HOUSE OKS REQUIRING PREVAILING
WAGE RATES BE PAID ON IRB PROJECTS
This evening after three hours of debate and proposed amendments, the House approved House Bill 6, sponsored by Majority Leader Reena Szczepanski (D-Santa Fe) and Rep. Joseph Sanchez (D-Colfax, Mora, Rio Arriba, San Miguel & Taos) by a vote of 41-26 with Ds voting yes, Rs voting no. The bill would require paying prevailing wage rates on Industrial Revenue Bond (IRB) projects. Prevailing wage rates, generally stated, are calculated as an average of wage rates by category of employment, i.e. electricians, heavy equipment operators, etc. The wage rates are significantly higher than minimum wages and are often influenced by wages earned by union labor, although labor availability affects the cost of labor also.
At the heart of this debate are two things: first, are projects financed with IRB’s public or private? Prevailing wage must be paid on public works projects paid for by public funds. Second, do prevailing wages increase the cost of projects, making New Mexico less competitive compared to neighboring states? In answer to the first question, IRBs are investments made by private industry to build a project of public benefit in exchange for tax exemptions. The private financier is on the hook for repaying the bonds. By any reasonable interpretation these are not public works projects in the true sense. Terri Cole, president and CEO for the Chamber, provided this testimony in committee on Feb. 7:
“The Chamber opposes HB 6 because it will make New Mexico less competitive in attracting private investment for industrial development. We all know that New Mexico already has trouble attracting capital, so we shouldn’t make the problem worse. We also know that raising the price of anything generally results in getting less of that thing – it’s among the basic laws of economics. Increasing the cost of industrial revenue bonds will not defy that basic law.
“States around us don’t put this kind of additional cost burden on their industrial revenue bonds. Developers are consumers like the rest of us – if they can get the same thing for a lower cost, they’ll shop there instead of here. The more private sector money we can attract for infrastructure development, the less public money is needed. And that stretches the amount of money available from the public sector. While perhaps well intended, we believe that HB 6 violates another immutable law: the law of unintended consequences. We ask for you to vote no. Thank you.”
Other States, Higher Labor Costs
Our research indicates that both Colorado and Texas have state prevailing wage laws that are strictly limited to public works projects, normally things such as road construction paid for out of public funds. Arizona has no state prevailing wage law and uses the federal Davis-Bacon Act, which confines prevailing wages to public works.
On average, labor is about 25% of the total cost of a construction project. So, higher labor rates are significant in terms of total costs. The answer to whether prevailing wage rates raise costs depends on where you stand. Generally, proponents of HB 6 say any higher costs are offset by higher productivity. A leading source of information for the construction industry, Gordian, says that on federal projects, costs can increase by 12-20%. Industry says that productivity does not offset most or all of these higher costs. As we said in our testimony and given the fact that our surrounding states do not require prevailing wages on IRB projects, it’s pretty easy to conclude that HB 6 will result in New Mexico being less competitive.
Amendments Proposed
Rep. John Block (R-Otero) attempted two amendments, both were tabled on party-line votes. The first amendment would have exempted small businesses from the requirement to pay prevailing wages if they could demonstrate financial hardship under rules to be developed by the Workforce Solutions Department. The second, would have provided exemptions to businesses seeking to locate or expand in New Mexico from prevailing wages on a construction project if a business could demonstrate to the Economic Development Department that paying such wages would make the project uncompetitive with other states.
The bill now moves to the Senate, where we will again oppose its adoption. Stay tuned for more news.
ELECTED STATE BOARD OF EDUCATION CA
LIMPS OUT OF SENATE RULES COMMITTEE
Last week, we reported on Senate Joint Resolution 3, which was again considered today by the Senate Rules Committee. The committee sent the proposed constitutional amendment forward to the Senate Education Committee with a “no recommendation” endorsement. SJR 3 proposes to re-establish an elected state board of education, which was dismantled by voters in 2013 because public schools were not producing student success (and they’re still not). That’s why the Chamber and others say that the governance structure isn’t the problem – it’s the lack of focus on student success.
