Welcome to the second session of the 56th Legislature! The ship of state got underway today with the customary State of the State address by the governor to a joint session of the House and Senate. A bit of trivia: You may notice we count today as “Day Zero” of the session. Why? Days in the session actually run from noon to noon. Thus, day one really isn’t complete until tomorrow at noon, working to final adjournment at noon on February 15. If we counted today’s “half day” as “one,” we’d end up with a 31 day session instead of a 30 day. And now, on to important events!
‘New Mexico Is the Place to Be…We are Made to Lead’
With these words, the governor opened and closed a nearly one-hour, far-ranging state of the state message interrupted by protestors three times. (The governor exhibited poise as the hecklers were escorted from the House gallery by the Sergeant At Arms.) In her speech, she constructed a very ambitious agenda for a 30-day legislative session that is undoubtedly going to see a flood of messages from her as she places a plethora of bills on the call. In reality, some of the legislation proposed by the governor may simply lay the groundwork for action in next year’s 60-day session. It takes time to move an idea through the legislative process to the finish line.
Here are highlights from the governor’s address:
- Growing business: From our perspective, it was encouraging to see the governor open her remarks touting job, income and business growth in the state. Thanks to the remarkable amount of tax revenue contributed by the oil and gas industry, permanent funds have been increased by 200% since the beginning of her governorship. She touted the amount of new jobs created last year along with the economic impact of companies locating in the state. She also announced that Calgon Carbon, a manufacturer of air and water purification devices, is locating its business in Bloomfield, bringing in 2,000 jobs. What she didn’t say is also important to the business community: She didn’t mention the Paid Family and Medical Leave Act. This business-disrupting, job-killing proposal has been introduced once again and retains the major flaws we pointed out last session: speculative (at best) financial integrity of the fund; inability of small business to readily find replacement employees; vague and excessively broad eligibility requirements and only a token representative of business representatives on the advisory council for administration of the program.
- Converting brackish water: As the governor points out, New Mexico floats on an ocean of brackish water that could provide nearly limitless future supplies if it could be converted economically for commercial and residential use. She proposes a $500 million fund to create a strategic water supply – the fund to be generated from sale of Severance Tax Bonds (STBs). The idea has merit, but funding from STBs will need a hard look. Historically, STBs have been over-utilized, requiring the Legislature in the last few years to slow the rate of STB usage and pump additional funds into the Severance Tax Permanent Fund in order to ensure bond debt service can be met. STBs historically have supported capital outlay projects, principally for public and higher education needs. During the “bad years” of shrinking state revenues, STBs were used to close spending gaps, which, of course, resulted in overuse. With abundant state revenues, one needs to question the issuance of new debt in any form. The governor also tacked on the idea of using 2%, or $170 million, of the severance tax permanent fund, presumably each year, to somehow support development of advanced energy resources such as hydrogen.
- Scooping up federal bucks: Having recited several large new infrastructure projects funded in no small part with federal greenbacks, the governor is calling for a $100 million infrastructure matching fund to ensure that local governments don’t leave any of the federal money on the table. The source of the $100 million was not specified (presumably it would come from “new money”). Also, the governor called for $55 million to build electric-vehicle charging stations throughout the state.
Boosting housing programs: This would be accomplished by providing $250 million for low-interest loans and $250 million in home-buying assistance such as down payments. The governor stated that as a condition for receiving state funding, she’s asking the Legislature to require local governments to modernize their permitting and zoning ordinances by ensuring such meet national best practice standards. She’s certainly hit the nail on the head with this one as zoning and permitting are major stumbling blocks to housing construction. - Delivering more health care: Rural communities in particular would get an additional $100 million contribution to the Rural Health Care Delivery Fund. She’s also advocating a new hospital provider tax aimed at generating between $1.5 billion to $2 billion in annual state revenue to shore up the health care delivery system – exactly how, to be determined. New taxes in an era of sumptuous state revenues raise a red flag for us – let’s see how this one plays out.
Building on Structured Literacy: Citing statewide and Native American increases in reading competency and specific successes in Pojoaque and Roswell, the governor called for a $30 million appropriation for a statewide literacy institute and $30 million to provide free summertime literacy instruction to 10,000 students. She’s also asking for funding to extend school days to 180 statewide and for an additional $30 million to embed experts in underperforming schools to help turn them around. We like the sound of many of these initiatives – there’s no question that some bold steps have to be taken if New Mexico is to eradicate K-12 achievement underperformance. - Focusing public safety initiatives on guns: A clear priority for the governor is dealing with gun violence. There are, however, a few additional important proposals in her public safety package, including the call for keeping violent offenders in jail pending trial (establishing a rebuttable presumption to do so); enhancing commercial burglary statutes to treat repeat offenders; requiring treatment for habitual substance abusers and cracking down on panhandling for the safety of the individual and public. We have to applaud the governor’s tenacity on pretrial detention. She’s championed this idea for several sessions, and it’s time this one reached her desk over the objections of the criminal defense bar.
