our infrastructure, food systems, small businesses, and social safety net.

And yet, the House Appropriations and Finance Committee has approved a proposed new state budget by a 19-0 vote. This new state budget has been applauded by Democrats and Republicans alike. And as Joe Monahan points out, that is a problem. How is it possible that a legislature so strongly “Democratic” could be so timid in its budget development that it is approved without any dissent, 19-0? Where is the bold vision that a Democratic-controlled House Appropriations and Finance Committee passes over the howling concerns of the far more conservative Republicans?

Instead of what the voters voted for in 2016, 2018 and 2020, they get the same fiscally conservative budget constraints we’ve been getting since Sen. John Arthur Smith first took the gavel in Senate Finance over two decades ago?

First, you need to understand that the committee is working with the largest state surplus in NM state history, a surplus of $2.7 billion, or 35% of the entire state budget. That is unfathomable when placed in the historic context of NM annually working hard to maintain a 10% surplus or $720 million. Plus, we are anticipating over $1 billion in federal relief funding within months. And this surplus is in state operating reserves. In addition to these operating reserves, we have billions parked in a variety of state funds like the tax severance fund and tens of billions parked in our Land Grant Permanent Fund. In short, we are resource rich, not poor.

If it chose to, the state could maintain a typical surplus of 10% and still have $2 billion to spend and many more billions from various reserve funds it could invest in all the critical things NM currently lacks: adequate K-12 funding, a robust early childhood system, a renewable energy generation capacity, a functioning rural infrastructure and a food system that actually produces food for our communities, instead of for export. It isn’t as if COVID hasn’t just laid bare how vulnerable New Mexicans are to the lack of these basic services and supports.

So what does our House Appropriations budget include? Funding to provide teachers a 1.5% raise and to keep agency budgets operating at current funding levels. Where is the appropriation to fully fund our Environment Department so it can actually regulate gas and oil operations? Nowhere to be found.

In terms of large investments in infrastructure, food and water systems, and Broadband, we find $300 million in one-time spending for road repair (gotta keep those gas and oil trucks moving) and a paltry $30 million to invest in Broadband. Over 90% of our state’s dams are teetering on the verge of collapse. I am sure there is a bill somewhere to study this further, but where is the funding to fix the dams? Where is the $200M investment in rural infrastructure? Where is the $300M to stimulate new food manufacturing capacity and another $300M investment in solar and wind power? That would be bold.

As a most relevant aside, when Roxanne and I did a 10,000 mile road trip to visit advocacy organizations across the country 3 years ago, we returned through Oklahoma and Texas. All along the Oklahoma and then Texas highways were an unending series of vast solar and wind installations. But once we got to the NM state border, that ended.

Multiple studies have shown that investing in the development of renewable energy generation systems would create far more jobs than are produced by the gas and oil industry, and for years we have bemoaned our reliance on that industry for jobs and revenue. Isn’t this the time to invest in diversifying our energy options, generating tens of thousands of new, well-paying jobs and securing our energy autonomy? That would be bold.

Our small business community is reeling from COVID restrictions, but SB 3, the much touted Small Business Recovery Act, offers loans combined with almost laughably inadequate grants. In addition to repayable loans, small businesses with under $500,000 in 2019 revenue are also eligible for grants. How large? If you take out $100,000 loan you would be eligible for a grant of $500. This is not bold.

In a recent post we described how Democrats might better address the needs of rural America. This post outlined five specific initiatives we might undertake to resurrect rural America and small farmers. In a second post, we outlined how at a national level for decades Democrats have remained fiscally conservative refusing to address rural and rust-belt needs. We pointed to how tepid social policy and conservative neo-liberal fiscal policy has dominated the Democratic Party for decades, fueling the anger of low and moderate income rust- and farm-belt voters, resulting in the Red Rage of 2014 and 2016. Addressing those needs isn’t just a matter of social justice, it’s a matter of political expediency and political survival.

Democrats must learn from the lessons of history. As we reported on Monday, virtually none of the bills supported by Retake have any appropriations whatsoever, just commitments to study, plan, and convene task forces. We have mustered the electoral will to change the composition of the legislature and yet….. Why are we left outside looking in at yet another fiscally constrained range of policy limitations? What are we missing?

How Do Fiscal Conservatives Maintain Control?

