Governor Susana Martinez today vetoed Senate Bill 12, a measure that would have significantly decentralized her office's authority over the New Mexico Finance Authority.
State Sen. Tim Keller, D-Bernalillo, proposed the reforms following last summer's controversy over a faked internal audit from the agency. NMFA, a quasi-governmental agency, helps local
governments in new Mexico score high-rated bonds for infrastructure projects.
Keller's bill, which passed unanimously in the state senate and had just two dissenting votes in the state house of representatives, would have evenly split the governor's appointing power of NMFA's board of directors with state legislators while requiring a certified public accountant to serve on its auditing committee.
Currently, Martinez has authority to name five of NMFA's 11 board members, but four others are comprised of the governor's cabinet secretaries. The NMFA reforms would limit the governor's appointee power four members and allow both parties in the Legislature to appoint four other members (the remaining two board members are city and county representatives).
In her veto message, Martinez explains that Keller's reforms would be "stripping the board of subject-matter experts who currently oversee the financing of critical local infrastructure projects."
"Because of the nature of projects that are overseen by the NMFA, having cabinet secretaries or others who specialize in environment, energy, finance, and economic development is not only necessary, it is vital to carrying out the mission of the NMFA," Martinez writes.
Keller, however, has argued that adding more checks and balances to the agency would add accountability to NMFA and help prevent a fake audit from ever happening again.
The veto comes just days after the Albuquerque Journal editorial department, known for its right-of-center leanings, praised NMFA's "turnaround" under new NMFA board chairwoman Nann Winter, a Martinez appointee, for maintaining high bond ratings despite last year's controversy. Keller opposed Winter's confirmation because of her law firm's contracts with the state Department of Transportation, which is in charge of public projects tied with NMFA.
"The changes in Senate Bill 12 fail to address the real structural challenges with the NMFA, which stem from its role as a quasi-public agency that is not subject to adequate public accountability," Martinez writes. "I personally asked one of the bill’s sponsors to embrace reform that would bring the NMFA under the State Budget Act and the Procurement Code. I was extremely disappointed that those recommendations were not considered or reflected in the final version of the bill."
But Keller and others have maintained that NMFA must operate separate from the state's procurement code in order to get Wall Street-quality bonds. In other words, Keller argues that if NMFA were under the state's procurement code, local infrastructure projects would cost taxpayers more money.
"If you want an independent bonding agency, it can't be a part of state government," Keller told SFR in February.
Keller modeled his NMFA bill after his successful reforms to the State Investment Council, which underwent its share of controversy under former Gov. Bill Richardson. He was later awarded a Light of Liberty Award from the libertarian Rio Grande Foundation for his SIC reforms.
Read Martinez' veto message here: