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Home / Articles / News / Local News /  cram session
Round house
This week the Roundhouse will fill with lawmakers grumpy about the cost of hotel rooms and the governor’s plan to spend the state budget surplus.

cram session

Low energy prices plunge legislators into chaos

August 12, 2008, 12:00 am

“Don’t blink,” state Sen. John Smith, D-Hidalgo, says. “It could be a short one.”

Smith is talking about the special legislative session Gov. Bill Richardson has ordered for Aug. 15, only nine days before the political gaze shifts to Denver and the Democratic National Convention. But it’s not Barack Obama’s coronation as the Democratic presidential nominee that has Smith predicting a brief showdown at the Roundhouse. Nor is it Santa Fe’s Indian Market, which will jack up the nightly room rates for out-of-town lawmakers.

No, as chairman of the Senate Finance Committee and the Legislative Finance Committee, the legislative bodies that control the state’s purse strings, Smith says the money with which to legislate may not be there.

Initially, Richardson was pushing for universal health-care coverage in New Mexico, but has since scaled back the proposal to three bills that would provide all children under 18 with health insurance, increase electronic medical record security and consolidate government health-care agencies under a single entity. The governor’s CARE (Cash Assistance Relief Effort) Package would include a $75 to $150 credit for each taxpayer, depending on income, expanded tax holidays and $4 million in energy assistance for low-income homeowners.

Overall, the governor has called on the Legislature to pass spending in three major areas: $56 million from the state’s annual budget for the health care and insurance proposals, a one-time expenditure of $200 million for road improvements, and $210 million in tax relief and refunds to help citizens survive the sky-high gasoline prices.  
Ironically, it’s the low price of oil and gas that has lawmakers worried. Initially, the governor’s office projected a $400 million surplus from the state’s tax on oil and gas and another $400 million in recurring funds to play with during the special session. Now, however, as the price of natural gas has dropped 25 percent and crude oil has dropped 15 percent, Smith says the state could see as much as a $430 million shortfall in its “windfall.”

“It could jeopardize everything and I communicated to the governor that I was going to be shaping my opinion based on the forecast,” Smith, who met with Richardson on Aug. 10, says. “Personally, I think right now, if those revenue forecasts stay the course, none of [the governor’s proposals] are so important to merit a special session.”
Although the $56 million proposed for health care is only a fraction of the state’s annual budget for next year, Smith suggests that, if passed, education will be shortchanged during the regular legislative session in January. Either that, or the health-care spending could translate into new taxes initiated by the new batch of legislators taking office after the November election.

“What it sounds like to me is that if we run short on money, some of the victors that have prevailed on the Democratic side may be advocating tax increases,” Smith says. “I just think it’s ludicrous to have a tax increase when the federal government is trying to stimulate the economy.”

Gilbert Gallegos, the governor’s communications director, says there “absolutely” will be a special session and new taxes aren’t necessary. By the governor’s current projections, the state will have at least $100 million left for road projects and tax relief. Although that’s far below what it hoped for, the Legislature will get to hash out which proposals get cut or reduced.

Thus, the chaos of lawmaking begins. According to Gallegos, the governor has put health-care reform and the tax refund at the top of his priorities. State Rep. Peter Wirth, D-Santa Fe, tells SFR he is most interested in the road-improvement spending because unplanned construction costs have stalled several projects in northern New Mexico. State Rep. Dede Feldman, D-Bernalillo, chairwoman of the Legislative Health and Human Services Committee, says she is most excited about the proposed tax credit for childcare.

And that’s just the Democrats. According to Senate Minority Whip Leonard Rawson, R-Doña Ana, the Republicans have yet to form a united front for the session. However, speaking for himself, Rawson says while conservatives are usually all for returning money to taxpayers, he is opposed to doling out money based on projections. Doubly so when the revenue is coming from volatile commodities such as oil and gas.

“It’s like spending your inheritance when Aunt Molly hasn’t died yet,” Rawson says. “Then all of sudden you find out that you ticked Aunt Molly off and she ain’t giving you any. Now what are you going to do? You done spent it.”

In that scenario, the Legislature would have to consider new taxes once again.

“Raising taxes is absolutely not necessary,” Gallegos argues for the governor. “We’re talking about one-time money here. If we weren’t to touch this money now, you’d just have more than $100 million…available for political pork projects.”

But Rawson argues that the whole special session smells like one big political pork project.

“He’s thinking: ‘This is my last chance to make a mark as governor of New Mexico because my guy is going to win the presidency and I’m going to be helping him adopt his liberal agenda somewhere around the world,’” Rawson says. “I think we have to keep in mind that part of this can just be the governor trying to position himself for a better position [in] the Obama administration.”

Republican opposition may not have much of an effect in the House, where the Democratic majority passed many of the governor’s similar proposals during the 2008 regular session. Lt. Gov. Diane Denish predicts the trouble will again be in the Senate, where the balance of power is more precarious and Democrats like Smith are threatening to put their feet down.

“I would expect that the very conservative leadership on the Senate Finance Committee will be very focused on making sure we don’t start programs we can’t finish,” Denish says. “I expect there will be great scrutiny from the Committee. Actually, it’s already started.”

Richardson’s proposals may run into even more trouble if he sticks to his plan to implement them immediately. For example, to get the tax refund into the pockets of voters this year, the bill would have to pass with an emergency provision. That provision, in turn, requires a two-thirds majority vote. Smith and Rawson find common ground there: They don’t see how that’s possible considering the legislative makeup.

In fact, the only proposal that seems to have any consensus is one to set privacy standards for electronic medical records that match those in place for paper records.
Perhaps the only other sentiment lawmakers can get behind belongs to Rep. Sheryl Williams Stapleton, D-Bernalillo, who will be happy just to get out in time to cast her delegate vote for Obama in Denver.

“I couldn’t even begin to tell you what’s happening,” Stapleton says. “Nobody knows what’s happening. I don’t think the people doing the doing know what’s happening!”

 

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