Is There Something Wrong With This Picture?
On a chilly Wednesday evening in Mesquite this week people sat glumly around a square table in the conference room at the fire house. An outer circle formed as people filled empty chairs against the walls of the room. Senator Mary Kay Papen opened up to a crowd of about 30 with a summary of the state’s bleak fiscal condition: a $600 million shortfall in 2011 for a $5 billion budget that was $6 billion in 2009; massive cuts in spending unavoidable; zero capital outlay funds for new buildings, repairs, or one-time expenditures for community projects—normally an important source of funding for small communities; no likely turnaround for another three years.
County Commissioner Oscar Vasquez Butler, an articulate, cowboy-hatted advocate for the downtrodden, suggested the legislature should eliminate what he characterized as rampant “double-dipping” by state employees in high paying positions. He was referring to a loophole approved at the governor’s request a few years ago, permitting employees to return to state government 3 months after retirement, getting full salary plus retirement benefits without having to contribute into the retirement fund. The system, he said, is being abused by the governor, who has rewarded loyalists with key high-paying positions. The senator was sympathetic but said she didn’t think the governor had placed this item on the “call,” for the legislative session that starts next week. So the legislature cannot deal with it.
Martin Nieto, president of a newly formed public water utility, said he cannot qualify for available state funds for infrastructure because the state is inflexible about requiring three years of audit reports. His utility, only six months old, cannot produce them. He needs these funds to leverage available federal dollars. Utilities are eligible for special federal funds since the county has a high proportion of designated “colonias,” communities without essential infrastructure needs. Fire chief Alfred Nevarez said he needs a stipend for his volunteer firefighters. Recruitment and retention are down and his ability to provide protection, including EMS, is seriously compromised. Jesus Carrasco complained that out of 40 contracts and subcontracts given out for Spaceport America so far, only 4 relatively small subcontracts were given to Dona Ana County firms. Governor Richardson and local real estate developers persuaded citizens of Dona Ana County to vote themselves sales tax increases three years ago to subsidize the private spaceport, promising contracts and high paying jobs during the construction phase. Most contracts went to Albuquerque, which is not taxing itself for the spaceport, and there are accusations that some contractors are not paying prevailing wages, as promised. The state has already subsidized the project by over $200 million, but the boom promised for the county has not materialized.
The five communities represented at the firehouse are in the South Mesilla Valley, which has 22,000 registered voters. Obama received 68% of the SMV vote in 2008. Richardson got 71% in 2006. Per capita incomes in the communities in 2008 ranged from about $8309 in Vado and $9379 in Mesquite, a little higher in Desert Sands and Berino, and about $15,086 in La Mesa. US per capita personal income in 2008 was $36,031. As Espy Holguin, a long-time community activist in the South Valley, said to the senator, “it’s not as if these people are asking for swimming pools and luxury items. We’re talking basic stuff like fire protection and sewers and jobs.”
Arturo Uribe asked whether the $82 million subsidy to the film industry would end or if the state were to roll back the $200 million in tax cuts for the wealthy, a gift from Richardson enacted a few years ago. One university study in 2008, he pointed out, indicated the film subsidies were getting back less than fifteen cents in revenues for every dollar taxpayers spent on the subsidies. The governor had taken these items “off the table,” Sen. Papen explained. They were “near and dear” to him.
Richardson was forced to withdraw his nomination for a cabinet position last year in light of an FBI investigation into cozy relationships between the state and Richardson campaign contributors. Investigations and lawsuits are ongoing a year later about relationships between Richardson friends and fees paid to third party agents seeking to invest hundreds of millions of state pension funds. In one single transaction the state is alleged to have violated its own rules on prudent investing to dole out $90 million to a well-connected party, only to lose $86 million. All in all hundreds of millions were lost.
Under Richardson’s administration the state enjoyed an unprecedented spending spree, raising the budget much faster than economic growth, against the advice of Senator John Arthur Smith, who warned that the rise in spending was unsustainable and would lead to pain when oil and gas prices fell. Richardson ridiculed Smith by calling him “Dr. No,” just as oil and gas prices began to plummet.
Asked whether the legislature has the sentiment to challenge the governor about his spending and taxing priorities during the worst fiscal crisis the state has faced since the Great Depression, Senator Papen, who has frequently challenged the governor and paid the price for it, said she didn’t think the will existed in the House, where the Speaker is close to Richardson and rarely challenges him. In the senate, she said, she just wasn’t sure.
Senate Finance Chair John Arthur Smith met with a smaller group at the same fire station the next day. Smith, who more than any single legislator has warned his colleagues about the perils of fiscal irresponsibility, often to deaf ears, said he was determined the legislature would not have its hands tied by the governor’s restrictive “calls,” but he admitted he didn’t think the votes were there for a serious challenge to Richardson.
Civic leaders in the South Mesilla Valley are wondering aloud just why legislators won’t challenge an $80 million subsidy for Hollywood film makers or “double-dipping” during an economic crisis in a state with the third highest poverty rate in the country. Is there any moral courage or authority left in the state legislature? Who does state government belong to?