Welcome to the Legislative Roundup, your update on the most important news from the Legislature

Let’s Not Leave all That Money on the Table

This morning the House Rural Development, Land Grants and Cultural Affairs Committee gave a unanimous 6-0 Do Pass to HB 177, the N.M. Match Fund, which would use $100 million to set up the non-reverting fund to “make grants to an eligible entity: (a) for state matching funds for federal grants; and (b) to offset higher project costs incurred to comply with federal requirements.”

The fund makes literal dollars and sense, as federal grants that require local matching money are often providing double, triple or more of what communities put up in matching federal dollars.

That’s likely why the proposal has broad bipartisan and bicameral support. Sponsors are Reps. Meredith A. Dixon (D-Bernalillo) and Gail Armstrong (R-Catron,Sierra, Soccoro and Valencia) and Sens. Pat Woods (R-Curry, Quay and Union) and Pete Campos (D-Colfax, Guadalupe, Harding, Mora, Quay, San Miguel and Taos).

The wide net of backers extended to the in-person and online audience members who spoke in favor of the Match Fund; there was not a single voice of opposition in the committee room or on the Zoom. Greater Albuquerque Chamber of Commerce Executive Vice President for Policy and Programs, D’Val Westphal, testified that “HB 177 is all about smart money, the creation of a $100 million matching fund for use by state, local and Indian agencies to secure federal funding for much needed projects – think repair of existing, and construction of new, roads and highways, bridges, water systems and other high-dollar, and high-priority infrastructure needs. Just last week the governor referenced the need for this fund in her State of the State address so that New Mexico doesn't leave any money on the table. Ensuring our villages, towns, cities, counties, water associations, pueblos and more have the required matching funds to leverage federal dollars is just smart money.”

Other supporters included groups as far ranging as the New Mexico Oil and Gas Association and the Sierra Club, the Farmington Economic Development Department and the Ogalala Land and Water Conservancy. From the New Mexico Municipal League pointing out this is a great way to leverage federal dollars, to Together for Brothers testifying that having a matching fund will make it easier for disadvantaged communities and those of color to apply, the hearing spotlighted what can be the best part about a representative democracy. As committee member Rep. Luis M. Terrazas (R-Catron, Grant and Hidalgo) said, the Match Fund is a proposal where folks from different parts of the state and different backgrounds can all work together to make a good idea not only better, but a reality.

Committee members drilled down into the details, such as how many state employees will be required to administer the fund (one to start) and how the Department of Finance and Administration (which will administer the program) will ensure one big urban project doesn’t eat up the fund in one bite (DFA plans to determine if grant caps, project thresholds, rural percentages of the total awarded or partial funding are most appropriate).

In the end, what carried the hearing was the goal of leveraging $100 million in state dollars for what one supporter characterized as billions in federal funding and the savings clean water, safe roads and better infrastructure bring. Here’s to not leaving any money on the table. On to House Appropriations and Finance!

Bill to Move Revenue to Road Funds Put in Idle

On Tuesday afternoon the Senate Tax, Business and Transportation Committee voted to hold over Senate Bill 65 as it aggregates its tax proposals. And in the meantime, a possible alternative with different allocations is in the works.

The bill, officially known as Motor Vehicle Tax Distributions, is sponsored by Sen. Ron Griggs (R- Doña Ana, Eddy and Otero). It would change how the tax is distributed; currently almost 60 percent goes into the general fund, with the rest divided between road and transportation project funds. Under Griggs’ proposal, 60 percent would go into the State Road Fund and 40 percent into the Transportation Project Fund.

Greater Albuquerque Chamber of Commerce President and CEO Terri Cole testified in support of SB 65, saying “it puts Motor Vehicle Tax payments where they belong: back into our roads and transportation projects. This bill would dedicate 100 percent of those monies to the State Road Fund and Transportation Project Fund. This change will ensure a recurring source of revenue to get, and keep, our roads and bridges in safe traveling shape.”

Cole made the point that “to date the Road and Transportation funds have relied on revenue from gasoline and diesel taxes, commercial trucking fees, and vehicle registration fees. These have not kept pace with the increase in costs to repair and build roads.”

She was joined by a representative from the New Mexico Municipal League, who said the change is much needed as “our roads are in bad shape. Everybody knows that.”

A major reason for that disrepair is that while the Legislature has appropriated nonrecurring monies from the general fund to repair and build roads, the skyrocketing cost of materials and construction means New Mexico has a backlog of projects, especially large projects, across the state.

The committee decided to hold onto the bill for a possible package as lawmakers work on getting other tax bills through the pipeline. And Griggs gave them a heads up another version with a different breakdown could be in the works, sending 75 percent to the Road Fund and 25 percent to the Transportation Project Fund. The New Mexico Department of Transportation is on record as favoring that breakdown.

Griggs testified he was not wedded to his 60-40 allocation, and he’s right to keep the focus where it belongs, on better funding our roads and bridges. Re-dedicating this tax will ensure a recurring source of revenue so our roads and bridges are safe for everyone driving in New Mexico.

Executive v. Legislative Budget Difference

Over the years, we've become accustomed to pretty minor differences between spending proposals by the governor and the Legislature. It's pretty much, ho-hum that'll all come out in the wash. And on the surface, one might conclude the same this year. After all, the governor's proposal is to spend $10.5 billion and the Legislature's is $10.1 billion (state agencies were seeking $10.9 billion). This year is different - very different - on a fundamental conceptual basis. To see why, we have to look down the road. Charles Sallee, the new director of the LFC, did that in a recent presentation. The top graphic shows the governor's proposed budget and its effects over future years. The bottom graphic shows the LFC's approach and its effects. Have a look.