Terri Cole, president and CEO of the Chamber, offered these comments to the committee last week:
“We respectfully oppose this legislation because it would inject more politics into public education, and that’s the last thing we need. Putting a large, partially elected group of people in charge of our state’s education system is a recipe for more division and acrimony. Local school boards across America are under fire for governance issues – many local boards are hotbeds of political chaos – and they routinely lose focus on student needs and outcomes. Why would we want a similar situation at the state level?
“We also want to emphasize that this resolution does NOT adequately protect public charter schools. It would eliminate the current state charter school authorizer, which is performing very well.
“Finally, the number of adult decision-makers is not driving students’ unacceptably low academic performance. This resolution is not going to fix what’s broken. Let’s not advance a so-called solution that hasn’t worked before and won’t again.”
As Sen. Heather Berghmans (D-Bernalillo) observed, not long ago voters dismantled an elected Public Regulation Commission. They did so because the commission was a toxic cocktail of dysfunction and politics prevailed over policy. Moreover, the people elected often lacked the education and experience to govern the complex world of public utility regulation. The PRC is now appointed by the governor from a list of nominees who have been screened for education and experience and is now functioning in a professional and stable manner.
Since we once had an elected state board of education, we have experience on what will happen if we go back to the future. The board will devolve into politics and acrimony, more focused on members’ district needs than statewide policy and performance. Committee Chair Katy Duhigg (D-Bernalillo) expressed reservations about the politicalization. She noted the increased level of politicization and acrimony of local school boards and is concerned that could happen at the state level. She is also troubled about the potentially negative impact on charter schools.
The “no recommendation” was likely given, as opposed to tabling, to allow the sponsor, Sen. William Soules (D-Doña Ana), an opportunity to see if he can modify the joint resolution to remove opposition. We’ll keep you posted as the measure is considered by Senate Education.
SENATE RULES GIVES UNM AND NMSU ATHLETICS FUNDING A BOOST
“The world of athletics has changed beneath our feet,” said Sen. Antonio “Moe” Maestas (D-Bernalillo), cosponsor of Senate Bill 268 that passed the Senate Education Committee this morning on a vote of 8-1. Maestas and cosponsor Sen. George Muñoz (D-Cibola, McKinley & San Juan) are proposing to appropriate $2.5 million from the general fund to the University of New Mexico (UNM) and $2.5 million to New Mexico State University (NMSU) to support athletics programs.
Terri Cole, president and CEO of the Chamber, spoke in favor:
“College athletics are a key front door to a university, city and state. And right now, at UNM, we need to enhance the resources available to the department to compete with other Mountain West Conference teams and win. Currently, we have the second-lowest athletics budget in the MWC, and yet, we are near the top in both championships earned and the percentage of our athletics budget that is directly generated by the athletics department.
“From an economic development perspective, especially in a city without an NFL or NBA team, it is imperative that we cement ourselves as a college sports university… a college sports city… and a college sports state. We need ‘Albuquerque’ to become synonymous with the Lobos, in the same way we see that in places like Chapel Hill, Tuscaloosa, and Morgantown.
“The economic return is real, and as the university and the broader community up their contributions to athletics, we need our partners at the state to do the same – especially in light of conference realignment, the transfer portal, new revenue sharing and NIL rules, and other changes that make competing more important than ever.”
Specifically, the money is aimed at providing support to student athletes for nutrition, counseling, tutoring and other needs. It is not to go to NIL – bonus points if you know what that is. NIL stands for Name, Identity and Likeness. It’s what allows student athletes to be paid. Money for NIL usually comes from private contributions to a foundation. This appropriation is to be applied to all sports sponsored by the universities. This was the major concern of committee members – that the money not go to NIL and is fairly distributed to all athletes, not just football and basketball.
Cities and states that have invested in their college athletics programs have seen a significant return on investment through higher ticket sales and revenue from bowl and championship games and more lucrative TV contracts. For example, Vanderbilt University beat Alabama, soaring their attendance and viewership. That was only possible because Vanderbilt stepped up their support for athletics. An investment in college athletics is an investment in economic development, bringing more jobs and revenue to the state and local governments.