Thanks to two compelling reports, one from Joe Monahan’s daily blog and the second from Capital and Main, you can begin to understand how voters’ clear intentions and a new wave of younger progressive legislators are constrained in their idealism and brought into the culture and ideology of those who still control state fiscal policy. What we find from these reports is that as a result of a carefully constructed “orientation” process, coaching from legislative leadership, the highly jaded choice of “expert” testimony at interim and legislative hearings, and fiscally conservative Financial Impact Reports that reinforce each of the other messages, there is a tidal wave of cautions and fiscally conservative messaging to which new legislators are exposed before their first vote. Read on.

Before a new legislator is sworn in they are oriented to how things work, first by Legislative Finance Committee leader David Abbey and his staff and then by the leadership of their chamber’s caucus. Monahan quotes from an anonymous Roundhouse veteran:

David [Abbey] and his staff are among the first to meet and “train” every incoming legislator. Why do progressive ideals die as soon as newbies walk through those heavy, brass doors at the Roundhouse? It’s not because the legislators magically lose the will–it’s because they get the scare treatment and quickly learn to fall in line if they want to accomplish anything. This isn’t to say David is a bad guy, he’s not at all, he’s just fiscally conservative. He has done tremendous work for the state, if you believe that pinching every penny is the right thing to do.

From Joe Monahan’s New Mexico. “Blogspot 2.22.2021″

The caution instilled in legislators’ orientation outlines how the state is entirely reliant on gas and oil revenues that feed our K-12 system and all else. Legislators are told that because that industry is prone to boom and bust cycles, the state must operate in a fiscally conservative fashion, squeeze every penny, and continue to build our reserves. Alternate views that might encourage investing those reserves are off the table as being irresponsible. Monahan’s “Blogspot” offers an extended description of how the legislator orientation process trims the sails of eager new legislators. It is a worthwhile read.

Legislators receive a similar message when they enter their first Democratic caucus meeting in the House or Senate. And with these briefings in mind, they are instructed to begin to adopt a more cautious realistic view of what is possible. Campaign slogans about investing in renewables, increasing funding for K-12 and early childhood, and building a robust rural infrastructure start to be tempered. Perhaps it is not explicitly stated, but new legislators understand that industry lobbyists donate to the campaigns of legislative candidates from both parties and to the Senate and House campaign funds that supplement individual campaign coffers. All of this messaging comes well before the first day of legislative hearings.

As Capital & Main describes in their excellent second post this week focusing on NM, it also matters a good deal who is invited to testify in Interim and Legislative Session Hearings. If those discussions are guided by gas and oil and other industry “experts,” then the table has been set for a most modest meal.

When legislators begin to attend Interim Hearings and later the legislative hearings where they consider bills, they find experts are assembled to further outline the state’s needs and, as importantly, ensure that legislators understand its fiscal constraints. New Mexico gas and oil lobbyists, led by New Mexico Oil and Gas Association are everywhere. NMOGA is led by Ryan Flynn, who under Gov. Martinez was the secretary of the NM Environment Department. But as pointed out by Capital and Main, NMOGA’s roots in NM state government goes much deeper than that.

“Flynn is the most recognizable and influential voice. But he’s not the only one: There’s also Robert McEntyre, former spokesperson for the New Mexico Public Education Department (PED) and now director of communications for NMOGA. Aimee Barabe, who worked at the New Mexico Tourism Department, Department of Health and PED, is now NMOGA’s director of government relations; she’s also the group’s only registered lobbyist. And then there’s Jim Winchester, the executive director of the Independent Petroleum Association of New Mexico, who served as communications director for NMED under Flynn.”

From Capital and Main: COVID Obscures New Mexico Legislature — But Oil and Gas Still Get In”

These NMOGA lobbyists don’t just testify in hearings, they have conversations with their former colleagues who remain as employees in state government; they go to dinner and entertain legislators — legislators with whom they are all too cozy. And, as noted above, they donate to campaigns.

We noted above that NMOGA and other industry lobbyists are everywhere. Well, when it comes time to place legislative options in a fiscally constrained context, committee chairs have complete autonomy in selecting the experts. From Capital and Main:

“When state Sen. George Muñoz, the new head of the New Mexico Senate Finance Committee, wants to hold a meeting, he gets to pick who’s invited. That’s how state senate meeting rules are structured. So if he chooses to invite oil and gas industry representatives to dominate a discussion of the financial ramifications of President Joe Biden’s moratorium on federal oil and gas leases, that’s Muñoz’s prerogative. And that’s exactly what he did on Feb. 2.”

