House and Senate Leaders "In a Good Mood"

House and Senate leaders have been negotiating over the state budget today. Along with some TV reporters, I caught some of them leaving their closed-door meeting for a late lunch.

They all seemed in jolly spirits. Sen. John Arthur Smith, chairman of the Senate Finance Committee joked, "All the blood's in the other room."

But apparently no deal has been reached.

Said Smith, "We're getting along great. We agreed to a duel later on. But right now, everybody's getting along fine."

Rep. Lucky Varela, who chairs the Legislative Finance Committee, said, "We're all in a good mood. We're going to make it. Give us time, OK. Give us time."

Asked whether he expected a special session on Monday, he said, "If the governor calls us. He hasn't called us yet."

House Speaker Ben Lujan said no deal has been reached yet. But they'd meet again after lunch.

Richardson Names Revenue Task Force

As promised, Gov. Bill Richardson named his task force to study possible tax increases before the next legislative session.

And, like most task forces appointed by the administration, it's a monster. More than 40 members. Maybe they can meet in the Senate Chambers.

The group includes representatives of banking, environmentalism, business, labor, ranching, the alcohol and tobacco lobbys, the Catholic Church, government, educators, liberal advocacy groups ...

Let's hope they have better luck than the 2003 Blue Ribbon tax task force.

Here's the list of members.
Chair
* Rick Homans, Secretary, Taxation and Revenue Department

Task Force Members
* Lieutenant Governor Diane Denish or Designee
* Mark Thompson, Lieutenant Governor, Acoma Pueblo
* Jim Berry, Executive Director, Las Cruces Chamber of Commerce
* Terri L. Cole, President and Chief Executive Officer, Greater Albuquerque Chamber of Commerce
* Raymond Mondragon, Chair, New Mexico Economic Development Partnership
* Alex Romero, President and Chief Executive Officer, Albuquerque Hispano Chamber of Commerce
* Chuck Wellborn, Wellborn Strategies, LLC
* Sharon Lombardi, Executive Director, Dairy Producers of New Mexico
* David S. Smoak, President, RSF Land and Cattle Co.
* Don Chalmers, Principal Dealer, Don Chalmers Auto
* Jerry Walker, President and Chief Executive Officer, Independent Community Bankers Association of New Mexico
* Jim Horton, Director, Public Policy and Government, Associated General Contractors
* Odes Armijo-Caster, President, Renewable Energy Industries Association
* Leland Gould, Chair, New Mexico Oil and Gas Association
* Jim Hinton, President, Presbyterian Health Services
* Michelle Welby, Director, Medical Operations, Molina Healthcare of New Mexico
* Jami Grindatto, Corporate Affairs Director, Intel
* Tony Trujillo, Government Relations Director, Phelps Dodge
* Kathi Bearden, Editor, Hobbs Sun News
* Steve Anaya, Executive Vice President, Realtors Association of New Mexico
* Carol Wight, Chief Executive Officer, New Mexico Restaurant Association
* Bob Barberousse, Cigar Association of America
* Fred O'Cheskey, New Mexico Beverage Wholesalers and Southern Wine & Spirits
* Thom Turbett, President and Chief Executive Officer, Independent Insurance Agents of New Mexico
* Bob Murphy, Executive Director, Economic Forum of Albuquerque
* Rick Clemente, Production Central ABQ
* Leanne Leith, Political and Programs Director, Conservation Voters New Mexico
* Ruth Hoffman, Director, Lutheran Advocacy Ministry-New Mexico
* Allen Sanchez, Director, New Mexico Conference of Catholic Bishops President, St. Joseph Community Health
* Gayla Brumfield, Mayor, City of Clovis
* Bill Fulginiti, Executive Director, New Mexico Municipal League
* Paul Gutierrez, Executive Director, New Mexico Association of Counties
* Charles Bowyer, Executive Director, National Education Association-New Mexico
* Carolyn Abeita, Esq., Member, University of New Mexico Board of Regents
* Carter Bundy, Legislative Director, AFSME
* Pat D'Arco, Chairman, Rio Rancho Planning & Zoning Board
* Jackson Gibson, Member, District 6, Transportation Commission
* Bill Jordan, Policy Director, New Mexico Voices for Children
* Leo Garza, Legislative Committee Chair, AARP New Mexico
* Richard Anklam, President and Executive Director, New Mexico Tax Research Institute
* Fred Nathan, Executive Director, Think New Mexico

Gov Signs Budget Bill with Several Line-Item Vetos

Some 19,000 classified state employees will have to take five unpaid "furlough" days, as a result of action Gov. Bill Richardson took today.