There was a tense moment near the end of the meeting in an exchange between committee chair Sen. William Soules (D-Dona Aña) and Muñoz. Because the athletic directorship at NMSU was vacant at the time the bill was drafted, Muñoz included language prescribing the qualifications of the athletic director. “I take offense at that,” Soules said in an elevated and stern voice. He proposed an amendment to remove the offending language, and Muñoz readily agreed. A little of the Rivalry on the Rio Grande surfaced even in a legislative committee hearing. Go Lobos! Go Aggies!
SENATE RULES TABLES RESTRICTION ON
HIGHER EDUCATION EXECUTIVE HIRES
It’s no secret that Western New Mexico University’s deal with their president was very concerning to many people, and no one wants to see a repeat of that anytime soon. Sen. George Muñoz (D-Cibola, Mckinely & San Juan), chair of the Senate Finance Committee, came forward with Senate Bill 266 in an attempt to put guardrails around contracts for higher education executive hires by requiring a review by the State Board of Finance.
Under SB 266 the State Board of Finance (composed of the governor, treasurer, lieutenant governor, secretary of the Department of Finance and Administration and four gubernatorial appointees) could accept, reject or modify the contract negotiated by the governing board of an institution of higher education. This could cause a long delay and be a barrier to top candidates even wanting to apply in New Mexico. In addition, there were concerns over loss of accreditation. Consequently, the Senate Education Committee elected to table the bill on a 9-0 vote.
Terri Cole, President and CEO of the Greater Albuquerque Chamber of Commerce, opposed the measure:
“I’m here today in opposition to SB 266. We understand that a certain incident at one of our universities has caused great concern. However, with all due respect, SB 266 places excessive burden on innocent parties.
“Our colleges and universities need the flexibility to pursue the best talent available. The state Constitution charges the governing boards of our higher ed institutions with the responsibility to govern. They need to be allowed to do their jobs without the inherent delays and, frankly, the micromanaging that the Board of Finance is asked to do.
“We question why an appointed State Board of Finance would be better suited to handle the oversight of key university hires than appointed regents. Please vote no, thank you.”
No one appeared in support of the bill, but significant opposition from the higher education community joined the Chamber, including the New Mexico Independent Community Colleges Association, the Santa Fe Community College board, the Central New Mexico Community College Board and the New Mexico Council of University Presidents. Each of these expressed extreme concern about losing accreditation if the bill were to pass. Rules governing accreditation require that decisions be made by the governing board of the institution without outside intervention or interference. This bill runs the risk of violating those rules, especially since the Board of Finance can be viewed as a political entity because elected officials and gubernatorial appointees constitute the membership.
Sen. Martin Hickey (D-Bernalillo) advised that the bill over-reached. “If the recruiter can’t make a deal then and there because of a delayed process of two to three months, why would any candidate want to come here?” Hickey is concerned we get a bad reputation and really hurt the state in hiring and retention of higher education leaders. We know full well that higher education plays a key role in economic development by graduating highly qualified students and by the contributions of research and development. We need a strong, vital and robust system of universities and community colleges. If we’re to get the best out of our institutions, we must be able to compete nationwide for top leadership talent. To our knowledge, no other state puts these kinds of restrictions on hiring.
We sympathize with Muñoz’s goal; unfortunately, this path seems to be fraught with too many unintended consequences. Perhaps there is another way to reach the goal that’s less problematic.
HOUSE HEALTH TABLES PLAN TO BRING DATA
TO HEALTH INSURANCE BILL DEBATES
This morning the last bill the House Health and Human Services Committee took up, House Bill 279, Actuarial Review of Proposed Legislation, sponsored by Rep Nicole Chavez (R-Bernalillo), drew no opposition in online or in-person testimony.
A motion to give it a “do-pass” vote failed 6-3.
The Chamber was there in strong support of the bill, which is targeted at getting data to lawmakers before they have to decide on bills that affect health insurance. It’s simply responsible, and responsive, to the needs of New Mexicans and designed to give representatives and senators the data they need to make informed and pragmatic decisions that help get, and preserve, New Mexicans’ access to affordable medical coverage. We’re talking data on specifics such as a proposed bill’s effects on:
- New Mexico businesses that provide coverage to their employees
- Premiums or out-of-pocket costs
- Health-care providers
- The short- and long-term health of New Mexicans.