The bottom line is very clear - in order to avoid a scenario where state revenues fall short of state spending, the rate of spending growth has to be slowed. That's the main point that the LFC is making. And why are its experts worried? Because the decline in oil and natural gas production is forecast to occur much sooner than was expected.

As we all know, direct and indirect oil and gas revenues fund around one half of state general fund revenue. To their credit, both the Legislature and the governor have done a good job in recent years of salting away a lot of the largess of the oil and gas revenue boom into various "permanent funds" or endowments for the future. With prudent investing by the State Investment Council, these funds are spinning off significant amounts of cash from investment growth that now flow to the general fund (mostly) and are available to replace the forecasted decline in revenue as production falls off. That's good and has been taken into account in the forecasted revenues displayed in the charts above.

But, without throttling down spending, future years could see significant budget cuts. For folks that have been around awhile, no one wants to see those bad old days when onerous budget cuts had to be made, leaving the state without the money needed to boost educational performance and provide for other much-needed services. 

Around the Roundhouse

Flamenco Sir, May I Have Another?

Students from Tierra Adentro in Northwest Albuquerque, a charter school dedicated to the arts, including music and dancing, started Monday with a Flamenco performance in the New Mexico Senate. 

Another group of performers from the National Institute of Flamenco and Conservatory of Flamenco Arts in Albuquerque also livened up the Senate floor with a follow-up performance. 

The performers from both groups were present to not only provide entertainment, but to honor a very special person, Eva Enciñias, a native New Mexican and a mover and shaker in the Flamenco world. Enciñias is a founding director of both Tierra Adentro as well as the National Institute of Flamenco. 

Movie Magic in New Mexico

Last Thursday, as the Senate was preparing to wrap up for the week, Sen. Jeff Steinborn (D-Doña Ana) announced that Movie Maker Magazine published its list of best big and small places in North America to live and work as a filmmaker -- and three locations in the Land of Enchantment made the list!

Santa Fe was ranked No. 1 small town in North America to make movies, with Las Cruces coming in at No. 8. Additionally, Albuquerque was ranked No. 2 on the big cities list, placing just behind Toronto, which must be music to the ears of GACC board member Nick Maniatis of Netflix. The city of Albuquerque’s website says the film industry in New Mexico now supports around 8,000 jobs across the state, and the median wage of a film worker is over $35 an hour.

Muppets Take the Roundhouse?

Well, at least one did. The Senate was sparing no expense on entertainment last week to kick off the day’s session. To assist Lieutenant Governor Howie Morales, Alax, the Muppet mascot of New Mexico Early Childhood Education and Care Department (ECECD), took his place next to Morales on the rostrum, and together they gaveled in the session. Also known as the Intergalactic Ambassador of Care, Alax was in attendance because Thursday was Early Childhood Day in New Mexico.

Alax, being quite keen on the uptake, recognized there were no “tiny humans” in the Senate Chamber to honor but wanted to thank the New Mexico Legislature for all the investments in childcare, home visits, early intervention and pre-K that are making such a huge impact around the state. Morales also noted New Mexico “is leading the nation in building the future in early childhood investments.” 

According to the ECECD website, “The New Mexico Early Childhood Education and Care Department (ECECD) announced season two of The Early Show with Alax, a playful, informative online series for New Mexico families with young children, on October 16, 2023.”

Happy Birthday, Smokey!

The iconic bear is celebrating his 80th birthday today, which was recognized in House Memorial 14, sponsored by Rep. Harlan Vincent (R-Lincoln and Otero), who represents Capitan and, as a former firefighter himself, can truly appreciate the good work of old Smokey. The real Smokey was injured in a forest fire, nursed back to health and spent his life in the national zoo in Washington, D.C. He rests in peace, however, in Capitan. Smokey's indelible phrase, "Only You Can Prevent Forest Fires" resonates with all of us through the decades, probably starting in grade school when we were introduced to Smokey.

Veteran Senator Laid to Rest

Funeral services were Monday in Las Cruces for Mary Jane Garcia (D-Doña Ana), a retired, 25-year veteran of the Senate. According to her obituary, “those who knew former Senator Garcia best will miss her kind and caring nature, her love for storytelling, the contagious warmth of her laughter, her insistence on calling friends and family members by their lifelong nicknames, and her knack for making someone feel like the most important person in a room full of people.” We know that's so true, having worked with Mary Jane for many years.

Chamber President and CEO Terri Cole shared that "she and I worked so closely. She was sensible, lovely and a powerful force."

Rest in Peace Mary Jane. For more on her amazing life, click here

Signing Off from Santa Fe

Tomorrow looks to be a real corker! At 8:30 in the morning, we begin with the House Health and Human Services Committee taking up the Paid Family and Medical Leave Act in the form of two very different approaches in HB 6 and HB 11. Chamber President and CEO Terri Cole will be on hand to oppose the former and support the latter (see yesterday's Legislative Roundup for a look at the differences in the two bills). We'll also be fighting against the seemingly never-ending attempts to lower the capital gains tax deduction. We happen to think that people who make and invest money ought to be encouraged - what a concept!

The Senate reconvenes at 11 a.m. tomorrow and the House at 11:30. Floor action at the moment is pretty much limited to presentation of congratulatory memorials, introduction of legislation and messages from the governor designating items that can be considered this session (the "Governor's Call"). The bill introduction deadline is January 31, a week from tomorrow, which will also mark the halfway point of the 30-day session. So far 400 bills have been introduced. Whew! Well, that's about it for today. We'll see you tomorrow when we bring you all the news and views from your state Capitol. Here's wishing you a very pleasant evening. 

The Legislative Roundup, published during the New Mexico Legislative Session by the Greater Albuquerque Chamber of Commerce, provides information on local and state public policy and business issues that affect you.

For questions, please email D'Val Westphal at dwestphal@greaterabq.com.