In addition, Richardson said he's cutting at least 84 exempt positions -- though it's not clear how many of those already are vacant.

“A lot of individuals will lose their jobs," Richardson said when asked about the exempt positions at a news conference. "But again we have not notified anyone. We are working on that. I want to do this in a humane way. And I will say this: a lot of these exempt workers do valuable work. They run state government. And I feel tehy’ve been unfairly targeted. But because of the budget situation we are going to take action on those who perhaps are not in critical areas and we’re going to trim it down. 84 will not be the end of it.”

Richardson signed HB 17, but as expected there were significant sections that he vetoed.

He vetoed the section mandating 7.6 percent cuts in agencies under his control as well as the section calling for 102 exempt positions to be axed. By executive order he's reducing state agency budgets by $79 million, which is about 3.3 percent.

The furloughs apply to both classified and exempt employees -- at least the ones who don't lsoe their jobs. Richardson said he'll voluntarily return five days of his salary to the state, "But I won't take the days off."

Here's a copy of his executive message on HB 17.

HB 17

Taxes Increases Inevitable, Richardson Says

I just got back from a press conference with Gov. Bill Richardson. Although he's campaigned both for president and for re-election as governor as a tax-cutting Democrat, Richardson told reporters today that tax increases are "inevitable" during the next legislative session because of the budget crisis.

"It's very painful," he said. Richardson declined to say which taxes he wants to boost. He said he'll soon be appointing a committee to study the best ways to raise revenue.

On another topic, I asked Richardson if he planned to follow Lt. Gov. Diane Denish's example and give his political contributions from indicted CDR found David Rubin to charity.

His answer proves he's still got a sense of humor. "I'll have to review that," he said. "Did I get donations from them?"

For the record, the $110,000 CDR gave to Richardson's political committees led to a federal investigation and cost him a job in the Obama cabinet. The investigation ended with the Justice Department deciding not to indict anyone.

Roundhouse Roundup: The Party Museum

A version of this was published in The Santa Fe New Mexican
October 29, 2009

The state Film Museum at the Santa Fe Railyard finally is being put to some good use.

The state Economic Development Department is having a party for employees there this afternoon. The museum, housed in the old Jean Cocteau Theater on Montezuma Avenue, seems pretty excited about that. It's up on the marquee: "Welcome EDD Halloween Party."

This raised a few eyebrows. At a time when the state is talking about laying off workers or forcing unpaid furloughs, cutting back services for behavioral health patients and even closing prisons, one department is partying?

It's really not that big of a deal, said a deputy director of Economic Development. "It's not really a Halloween party, it's a birthday potluck," said Toni Balzano, explaining the department does this every month for employees who were born that month.

Sometimes the potluck is held at the main EDD offices and sometimes at the Film Museum, where the state Film Office is located, Balzano said. In one of those weird twists of state bureaucracy, the Film Office is part of EDD, while the Film Museum is part of the Cultural Affairs Department.

The party is scheduled from 3 until 5 p.m. Most employees show up for about 45 minutes, Balzano said. They are expected to count that time as their lunch break, she said. A locally made movie will be shown in the background, Balzano said.

Usually when there's a party at a museum, guests have to be reminded to be careful around the exhibits. But that won't be necessary at this shindig — because there aren't any exhibits. You won't find Billy Jack's hat, or robot parts from Transformers, or even a wax figure of my friend actor/musician/lawyer George Adelo getting killed in a motel bathroom in that scene from No Country for Old Men.

As my newspaper colleague Robert Nott has noted in his Pasatiempo column, the museum has no budget for exhibits. Its biggest expense is the $88,000 a year salary for Director Sharon Maloof.

Longtime Santa Fe residents remember that before it was the Jean Cocteau, the theater where the museum is located was called The Collective Fantasy. As a name, that might be more appropriate now than "the New Mexico Film Museum."