J.D. Bullington testified for the Greater Albuquerque Chamber of Commerce, telling the committee:
“Largely through the influence of the Legislative Finance Committee, constructing budgets and legislation has become much more evidence-based. The more data that can be obtained, the less fog clouds decision making, and the less speculation is injected into discussion and debate.
“HB 279 is aimed specifically at getting more data about the possible effects of adopting proposed health care legislation. This goes beyond just the fiscal impact to the state budget and encompasses the impact on patients and providers – on affordability and availability of care, and on the effects to state programs like Medicaid.
“This proposal takes an important step forward in getting a more complete picture of proposed changes to our very complicated health care service system. We ask you to vote yes on HB 279.”
Joining the Chamber in the committee room in support were:
- The National Federation of Independent Business New Mexico, representing the state’s small business that are trying to offer the best possible benefits to their employees while keeping their doors open. It said the bill will deliver “better decisions and fewer unintended consequences.”
- The New Mexico Chamber of Commerce, which explained the bill “provides a structured process to ensure legislators have the necessary facts to make decisions that expand health-care access without driving up the costs for business and consumers. A stable and affordable health-care system is essential for attracting new businesses and keeping New Mexico competitive.”
Committee member and Minority Whip Rep. Alan Martinez (R-Sandoval), said HB 279 “would add to transparency. And I think this is a great idea that maybe someday we could expand to every piece of legislation we introduce.”
However, Thomson said the Legislature has been trying to do something similar for a decade, and HB 279 “puts the cart before the horse.”
After 10 years of trying, and considering how complex and expensive health care insurance can be, New Mexicans need someone to finally hitch that horse up.
HOUSE JUDICIARY SENDS TWO MORE
HEALTH-CARE COMPACTS TO THE FLOOR
This afternoon the House Judiciary Committee wrapped up its handling of two more health-care compact bills. The committee heard testimony on House Bill 79, Audiology and Speech-Language Pathology Interstate Compact, and House Bill 81, Occupational Therapy Interstate Compact, both sponsored by Rep. Elizabeth “Liz” Thomson (D-Bernalillo), last week but wanted the bills and their amendments aggregated into committee substitutes in order to have “clean bills to send to the House floor.”
Each committee substitute received resounding 8-0 “do-pass” votes.
As we have written before, the Chamber supports these as well as their counterparts moving through the Legislature this session as a means to increasing access for New Mexicans to medical providers. The compacts allow providers who are in other states to move here and practice, or provide telehealth services from another state, without having to jump through the hoops of applying for, paying for, and waiting for a license to practice in New Mexico. The goal in joining these compacts and providing reciprocity is to make more providers available to New Mexicans for everything from care to education to second opinions.
As an example, the audiology and speech-language pathologist compact has 34 states and U.S. Virgin Islands as members. That promises to exponentially increase access to care for New Mexicans.
Both bills previously sailed through the House Health and Human Services Committee with unanimous 8–0 votes. Last week in House Judiciary there was zero opposition testimony in person, online or from the committee. Their amendments clean up language and incorporate background checks that are required for compliance with the multi-state compacts.
J.D. Bullington testified in support of the bills for the Chamber last week, emphasizing “It’s no secret we have a dire shortage of all medical professionals in New Mexico. Making it easier for licensed providers in other states to treat New Mexicans – be it in person or in a telehealth setting – is a real way to begin to get more New Mexicans the care they need and address the lack of providers here while at the same time encouraging them to practice in, perhaps even move to, our state.”
Others in support of the compacts include: the Department of Defense, Think New Mexico, the occupational therapy compact, the New Mexico Speech and Hearing Association, the New Mexico Military Base Planning Commission, the New Mexico Conference of Catholic Bishops, the University of New Mexico, the Occupational Therapy Association, the National Alliance on Mental Illness, Voices for Children, Los Alamos County, the League of Women Voters, AARP and therapists in the respective fields mentioned in the bills.
