New Mexico In Depth 2016 Legislative Special Edition

NM IN

DEPTH

New Mexico In Depth

2016

LEGISLATIVE SPECIAL EDITION

ETHICS, CAMPAIGN FINANCE, TAXPAYER DOLLARS A LOOK AT NEW MEXICO STATE GOVERNMENT AND THE WAYS IN WHICH IT CAN BE IMPROVED

CAPITAL OUTLAY SPENDING

ETHICS AND LOBBYING

BUDGET AND TAXATION

CAMPAIGN FINANCE

Photo by Gwyneth Doland / Illustration by Jason V. Harper — New Mexico In Depth

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

New Mexico In Depth 2016 LEGISLATIVE SPECIAL EDITION • JAN. 12, 2016 Trip Jennings Executive director

Marjorie Childress Deputy director

Reporters

Layout and design

Photographers

Sponsorship solicitations

Gwyneth Doland Sandra Fish Laura Paskus Gwyneth Doland Sandra Fish Mark Holm Jett Loe

Jason V. Harper Peter St. Cyr

Sponsorship design Linda Lillow

Special thanks to our volunteer columnists: Javier Benavidez Susan Boe Paul Gessing Viki Harrison Melina Juárez Fred Nathan Gabriel R. Sanchez

New Mexico In Depth is dedicated to journalism in the public interest that tells in-depth stories of people who represent our diversity and examines systems and institutions in a way that informs and empowers people and communities.

This special edition is produced in conjunction with NMID’s media partners: Las Cruces Sun-News, Santa Fe New Mexican, Farmington Daily Times, Alamogordo Daily News, Carlsbad Current-Argus, Ruidoso News, Deming Headlight and Silver City Sun-News.

Contents INTRODUCTION...............................................................4 ARTICLES Capital outlay funding comes under scrutiny again........ 6 Scandals resurrect ethics commission concept................. 10 Quick look: Top public officials and corruption.............. 14 Model shows gaps in campaign finance oversight........ 15 Duran incident spotlights campaign finance rules.......... 17 State can improve budget clarity with technology....... 20 Reports shine light on NM’s tax code............................... 23 Is Rio Grande headed for ‘permanent drought’?.......... 26 COMMENTARY Ethics reform: Duran case may be the tipping point..... 28 Transparency is more than law, it’s an attitude.............. 30 How to fix public infrastructure funding.......................... 32 Getting the most bang for NM’s capital outlay buck... 34 Why New Mexico needs an ethics commission............... 35 Who really runs New Mexico?.......................................... 37

Co n s t i t u t i o n a l A m e n d m e n t fo r Early Childhood I n t h e r s t ve ye a r s o f l i fe 9 0 % o f t h e b ra i n d e ve l o p s, h owe ve r we o n l y i nve s t 2 . 1 % o f o u r s t ate b u d g e t i n t h e s e r s t c r u c i a l ye a r s.

C h i l d we l l - b e i n g i n N e w M ex i co h a s g o n e f ro m 4 4 t h i n 2 0 1 0 to 5 0 t h i n 2 0 1 3 a n d n ow, i n 2 0 1 6 , re s t s at 4 9 t h .

O u r c h i l d re n a re i n d i re s t ra i t s.

M e a nw h i l e, t h e L a n d G ra nt Pe r m a n e nt S c h o o l Fu n d h a s grow n to $ 1 5 b i l l i o n . J o i n t h e m ove m e nt to i nve s t 1 . 5 % i n e a r l y c h i l d h o o d e d u c at i o n !

“ The test of the moralit y of a societ y is what it does for its children.”

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

INTRODUCTION

Join us again in this important conversation Dear Readers,

that responsibility, the public needs to know how govern2015 continued the affliction ment works. New Mexico state of public corruption New Mexgovernment does a poor job icans have grown used to over of sharing the relevant inforthe last decade, with Sec. of mation to aid the public in this State Dianna Duran and Sen. Trip Jennings vitally important endeavor. It Phil Griego making headlines. was no surprise then when in With scandals, wrongdoing November New Mexico scored often focuses on individuals, and appro- only 61, a letter grade of D-, in the 2015 priately so. But garnering less scrutiny State Integrity Investigation, a 50-state are the systems — by which I mean analysis of accountability, ethics and laws, regulations and often institutional transparency in government, released culture — that enable these individuals across the country by the Center for to operate freely.