Return to sender: Just a day after Gov. Bill Richardson spent most of his afternoon hearing from agencies and organizations likely to be affected by budget cuts, some state employees who sent budget-saving suggestions to the Governor's Office (at an e-mail address listed in a news release) got an automatic response saying their e-mails were "deleted without being read."

Does this represent a cruel and insensitive attitude toward state workers? Or is it the dawn of a new era of honesty in state government?

Neither, says a spokeswoman for Richardson. It was just a computer glitch — a "junk mail filter and read receipt setting error" to be exact.

Shortly after being alerted to the problem, spokeswoman Caitlin Kelleher said the problem was corrected.

"The governor wants to hear from New Mexicans. We will be holding additional office hours next week," she said in an e-mail. The e-mail for budget suggestions: Special.session@state.nm.us.

Open Hours with The Guv

Gov. Bill Richardson will hold office hours on, Tuesday in hopes of hearing from New Mexico residents about the budget bills that were passed last week by the Legislature.

Richardson will grant five minute meetings to New Mexicans who would like to discuss budget cuts.

Meetings will be held on a first-come, first-served basis from 2:00pm to 5:00pm in the Governor’s Office on the fourth floor of the Capitol.

Those seeking time with Richardson must present a valid New Mexico driver’s license. If an organization wants time. Richardson will meet with a representative or a group of representatives at one time.

Those who can’t make the scheduled office hours on Tuesday may also contact the governor with their thoughts about the budget bills by email: Special.session@state.nm.us or by phone: 505-476-2210.

SENATE PASSES BUDGET BILL

After about six hours of debate and after adding six amendments, the state Senate passed HB17, the budget bill by a vote of 31-9.

The bill now goes to the House, which will consider the amendments. What I'm hearing is that the House might reject some of the amendments. If that happens, and the Senate doesn't agree to drop those amendments, there will be a conference committee on the budget bill.

House Passes Budget Bill

In a debate that lasted past 11:30 p.m. the state House of Representatives on Thursday voted 37 to 31, to pass a budget bill would slice $257 million from state agencies and public schools and colleges, all in an effort to eliminate the $650 million-and-growing deficit in this year’s budget.

I don't have the roll call yet for House Bill 17 but the bill passed with most Democrats voting in favor and most Republicans voting against. The bill goes on the Senate, which though controlled by Democrats is more conservative than the House.

The cuts in the bill range from 2 percent to 7.6 percent. However, the measure would soften the blow to public schools by using other revenue, including federal stimulus funds, to replace state money.

Rep. Brian Egolf, D-Santa Fe, said the budget bill contains a provision that would allow school districts to get reimbursed for their property insurance premiums from a school building fund. Egolf said the premium for Santa Fe Public Schools is about $2.4 million. This, he said, would more than offset the $2 million budget cut in the bill. This provision is similar to SB24, which passed the Senate on Thursday.

Egolf said the provision is designed to keep the schools afloat during the current school year. He said it will be necessary for the Legislature to come up with new revenue sources — such as tax increases — in the regular session that begins in January.

The budget bill contained a slap to Gov. Bill Richardson. It would require the governor to cut salaries and benefits of 80 so-called exempt employees. The bill calls for reductions of 7.6 percent for agencies under Richardson’s control.

Hopefully this circus will close its tent tomorrow (Friday.)

I bid you goodnight.

48 Money-Saving Ideas from House Republicans

House Republicans earlier this afternoon held a news conference to announce 48 ways the executive branch could save money -- without relying on legislation.

Some are pretty sweeping ("Ask all agencies to cut operations by 20% but improve productivity by 10%") while some speak to waste I never realized was a problem ("No more mailing of single 8.5 x 11 sheets in a 10 x 13 envelope. Fold! Fold! Fold!")

Several are clearly tweaking Gov. Bill Richardson. (reduce exempt employees , sell the state debt, and "Suspend executive agency trade missions, out of state conferences, or trips to chat with CEOs. Use phone conferencing and webinar as a replacement," etc.)

And there's one that truly surprised me: Early release for non-violent prisoners within three months of their release. That idea was floated during Richardson's first year in office to ease prison crowding, but nobody in power seemed to like it and Richardson eventually decided against it.