Currently, New Mexico is part of one health care compact – for nurses. Think New Mexico says by comparison, Colorado is part of all 10 that are in place, Utah is in nine, Oklahoma is in eight, Arizona is in six and Texas is in five. It’s also important to point out that the state gives up no oversight in any of these compacts, according to the bills’ analyses, and preserves “the regulatory authority … to protect public health and safety through the current system of state licensure.”
Thomson explained last week that the compacts are one piece of a more comprehensive answer that includes increasing Medicaid reimbursements, adopting incentives such as tuition and housing assistance, and other measures, and she said if anyone has a proposal to help attract and keep medical professionals, she’d “be happy to carry that bill.”
Additional compacts will be heard this session (Thomson said she believes a dozen are in the works), and the Chamber will follow HB 79 and 81 and all the others with the goal of getting them to the governor and signed and into law.
BILL TO EXPUNGE EVICTION RECORDS
IS HEADED TO A HOUSE FLOOR VOTE
This evening, House Judiciary Committee members took up House Bill 98, Expungement of Eviction Records, sponsored by Rep. Janelle Anyanonu (D-Bernalillo).
The Chamber has testified in strong opposition to the bill, which though well-intended will leave landlords in the dark as to their prospective tenants’ past behavior – everything from pattern of nonpayment to running a meth lab out of the rental unit. As Enrique C. Knell told the committee today:
“Landlords have a lot at stake when they rent a property. It’s their livelihood, and many properties are substantial personal investments.
“Property owners have a right and need to know who they are renting to. Past actions are often a predictor of future behavior. Eviction is a tough course. The landlord must establish legal grounds, serve notice to the tenant, wait for a response or compliance, file an eviction suit, attend a court hearing and prevail in the case.
“Property owners often voluntarily disregard prior eviction records based on the initial interview with a potential tenant because renters sometimes run into temporary trouble without creating a long-term pattern of irresponsible behavior. But the property owner should still have access to prior court records, and they should be a consideration during a contractual negotiation.”
The Chamber was joined in opposition by the Apartment Association of New Mexico, the New Mexico Association of Realtors, the New Mexico Business Coalition and others. All focused on the need for property managers and landlords to have complete information on potential renters’ histories.
Supporters of the bill focused on rising rents and the struggle to find affordable housing, important issues but ones not germane to eviction records and the need for landlords to have full information when renting their properties.
We would say the landlord-tenant relationship should be one entered into with all the facts on the table. Erasing eviction records after just five years would essentially blindfold landlords to prospective tenants’ rental history. That is patently unfair to someone who is putting their property in another’s hands.
Judiciary Committee members voted 5-4 to send this misguided bill to the House floor. We’ll be there to let you know if it crosses over to the Senate.
END NM’S PERSONAL INCOME TAX? NOPE
– HOUSE TAX COMMITTEE TABLES IT
Freshman Rep. Elaine Sena Cortez (R-Lea) took a mighty big swing today. She presented her House Bill 275 – Remove Personal Income Tax (PIT) before the House Taxation Committee. Her bill proposed to completely eliminate personal income tax in New Mexico. Sena-Cortez sparked a good discussion about New Mexico tax policy before the committee tabled her bill, effectively killing it.
Sena Cortez emphasized the need for a favorable tax environment to attract essential professionals such as doctors, mental health professionals, public safety professionals and construction workers to New Mexico. A competitive tax structure is crucial for retaining current workers and attracting new ones.
Enrique C. Knell was there to support the bill on behalf of the Chamber, saying there are plenty of reasons to move away from an income-based tax system:
“First, it taxes wealth and discourages investment and savings. Taxes on consumption rather than savings, properly structured, result in wealthier taxpayers paying a greater share because they buy more expensive things. Unlike an income tax, you don’t have to continually chase loopholes and, frankly, fraud. Second, it makes a state a more attractive place to live in. Texas and Florida, two of the most robust state economies, are a testament to that fact. With our surpluses and the fact that income tax makes a relatively small contribution to overall state revenues, we should be able to work our way out of this reliance and move to other revenue sources that are more straightforward.”
Not surprisingly, lots of people opposed the idea of using our budget surplus for this type of tax relief. For example, the head of a major union group suggested using the surplus to hire more state employees and pay them more.