Public Integrity.

Think of how New Mexico public ofIn these pages we reference CPI’s ficials, especially the state’s Legislature, report numerous times to help us exhave opposed strengthening the state’s amine how New Mexico can improve ethics and campaign finance regulations public trust through strengthened laws despite perennial calls by New Mexiand regulations — as well as beefed-up cans, the media and good government enforcement. advocates following scandal after scanHere is a summary of what you’ll see dal. in these pages.

It is with these thoughts in mind that We spotlight the capital outlay system New Mexico In Depth presents this and secrecy surrounding how lawmakspecial edition: It is one part peeking ers pay for certain projects throughout behind the curtain at the campaign New Mexico. Outside groups have finance, ethics and regulatory systems called the system unusual and one in which candidates and elected ofscholar has gone so far as to describe it ficials operate; one part roadmap for as an “illustration about how not to do improving these systems; and one part a capital improvement planning.” In a nod demand for more openness in the basic to the main business of this year’s 30functions of government — budgeting, day session we explore how other states the state tax code and funding of capital make the budget-making process more outlay projects across New Mexico. understandable to the public. We also At a deep, profound level, one of the shine a light on the state’s tax code, with great innovations of democracy is that an eye toward improving public underit invests the public with the authority standing of an often arcane subject. to oversee its elected leaders. To fulfill We explore the lack of urgency among

most of the state’s public officials, particularly New Mexico state lawmakers, to restore the public’s trust given the serial corruption New Mexicans have witnessed over the last decade.

We also wonder what can be done to protect the political power of citizens against corruption and the oversized influence of big money. For possible solutions, we look to Massachusetts, the state to score highest in campaign finance transparency in CPI’s report. We also point out how little information the public is given concerning lobbyists and why that hinders the public in carrying out its democratic duty: overseeing their elected representatives.

We’ve also given several New Mexicans space to write about their expectations for the 2016 legislative session.

It is our sincere hope that this publication helps New Mexicans participate more effectively in the 2016 legislative session. We think of it as a contribution to the conversation increasingly occurring across the United States about what democracy looks like in the 21st Century.

Thank you in advance for reading it and joining us in this important conversation. You can find New Mexico In Depth at nmindepth.com, where we’ll be actively covering the legislative session for the People, Power and Democracy project. For webcasting of legislative hearings and floor debates from the Roundhouse, go to nmlegis.gov. The link for webcasting is on the right side of the Legislature’s webpage.

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Pulling back the curtain on state government.

Our innovative, multi-media journalism collaboration will focus on good governance issues during the 2016 New Mexico Legislative Session. https://medium.com/@newmexicoppdÂ

New Mexico In Depth is dedicated to insightful reporting on public policy and good government issues that matter to New Mexicans. www.nmindepth.com NEW MEXICO IN FOCUS takes a multi-layered look at social, political, economic, health, education and arts issues and explores them in-depth, with a critical eye to give them context beyond the “news of the moment.�

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Digging for dollars Jett Loe – Las Cruces Sun-News

Ground is cleared in Santa Teresa for a new water treatment plant to be operated by the Camino Real Regional Utility Authority.

CRRUA has received about $6 million in funding from the Legislature since 2011 for southern Doña Ana County water and wastewater projects.

Capital outlay funding comes under scrutiny again

By SANDRA FISH New Mexico In Depth Dennis Roch and Bill Rehm are Republican lawmakers in the New Mexico state House. They represent the same number of people and receive equal dollar amounts for brick-and-mortar projects. In 2015, it was $600,000.

The similarities mostly end there.

The district Roch, a Logan school superintendent, represents stretches from Raton east to the Texas border and south to part of Portales. Funding requests from public

schools, cities and seven counties can top $20 million a year.