I tried to unscramble a few examples of alphabet soup here. But I've got to plead ignorance to some acronyms used here. (Guess I didn't do very well on my NMSBA and NMHSCE tests.)

Here's the list of ideas

1. Pull back appropriations for all unfilled (full-time employee positions.)

2. Suspend compliance requirements in all agencies unable to respond fully to filling within 14 days.

3. For students who are a discipline problem in school, or who choose to leave school, provide mandatory supervised community service work in city, county and state maintenance programs (especially parks) where facilities will be neglected as a result of cuts. Provide exemption for academic credit and access to GED materials.

4. Repeal the pit rule. Implement a moratorium on all new rules by all agencies.

5. Order (Public Education Department to limit testing requirements to federal standards. Examples of current tests include: NMSBA (5), NMELPA (5) Short Cycle (3), DIBELS (3), and NMHSCE (2); estimated days in parentheses.

6. Require all paper reports by state agencies to be sent by e-mail, unless specifically requested in paper by legislators.

7. Stop the contract on Rose Bowl Parade Float.

8. Eliminate Intensive Support Coaches for (Developmental Disabilitywaiver programs and fund DD waivers so that services reach the individuals in need.

9. Authorize school districts to create and maintain sufficient cash balances to meet emergencies without having to apply for supplemental funding.

10. Audit all attorney invoices of plaintiffs suing the state.

11. Require carpooling by all state employees traveling to the same destination.

12. Cease all Game and Fish Department expenditures in support of the wolf reintroduction program.

13. Release 2008 Special Session funding for (Developmental Disabilty) Waivers.

14. Within 30 days, layoff all employees (usually exempt) who are not fully contributing to the agency mission.

15. Ask the Obama Administration to improve processing of federal education reimbursements. The reimbursement process is very slow resulting in school districts carrying excessive money in accounts waiting for reimbursements.

16. Of the 423 exempt employees: lay off half or cut the salaries by half.

17. If the Secretary of Human Services receives an appointment in the Obama administration, name a deputy secretary as interim secretary with no pay increase.

18. Ask employees to volunteer for up to 30 days unpaid leave.

19. Ask all agencies to cut operations by 20% but improve productivity by 10%. Provide incentive bonus pools for employees of agencies meeting this goal.

20. Suspend all contracts that only augment agency expertise.

21. Implement a true hiring freeze.

22. In grades 5 through 12, review class size standards. Ask schools to determine which classes could function well or better with more students.

23. Reduce school bus transportation costs by cutting back on very long routes and making city bus routes start farther from schools.

24. Review energy use policies. Unplug or turnoff anything not required over night such as chargers, printers, etc.

25. Cut back on high cost printing projects such as the NMFA annual report, the $40,000 New Mexico Wildlife newsletter.

26. Suspend executive agency trade missions, out of state conferences, or trips to chat with CEOs. Use phone conferencing and webinar as a replacement.

27. Review and reduce Public Safety Weed and Seed programs, that increase load on legal and corrections system for which there is not funding.

28. Review all unfunded federal mandates and cease compliance.

29. Review professional mediation services to reduce costs.

30. Ask psychologist and mental health professionals which programs produce consistent, positive results, then phase out and eliminate less successful programs.

31. Provide early release to non-violent prisoners within three months of release.

32. Ask employees to identify programs, processes and tasks that they perform that contribute little or nothing to the mission of the agency. Cut those activities..

33. Review, combine and reduce travel in state vehicles. Schedule trips to take place during non-peak driving hours.

34. Require all agencies to follow uniform procedures act and subject all proposed new to an economic impact review.

35. Ease work rules for teachers to concentrate on teaching.

36. Check out other cost savings ideas implement by other States that can work in New Mexico

37. Terminate employment of all employees on administrative leave longer than 90 days.

38. Use the correct sized envelope for correspondence. No more mailing of single 8.5 x 11 sheets in a 10 x 13 envelope. Fold! Fold! Fold! Better yet, use e-mail!

39. Turn off air conditioning or heat in buildings during mild fall days. Open windows, or use fan only settings.

40. Turn off lights when not in use.

41. Eliminate instructional teaching coaches and mentors.

42. Delay High School Redesign strategies such as a) Increased Math Requirements; b) Upcoming requirements of ACT or WorkKeys/Career testing (about 40 to 50 dollars per Junior – unbudgeted)

43. Delay or suspend selected education reporting requirements including suspending contracts for reporting software (at state level) such as: OBMS, STARS, Web-EPSS, and Certiclear (Federal Stimulus Reporting). This step would reduce or eliminate the staff hours (and FTEs) districts need to comply with reporting.