Some legislators, like Speaker Javier Martinez (D-Bernalillo), expressed serious concern about how losing this revenue would affect lower-income New Mexicans. For example, he said, current programs save families an average of $20,000 a year for child care. Eliminating the personal income tax could cause a $20,000 “tax increase” on these families as the state is forced to cut back on child-care benefits.
Rep. Micaela Lara Cadena (D-Doña Ana) said it’s a conversation worth having during the interim. She expressed her concern that eliminating the personal income tax disproportionately helps “the rich” while hurting lower-income New Mexicans. She did say that it’s possible to “use the personal income tax infrastructure to spur economic development, though she said it would have to be “pointed and purposeful.”
HB 275 appears to be stuck in a deep PIT at this point. We’ll let you know if it climbs out this session. We’ve learned by now never to say never in the state Legislature.
AROUND THE ROUNDHOUSE
D.C. Comes to New Mexico
A joint session today brought speeches from three members of New Mexico’s federal delegation, specifically Sens. Martin Heinrich and Ben Ray Luján, and Rep. Teresa Leger Fernández of Congressional District 3.
Each federal legislator took a turn at the dais to congratulate the New Mexico State Legislature on its work in areas like education and health care.
Heinrich touted his work on the federal Apprenticeship Pathways Act and urged state-level support for hands-on learning experiences. He stressed the importance of working together to ensure freedoms for future generations, including health-care decisions, marriage equality and safety in classrooms.
Luján spoke about the need for better water and broadband infrastructure throughout New Mexico.
Leger Fernández was the most fiery out of the bunch, warning that proposed federal budget cuts will not save money but will instead destroy essential government services that Americans rely on. She then touted her own bipartisan work that included working with the entire delegation to ensure funding for fire victims in Las Vegas, N.M., as well as $770 million for the Navajo Gallup Water Supply Project.
Luján’ mother attended with him. She was recognized and received a warm welcome. You may remember that her husband and the senator’s father, Ben Luján Sr., served in the State House from 1975 until he passed away in December 2012. He served as speaker of the House from 2001 until his death.
IN THE HOUSE
Rep. E. Diane Torres-Velásquez (D-Bernalillo) introduced House Memorial 26, which marks Feb. 17, 2025, as Viola Florez Tighe Day in the House of Representatives. Dr. “Vi” Florez was born in Bloomfield and taught at the University of New Mexico, where she was the dean of the College of Education, as well as serving as provost twice during her tenure. She passed away on Jan. 21. Rep. Marianna Anaya (D-Bernalillo) rose in support of the memorial and said Dr. Florez watched her grow up as part of the Hispanic Women’s Council. Rep. Cynthia Borrego (D-Bernalillo) also rose in support of the memorial for the impact that Dr. Florez has had in the community. The House members joined in on a song of “Las Mañanitas” in honor of Dr. Florez Tighe.
SIGNING OFF FROM SANTA FE
Some days, you just have to scratch your head in bewilderment. What part of “our businesses, especially our smaller ones, are struggling to recover from COVID-19 and rampant inflation” don’t folks understand? What do they think will happen if, for example, Paid Family Medical Leave (up later this week), staggering increases in minimum wages and paying prevailing wages all pass and are signed into law? The increased costs will overwhelm many – it’s too many things being loaded on the wagon.
With the largesse in the state treasury, if folks really want PFMLA, then pay for it out of the mega bucks rolling around in the state coffers and let the state deal with the uncertainties and probable cost increases down the road. Instead of raising the minimum wage, how about giving tax reductions, especially to working families, so they have more spending money, which doesn’t contribute to inflation. Rather than making IRBs less attractive in New Mexico compared to other states, how about we set that on the shelf and spend some real money on promoting tourism and boosting our college athletics, both of which bring in money and jobs to the state. Laying more costs on the backs of businesses is exactly the wrong thing to do to make our state more competitive and raise the standard of living. It’s a head-scratcher for sure.
Thanks for being with us today, and we’ll look forward to bringing you all the news and views tomorrow. Until then, have a mah-vel-us evening.