Now consider our over-extended, unstaffed legislators who arrive at hearings to find out what is possible to accomplish. And they hear from NMOGA, David Abbey, and Geroge Muñoz. Meanwhile their constituents, after working tirelessly on legislative campaigns to transform the legislature, are reading from The Nation, YES!, Democracy Collaborative, Truthout, Common Dreams, Next City, Capital and Main and other sources that tap into alternative information, experts from Montana and Pennsylvania, proponents of plans for massive infrastructure investments, for addressing rural injustice, for improving food systems. While legislators will hear from their constituents, reminding them of their campaign promises, those legislators have been indoctrinated with fear and caution and their aspirations have been undermined by the cold showers delivered by the powers that be.

What if instead of hearing from NMOGA and their allies exclusively, legislators heard a presentation on the long-term economic impact of the gas and oil industry, the industry’s track record in other states like Montana and Pennsylvania that are being abandoned by the industry which pays out huge executive bonuses just before declaring bankruptcy, leaving states to pay the tab for plugging wells and remediating the wasted environment. Unfortunately, you rarely hear that testimony; instead you hear from NMOGA and allies.

With NMOGA calling the shots, even asking these other states to share their experience would be to “send a bad message” to the gas and oil industry. Legislators have been reminded ad nauseum at Interim Hearings and Legislative Council orientations that gas and oil provides 35% of our revenues and that to do anything to which they object will destroy our state budget. Their wings have been clipped. The aspirations that drove a run for office have been doused by the cold water of David Abbey, George Muñoz, and NMOGA.

After so much “orientation” and briefings from their caucus, legislators enter their first committee hearing only to face one fiscally conservative Fiscal Impact Report (FIR) after another, each prepared by David Abbey’s team of legislative analysts, each of whom has been recruited for and trained in the tenets of fiscal conservativism.

In this session, we have seen FIRs on the public bank misrepresent its cost to the state by inaccurately asserting HB 236 was seeking $50M in general funds. After listening to endless testimony on how we must be cautious and that this is not the time for bold action, this FIR triggers bells and whistles and offers fodder for GOP and conservative Dems to chip away at the wisdom and timing of the bill.

The bill to place a moratorium on fracking was misrepresented by an even more one-sided FIR, which pointed out how even pausing fracking could jeopardize billions in state gas and oil revenues. The sky will fall! Oil operators will flee to Texas! But the analysis has not a whit of reference to the fact that the gas and oil industry has already bought up 95% of the drillable landed in NM with the remaining land being the least profitable. The FIR also fails to even consider the long-term costs faced by NM from the looming exit of the gas and oil industry and their leaving the state a multi-billion dollar obligation to plug and remediate those sites.

Constituents who worked so hard to change the political calculus of the legislature over the past four years and who have been developing grassroots organizations to lobby at the Roundhouse are drunk on expectations of all that can now be done. But their newfound legislators have had their bandwidth narrowed at the same time that our collective vision has become increasingly bold. After this session is over, it’s time for us to regroup and think about how to address these systemic problems.

In solidarity and hope,

Paul & Roxanne

Categories: State Budget

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7 replies

  1. Thanks for educating me as to how the budget process has been circumvented by conservatives and lobbyists. Sad, that there are few democrats with “balls”.

  2. Very thoughtfully presented. And discouraging

  3. Excellent post. Every time I hear “but we are a poor state” I want to scream. $32 billion is not poor. WE have good resources, carefully built over decades. But we are squandering TIME, and OPPORTUNITY. New Mexico is committing future citizens and its students to poverty, not excellence.
    As long as NMOGA is at the table, New Mexico will continue to be a corporate colony, kept from its potential.
    Making OGA pay its way is the necessary beginning, with appropriate level fees and royalties and severance tax, ensuring our permanent loss of underground resource completely pays for the cost of the Land Department and its agencies. Then we can move forward to develop other industries and businesses.

  4. Thank you Roxanne and Paul! Your service and everyone else who helped do the work of your organization is such a blessing to New Mexico. Thanks for letting us know how much needed to be done right now.

    I do know that what we do not use that is given to us will be taken away – even if we choose not to use it.. Deeply saddened that yet again – we give into chicken little – “The Sky is Falling” political speak.

    What are people so afraid of? Money won’t matter when you are dead or uneducated or unfed. You say it’s a rainy day – I say it is a sunami happening – worldwide and in New Mexico. The sky will fall if we don’t change to support programs and use the resources we have that are needed to lift up and give life to all New Mexicans. Unbelievable and so very unacceptable. What will it take?

  5. I found this opinion piece particularly powerful. I just sent it out to many, many NM friends. Thanks!


  1. URGENT CALL TO ACTION, Plus a Legislative Update. Please Share This Post! – Retake Our Democracy

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