“I’ve got 20-some municipalities with city halls and water systems and fire and police vehicles and trash trucks and sanitation equipment,” Roch said. He adds the counties in his district regularly ask for money for roads, water, assisted living and senior centers.

A retired police officer, Rehm’s district in northeast Albuquerque is a fraction of the size of his Republican colleague’s.

He has used money to pay to filter arsenic out of the Tierra Monte

water system and to build the Paseo Del Norte intersection in Albuquerque. But he also has directed money to pay for little league fields — a luxury in a rural district like Roch’s.

“There’s so many needs and so little money to go around, all across the state,” Rehm said. “I could spend $200 million in my district tomorrow.”

Perhaps because of their experiences representing different districts, the two men disagree on whether New Mexico needs to reform how it pays for such projects — an issue state lawmakers may try

to tackle when the 2016 legislative session begins Tuesday in Santa Fe. Outside groups have called the current system unusual, and one scholar has gone so far as to describe it as an “illustration about how not to do capital improvement planning.”

New Mexico provides ample evidence for such a view: Hundreds of millions of dollars sit idle for projects that were funded — in some cases, partially funded — but not shovel ready due, in part, to lack of Continued on 7 ➤

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION Continued from 6 ➤ state oversight.

Meanwhile, the system is shrouded in secrecy: neither the public nor the media can access what projects each lawmaker allocates money for year in, year out without first getting permission from the lawmakers themselves.

Roch supports change and paying for projects the way New Mexico funds public school requests in which an appointed council ranks projects.

“Let’s focus our dollars on the highest needs first,” he said.

Rehm, however, worries how his district might be represented under such a program.

“If we went to a statewide type of system, someone else would make a decision on my district,” he said. “I should make the decision on how to spend money in my district, as long as it’s lawful, as long as it follows guidelines.”

The question of how to pay for projects across the state coincides with heightened scrutiny after the 2015 legislative session disintegrated in a dispute over not only what infrastructure projects to fund but how to pay for them.

At the heart of the dispute is the tradition of allowing lawmakers to allocate a significant portion of the available money to projects of their choosing. New Mexico is the only state in the nation that employs such a system.

Think New Mexico and its Executive Director Fred Nathan, which are leading a campaign to change the system, say it’s time to create an appointed commission that would rank state and local projects, with the Legislature and governor allowed to reject projects but not add new ones.

Continued on 8 ➤

PERCENTAGE OF UNSPENT CAPITAL OUTLAY MONEY, 2012-2014

BY COUNTY / FOR PROJECTS OF $300,000 TO LESS THAN $1 MILLION Hidalgo De Baca Harding Colfax San Juan Lea Rio Arriba Union Mora Taos McKinley Cibola Los Alamos Doña Ana San Miguel Grant Valencia Eddy Guadalupe Curry Santa Fe Lincoln Torrance Sandoval Quay Roosevelt Bernalillo Chaves Otero Sierra Luna Catron Socorro

100% 100% 100% 99.4% 96.3% 95.8% 95.8% 94.7% 94.3% 90.9% 90.8% 89.4% 89.3% 87.4% 86.4% 85.5% 85.4% 85.2% 85% 84.6% 83.2% 80.7% 78.3% 77.1% 75.1% 74.3% 74.1% 72% 71.3% 65.7% 61.5% 52% 50.6%

Source: Legislative Finance Committee staff

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

“Urgent projects are being passed over for projects that are not necessary and hundreds of millions of dollars is sitting idle on the sidelines because projects haven’t been properly vetted and are not shovel ready,” Nathan wrote in an email to New Mexico in Depth.

Unused capacity A year ago, New Mexico In Depth began examining the current system and found that the processes the state uses to identify needs met many standards set forth in a report from the National Association of State Budget Officers. But the way state lawmakers divvy up money for projects is unusual.

While many priority projects identified by the executive and leg-

“

The question we often ask is, ‘Is it shovel ready?’, and they assure me it is. Then you find out they haven’t bought the shovel yet.

