Thursday, September 3, 2009

New Mexico After CDR

This story also appears in Haussamen

The revelation Governor Richardson will not be prosecuted for the CDR scandal comes on the heels of news the state, again, has underestimated revenues for the fiscal year, this time to the tune of $430-450 million, possibly more, through June 2010, for a budget of about $5.5 billion. Earlier this year the state adjusted to a $309 million shortfall for the fiscal year that ended in June 2009.

This leaves the state in a double crisis, one political, the other financial, and the two are connected. The political crisis can be summarized as a growing awareness the state is mired in a culture of entrenched corruption, coupled with a fear law enforcement is unlikely to do much about it. The decision not to prosecute the governor aggravated this sense of helplessness. Concerns are already circulating that Rebecca Vigil, the indicted former Secretary of State will get off. The governor's trip to Cuba has sparked rumors Richardson is about to be named ambassador to Cuba. Rumors, however baseless, reveal what is on peoples' minds, and right now impunity is high on the list. Meanwhile, Brian Colon, until recently Democratic Party state chair and currently candidate for Lt. Governor, continues as a member of the law team suing Smiley Gallegos for his default on a $5 million bond provided by the State Investment Council. This is a conflict of interest. As a candidate for Lt. Governor with party connections it seems unlikely he would want to court the animosity of House Speaker Ben Lujan, who supported his friend Gallegos for years despite serious accusations against him. Is there no shame?

The crisis of integrity in New Mexico politics is aggravating a fiscal crisis of unprecedented magnitude, caused in part by the drunken-sailor spending of Governor Richardson, who bullied his way into taking principle from the Permanent Fund, cutting taxes irresponsibly, and spending lavishly on education with no improvement in educational performance. Is there anyone who still believes Richardson has the slightest credibility, or interest, in deciding what to cut, now that the day of reckoning (for New Mexico!) has arrived, nine months after he hoped to be in Washington? But cut we must, and the fault lines in the legislature are already beginning to emerge.

On one side the governor proposes to cut everything except public education, which takes up 48% of the budget. Problem is, now that the first quarter of the fiscal year is gone, if education is not cut this will imply a 12% cut across the board elsewhere, including higher education, to get us to June 2010. Cutting health and social services by 12% would trigger something like a $400 million loss in matching funds from the federal government, a devastating blow to those who depend on Medicaid for health care. But Richardson can probably rely on the votes of legislators who collect state education paychecks, such as Sen. Pete Campos, Sen. Cynthia Nava, Rep. Mimi Stewart, Rep. Tomas Garcia, and Rep. Sheryl Williams Stapleton; they usually do what the governor asks in education matters. While the budget crisis poses a conflict of interest for these legislators, no one expects them to recuse themselves from voting, although they should. Should their votes in favor of education determine what gets cut, this will not enhance the ethical reputation of the legislature in the public eye.

An opposing side to the governor's budget plan has not yet emerged, although some proposals are floating, such as Sen. Linda Lopez's, advocating a roll-back of the tax cuts Richardson gave to the well off. In her case, as in others, it is not clear she can find the votes to raise taxes in an election year.

We have yet to hear much from respected legislative heavyweights, such as Kiki Saavedra and Senators John A. Smith and Stuart Ingle (there are others) about the fiscal crisis. Behind the scenes they are apparently trying to master specific details about a complex problem and perhaps sorting out the smoke-and-mirrors proposals from the more responsible ones before crafting legislation. Their leadership is crucial. Only a handful of legislators have enough stature and credibility to satisfy the public that forthcoming cuts are reasonably fair and necessary, as well as having the legislative clout to pass a bill. If these leaders don't step up to reassure the public, we may enter an election year with large sectors of the public lumping the political and economic crises together into one unhappy basket.

The two crises are linked. Public policy in New Mexico--whether building a courthouse, funding education, providing affordable housing, investing pension funds, or doling out contracts--has been abused as never before at multiple levels as a vehicle for self-aggrandizement, an entitlement to mischief, rather than a solemn trust. Just one transaction is said to have made $2 million in fees for Richardson buddy Marc Correra, who brokered a State Investment Council investment of $90 million in pension funds with Vanderbilt Capital Group, which (of course) contributed to Richardson's presidential campaign. The investment lost $86 million. The magnitude of the current fiscal crisis is just one of the costs: the loss of public trust is another. During the next few weeks and months legislators who have not squandered all of their credibility have a small window of opportunity to prove they can reverse the trend and steer the state through two of the most severe storms in the past ninety eight years of statehood. Can we set a goal to clean up the state by the 100th anniversary?


Anonymous said...

Great review of the state of the state under Richardson we are still 49 or 50th in every major area of government. We are a mess, how soon can Gov Martinez start?

Anonymous said...

Very well done Jose! But I think you're dreaming to think NM politics can be cleaned up by our 100 birthday. It is really too bad that NM is rising to the top as one of the most corrupt states in the nation, and only a few politicos are giving it lip-service.

GSal said...

Integrity and New Mexico politics seem to be mutually exclusive. We are like the drunken, senile uncle who is tolerated by the family but not respected or listened to. This is what New Mexico has become under corrupt leadership and someone will have to step up and say "No More." I hate to use the term transparency because it has been hijacked, but that is precisely what we need. With friends like Vincent makes me wonder what the Speaker's standards are for friendship. (I refuse to put Smiley because at some point grown men should be just that). I am not a Native New Mexican but my kids are, and the current direction is unacceptable. I am not a respecter of family names or ethnicity or wealth but I am a respecter of character, integrity and doing the right thing--even when you won't get a kick back!