Session Preview

There's a feeling many people are familiar with before they ski something steeper than is comfortable, or are about to make a work presentation, sing in the church choir or start a race: It's butterflies. That tingle in the tummy that signals anxiety, excitement or both.

So it is with many lawmakers as they ready for the legislative session that begins Jan. 15. Catch them at a committee hearing and they'll tell wild stories of 10,000 bills being introduced to sop up the billions in surplus money gushing in from the oil wells in the Permian Basin. That's extraordinarily unlikely—when Bill Richardson took office in 2003's healthy economic climate, and after eight years of Gary Johnson, there weren't even 2,500 pieces of legislation offered up. Still, it's a pretty solid indicator of the mood around the Capitol.

For New Mexico's 112 legislators and one new governor, the next 60 days will go a long way toward setting the tone for Michelle Lujan Grisham's tenure. With almost $1 billion in surplus revenue this year and even more than that anticipated for spending next year, the state has room to breathe and consider new programs for the first time in what seems like a decade. It will likely not be this flush for years to come.

Add to that an influx of Democrats at every level of government, in every statewide office, and it starts to feel very much like the butterflies at the start of a race. As in a race, however, no matter how fast you go, you're in trouble if you run off in the wrong direction.

"There's been a lot of pent-up demand and frankly, frustration," says Sen. Majority Leader Peter Wirth of the lawmaking sessions under outgoing Gov. Susana Martinez, noting that her pledge to not raise taxes made a host of bills automatic vetoes. (Of course, the governor wasn't shy about signing laws that granted new taxing authority to local governments, so it's something of a Pyrrhic victory.)

SFR spotted the Santa Fe Democrat last month milling about with legislative leaders from both parties outside Lujan Grisham's transition office as they waited for a meeting. Wirth says those meetings rarely happened under Martinez. It bodes well for a productive session, he says, and he's not alone in thinking that.

"I've known Michelle a long time, since she worked for Gary Johnson," says Sen. Steven Neville. "She's always been fair and a straight shooter."

The Aztec Republican is under no illusion that the new governor will be pushing a Republican-friendly agenda.

"There'll be a difference in philosophy and emphasis. Republicans are always stronger on business and Democrats are always stronger on environmental and social issues," he tells SFR.

But Senate Republican Leader Stuart Ingle sees room to negotiate for his red side in a sea of blue.

"No governor should get all that they want, and not all legislatures should get what they want," he tells SFR in a phone call from somewhere in his district around Portales, "because none of us is right all the time."

Lujan Grisham's staff tells SFR they couldn't squeeze an interview about her legislative agenda and plans into her schedule, nor did a legislative aide make a promised phone call. At the same time, she hasn't exactly been coy about what she'd like to do. It's the specifics of the bills and proposals that will define what gets passed in the coming 60 days.

"We want to make sure that we are looking at raising the minimum wage. We want to talk about making sure we're paying our educators more, … that we have a system that's investing in the classroom," she told SFR at a news conference late last month, adding that lawmakers are anxious to see hard numbers in a budget.

Speaker of the House Brian Egolf has been talking about an "education moonshot" since the midterm elections began. The state is under a court order to spend more money on education, and there's been talk that it might take something like $1 billion more to bring the state up to an acceptable, equitable level for all schools. That's an astounding increase; the budget for K-12 schools this year is $2.7 billion.

READ MORE: Watch These Issues – As legislators head into the 2019 session, here are the topics they'll likely tackle

Egolf says $1 billion is too much for one year.

"If the Legislature were to put $1 billion into K-12, most of it would be returned. You can't hire teachers that quickly or implement programs that quickly," the Santa Fe Democrat says. He tells SFR a more likely framework for ramping up spending is four or five years. "It's very possible that number could end up looking like $800 million to $1 billion," he says.

Lawmakers are also ready to fix stuff both literal and figurative.

Ingle points to roads in what he refers to as "the cash register for New Mexico" in Lea and Eddy counties, where oil and gas development is booming.

"You're talking as many as 40,000 trucks on one strip of road in a day," he says. It's a number he scoffed at initially. "Until you see it down there, it's unbelievable. And that's 24/7. Nobody's roads are able to stand up to that kind of punishment."

Democrats like Wirth agree, though how to pay for improvements is likely to be a bone of contention.

"It's time for us to have recurring dollars for roads. The key is to have it dedicated and not in the general fund," Wirth explains. That might mean trying to increase the tax on gasoline, which hasn't seen a hike since the early 1990s.

The state also has to figure out how to pay off tax credits given to companies for film and television production in New Mexico. The current yearly cap on incentives of $50 million has resulted in a $180 million backlog owed to companies.

READ MORE: A Taxing Dilemma – Is now the time to rewrite New Mexico's tax code?

Egolf says the arrival of Netflix studios to Albuquerque heralds a monumental leap in the state's status in the production industry, but he also looks to ensure the $50 million cap for incentives doesn't get eaten up by the big dog every year. What to do about the cap will be one of the session's premier debates.

When it comes to capital outlay—the brick-and-mortar projects that bring money into communities around the state—a plan is in place to use surplus money for the projects that normally require the state to borrow money. It will save costs on interest and, some lawmakers believe, bolster New Mexico's credit rating. It's a wonky move, but it's designed to save money in lean years by making it cheaper for the state to borrow then.

Lawmakers can, and likely will, spend tens of millions of dollars squirreling away money in funds that they raided to make it through New Mexico's prolonged recession. They'll fix those funds and build the state's reserves to somewhere around 20 percent in an effort to avoid the kind of gut-wrenching decisions they had to make when the state wasn't growing its economy.

"That is still very fresh," Wirth says. "Our members remember that we've been through some extraordinarily difficult times."

That produces a whole different kaleidoscope of butterflies in the stomachs of policymakers, and no one is anxious to have that feeling ever again.

Ask a Prof

Democratic control of every state office and the Legislature means the next two years—and likely four—will be their show.

Academics call it unified government and these days, it's a lot less likely to produce the will to compromise, says Metropolitan State University's Robert Preuhs.

A professor of political science in Colorado, Preuhs is keeping his eyes on the Centennial State's government, which experienced a similar blue wave last fall. Democrats even flipped the state Senate, winning it back from Republicans in a state in which there are more independent voters than either party has registered members.

"My guess is you'll see some bolder Democratic proposals fairly quickly," he tells SFR. Preuhs says the "current structure of political polarization" gives either party less reason to compromise, a scenario which he says is not necessarily bad for government in the long term.

"I think you actually get more policy experimentation when unified government does occur," he explains. Republicans may not be fond of the experience or the experiment, he points out, but with the federal government likely to be gridlocked for the next two years, innovation needs to happen at the state level.

"On one hand this is their chance," Preuhs says. But while Democrats may not feel the need to listen to Republicans, they still need to be mindful of voters. "On the other hand, the risk is taking policy too far to the left."