“

Continued from 7 ➤

— LFC Chairman Sen. John Arthur Smith, D-Deming, on capital outlay project delays

islative branch are funded, a significant amount of capital outlay cash – $100 million in 2014 and $84 million in 2015 – is divided among individual lawmakers.

Following the meltdown in the final days of the 2015 legislative session, NMID created a searchable database of more than 2,800 projects funded from 2010 through 2014.

Among the weaknesses NMID and

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media partners identified by analyzing the progress of the projects, or the lack of it, is that oversight to ensure the dollars are spent efficiently appears to be lacking after New Mexico authorizes money.

At least half the money allocated over five years has yet to be spent.

Some projects will never get off the ground, others require more money after millions in investment.

A few months later, in late October, state lawmakers on the Legislative Finance Committee, which oversees budget planning including capital outlay, learned that $1 billion in the entire infrastructure bonding system remained unspent. That figure included funding designated for water projects, tribal infrastructure and other areas.

One-fourth of the unspent money came from lawmakers who had allocated money for local projects that weren’t shovel ready when proposed or weren’t making progress for other reasons.

Lawmakers who support the current system argue that dividing capital outlay money equally between the House and the Senate, then evenly among lawmakers in each body produces an equitable system. For example, in 2015 every member of the state House received $600,000 and every state senator got $1 million.

But an analysis of newly funded projects for the five years from 2010 to 2014 by New Mexico In Depth re-

vealed a disparity in how much the state’s counties receive in per-person funding.

What’s next?

Since releasing a lengthy report on the history of the capital outlay system and its reform recommendations in October, Nathan and his staff have worked to build a coalition to support reform, both within the Legislature and outside interest groups.

Members of the influential Legislative Finance Committee have discussed the problems surrounding capital outlay funding at some of their fall meetings, including the amount of money that sits idle while projects that are funded are delayed, or never start.

“The question we often ask is, ‘Is it shovel ready?’, and they assure me it is,” LFC Chairman Sen. John Arthur Smith, D-Deming, said this fall. “Then you find out they haven’t bought the shovel yet.”

With so many projects idled, Smith said, “there’s tremendous pressure from the contractors to put more money into the pipeline.”

Nathan also noted the distrust between the executive branch and the Legislature on how to fund infrastructure that led to the meltdown in the final days of the 2015 regular session.

Think New Mexico hopes to bridge that mistrust.

“We thought we might be able to put forth a merit based reform bill that would generate thousands of more jobs and bring all sides together,” Nathan wrote.

While some lawmakers, such as Rehm, may not be on board with the reform efforts, Roch is.

“I think we’re long overdue in using a similar system (to public education) for capital outlay – all capital outlay.” n

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Scandals raise profile of an unpopular idea among lawmakers: an ethics commission

By MARJORIE CHILDRESS New Mexico In Depth “If not now, when?” asked Viki Harrison of the good government group Common Cause. “If this isn’t the time to get serious, when is it?”

Harrison was noticeably frustrated. Secretary of State Dianna Duran had just resigned and pleaded guilty to several criminal counts, including two felonies, for using campaign donations to feed a gambling addiction.

Months earlier Sen. Peter Wirth, D-Santa Fe, and Rep. Zack Cook, R-Ruidoso, had sponsored a constitutional amendment to put the question of an ethics commission before voters. But, despite New Mexico’s dubious distinction as one of only eight states without a panel, the 2015 proposal suffered the same fate as others over the years.

“That never got a hearing,” she said. “It’s not been a priority for people. We’re asking people in power to voluntarily give some of it up.

That’s a tough sell.”

Noting New Mexico’s decreasing voter turnout, Harrison, a longtime lobbyist, attributed the trend in part to people’s distrust of public officials.

“They’re losing faith in government,” she said. “They’re registered, they’re not coming to the polls. If people aren’t voting they have no skin in the game.”