44. Ask CPA professional groups and accounting and MBA students to volunteer to perform audits on school districts unable to comply with audit requirements.

45. Sell the state jet.

46. Suspend all contracts and new expenditures on the spaceport.

47. Suspend all non-essential advertising by state agencies.

48. Reduce executive staff at Governor’s mansion.

Richardson Wants to Study Revenue Proposals

The special session isnt over yet, but Gov. Bill Richardson is looking ahead to the regular session in January. He's calling for a "working group" of legislators, staffers and others to study possible revenue bills for next year's 30-day session.

Will this be different from the "Blue Ribbon Tax Committee" that crashed and burned in the fall of 2003? Hopefully. The economic situation is a lot more dire.

He mentions some "intriguing proposals" from the special session, but doesn't say which ones.

Here's his statement the governor's office e-mailed a few minutes ago:

“Given the fiscal realities facing the state I am prepared to consider a comprehensive, well-reasoned revenue package for the regular legislative session in January 2010. Between now and then I will convene a working group consisting of legislators, executive staff, members of the business and education communities, and other interested parties to analyze such a package.

“Already in this session there have been some intriguing proposals introduced. However, I believe these must not be injected piecemeal without serious analysis into the present budget calculation but rather should be part of a well-crafted and mapped out package in January. Accordingly, I agree with action taken by committees in both the House and Senate that supports this view.

“In the meantime I urge the legislature to quickly address the immediate budget needs at hand in a way that preserves jobs, does not harm the economy, and protects students and teachers.”

Speaker: Budget Decisions Not Yet Made

I just got this e-mail from House Speaker Ben Lujan referring to two senators who " independently and prematurely" talked about budget cuts.

I'm assuming that one of these is Senate President Pro-tem Tim Jennings, who yesterday distributed an "Open Letter to the Citizens of New Mexico" warning of the need for big spending cuts.

I'm not sure who the other senator is, but I put in a call to try to find out. I'll update when I do.

Here's the Speaker's e-mail:

I am deeply disappointed that two high ranking members of the Senate independently and prematurely communicated information pertaining to budget cuts that does not represent the position or the views of the legislature as a collective body. The letter has caused widespread panic. This is not the kind of leadership our citizens deserve nor should they expect from us on such complex and sensitive issues that affect all of us.

The budget issues we face are monumental and will require our collective sacrifice to resolve this unprecedented set of circumstances. As a legislative body, we have not yet reached a consensus as to how we will overcome the revenue shortfalls. These matters require very principled, prudent and diligent considerations because it will further impact so many already hurting from the economic conditions not seen since the depression. These times require thoughtful and compassionate leadership.

The work group representing the House, the Senate and the Executive are making strong efforts to develop recommendations for our collective consideration. They are still negotiating strategies to address these matters. Once the parameters are defined, these considerations will be thoroughly discussed in our respective caucuses before moving forward to a special session. As a result, neither the Senate as an entire body, nor the House, has fully deliberated on a specific course of action. We are not yet at that juncture.

Therefore, the information communicated by the two senators creating the perception that this is the collective position of the legislature is unfair and disrespectful to all members of the legislature. It is unfortunate that they chose to communicate such information that has triggered such a widespread panic. Before we get to that point, it is my intent to make this a deliberative process with expectations that stakeholders will be a significant part of the discourse in this process and that we will all work together to respond to these challenges.

Open Letter From Tim Jennings

I just received this "Open Letter to the Citizens of New Mexico" from Senate President Pro-tem Tim Jennings. It's about the budget crisis.

Note, he's talking huge budget cuts but doesn't mention the idea of repealing the tax cuts, which I wrote about in today's Roundhouse Roundup column. That might be one of the few things that Jennings and Gov. Bill Richardson agree on.

Here it is in its entirety.

OPEN LETTER TO THE CITIZENS OF NEW MEXICO

Dear Fellow New Mexicans:

As New Mexico’s economy continues to worsen, every New Mexican needs to prepare for the tough economic times ahead. It is unfortunate, but New Mexico’s fiscal situation is getting worse and I think we need to be prepared. Everyone needs to understand and take note that we all must make wise economic choices individually, as a family, and in government, for which the legislature is primarily responsible.

There is no easy way out of the state’s fiscal crisis in the short run. We must open our eyes and move forward to deal with this situation in an expeditious manner. Putting our heads in the sand will not work. Making piecemeal decisions in government spending will ultimately visit us again and again, causing more pain in the future. We are short huge amounts of recurring dollars and so we must make huge recurring expenditure cuts. We need to return to the core budget and deal with the problem there, not cover a recurring problem with non-recurring dollars. Glossing over the facts or wishing it away will not work.

Recent revelation that the executive still does not have a clear understanding of what New Mexico’s prior fiscal year tax collections are, leads me to believe that the legislature is not receiving accurate information from the executive. There appears to be a need for greater shared responsibility for developing revenue projections and the proper disclosure of these estimates in a timely manner. One possible solution would be to expand the legislature’s oversight powers of the executive branch by establishing an independent accounting office to insure that the best information is available as we make the hard decisions with which we are faced.

Recently, the Department of Finance and Administration revealed that New Mexico’s fiscal crisis has worsened since the last revenue projections were released just two months ago. New Mexico’s short fall in the prior fiscal year (FY09) has probably increased by an additional $107 million to a staggering $400 to $450 million. It appears now that the FY ‘10 budget is at least $550 million short of recurring revenue and possibly could grow to $700 million or more below the current year budget. In addition, the executive will need legislative authority to draw down reserves by an additional $107 million just to close the prior year fiscal year (FY’09). This is in addition to their August estimate of $117 million for a total of $224 million. We cannot ignore this crisis, and must deal with it in a caring but prudent manor. This drastic decline in revenue means that we all must be prepared for substantial budget cuts to all of state government, including public schools and higher education.

These are tough economic times and we must pull together to solve this problem with the least amount of harm to all New Mexicans.

Senator Timothy Z. Jennings
Office of the President Pro Tem
Room 105, State Capitol Building

GOV TALKS ABOUT HIS BUDGET PROPOSAL

Gov. Bill Richardson at a press conference just declared the theme of the Legislature to be "The Year of Fiscal Restraint."

One of his proposals is to -- temporarily -- increase class sizes in public schools. It's not clear just how much. DFA Secretary Katherine Miller said the proposal is to eliminate the cap of 165 students per teacher in high school and middle school. Sounds like it could get crowded.

He also said under his plan the state would deauthorize funds for "stalled" capital outlay projects, for a savings of $263 million. We're not sure which projects they're talking about, but Miller said the list wasn't ready yet.

But the BIG news is that the beard is back! Currently it's only stubble, but that's how these things start. I asked him at the end of the conference, and he replied with a resounding "Yes!" (Hopefully I'll have a photo to post soon.)

Here's the official news release about the budget:

SANTA FE – Governor Bill Richardson today outlined a fiscally
responsible plan to cut spending, save money and improve tax collections by nearly half a billion dollars to prevent a budget
shortfall.

“Because we have been fiscally responsible by expanding our economy and saving money during the good times, we are well positioned to deal with this worldwide financial crisis,” Governor Richardson said. “Rather than irresponsible, across-the-board budget cuts that would slash services, we have targeted our efforts in a smart and strategic way.

“My budget plan does not increase taxes; leaves essential services for New Mexicans intact; and keeps substantial and responsible cash reserves to protect us against further shortfalls,” Governor Richardson said.

Governor Richardson is proposing budget cuts and improved tax collections totaling $498 million for the current 2009 budget year, which ends in June 2009.

That plan includes:
Targeted Cuts to Agencies: $108 million
Increased Tax Collections: $79 million
De-authorize capital outlay projects: $263 million
Other one-time cuts: $48 million

Governor Richardson is proposing budget cuts, new savings, improved tax collections and money from cash reserves totaling $455 million for the 2010 budget year that begins July 2009.

That plan includes:
Targeted Cuts to Agencies: $290 million
Increased Tax Collections: $34 million
GSD and DoIT savings: $12 million
Cash from reserves: $119 million