Harrison’s frustration late last year came at the end of a benchmark 12 months for corruption in

New Mexico. In March, New Mexicans watched a powerful state senator—Phil Griego—resign in the middle of the legislative session for allegedly using his elective office for personal gain. Five months later, the state’s Attorney General accused Duran of violating the very laws she was tasked with enforcing.

The cases are the latest in a decade-long series of similar high-profile scandals that have included two former state treasurers

and a former high-powered legislative leader going to federal prison for corruption. Other officials have resigned in disgrace. With so many scandals, it’s not surprising that a January 2015 poll by Research & Polling, Inc. for Common Cause found that 61% of New Mexicans strongly support the creation of an independent state ethics commission, with another 25% somewhat supportive. And that was before the cases of Griego and Duran became

public.

In November a national investigative news organization, the Center for Public Integrity (CPI), found that New Mexico ranks 45th nationally in state ethics in general and last in enforcement of existing public integrity laws.

Despite the scandals, findings and polls, the state Senate has repeatedly stonewalled calls for an indepenContinued on 11 ➤

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

dent state ethics commission.

Even if lawmakers don’t favor the idea of a state ethics commission, the Legislature as a body seems disinterested in grappling with the underlying problem — a series of public officials who flout rules for their own personal gain — in an effective way.

The enforcement gap The Center for Public Integrity’s 2015 State Integrity Investigation found that New Mexico has the highest “enforcement gap” of any state in the nation. The organization arrived at this conclusion by juxtaposing laws on the books with how things work in practice. CPI scored states on a range of issues, such as campaign finance laws, lobbying disclosure, executive and legislative

“

(Voters are) losing faith in government. They’re registered, they’re not coming to the polls. If people aren’t voting they have no skin in the game.

— Viki Harrison, Common Cause New Mexico

accountability, ethics enforcement, among others.

When CPI compared the average in scores for the two categories, it found that New Mexico had the widest gulf, an average of 17.8 percent across all of the categories.

In other words, New Mexico does a poor job enforcing or adhering to the spirit of laws on the books meant to ensure public integrity.

Currently, authority to enforce and educate state employees and of-

“

Continued from 10 ➤

ficials about ethics rules is dispersed within various state agencies, and the enforcement gap illustrates a lack of systematic checks and balances.

A proposal to create an independent state ethics commission focused on the executive and legislative branches first gained prominence in 2006, almost a year after then-state Treasurer Robert Vigil resigned to avoid facing possible impeachment by the New Mexico

11 House of Representatives.

A state task force recommended its creation. Subsequent ethics committee legislation passed the state House of Representatives four times, but has withered in the state senate.

Wirth, a long-time sponsor of good government bills in the State Senate, says a key benefit of an independent ethics commission would be its educational function.

“If we are going to reduce ethical violations, we have to increase education about existing laws, rules and regulations,” he told NMID in an email. “One of the things about an ethics commission I have always championed, is that it would be a body that could answer potential ethical questions on the front end.”

Continued on 12 ➤

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Recent cases are the latest in a decade-long series of high-profile scandals that have included two former state treasurers and a former high-powered legislative leader going to federal prison for corruption.

Other officials have resigned in disgrace.

With so many scandals, it’s not surprising that a January 2015 poll by Research & Polling, Inc. for Common Cause found that 61 percent of New Mexicans strongly support the creation of an independent state ethics commission, with another 25 percent somewhat supportive.

Photo by Mark Holm / Illustration by Jason V. Harper — New Mexico In Depth

Continued from 11 ➤ Setting up an effective commission While the vast majority of states have ethics commissions, many of them are ineffective because they’re not fully funded, lack subpoena power, or aren’t independent from the political apparatus within their state. In fact, a key finding of the 2015 State Public Integrity Project is that “most ethics entities are toothless and underfunded.”

Wirth said several questions need to be resolved before an independent ethics commission gets traction at the state Legislature, including the need for sufficient funding; the question of jurisdictional oversight; the makeup and size, along with who appoints the positions; and satisfactory due process provisions to guard against “politically motivated witch hunts.”

That an ethics commission could be used to damage state officials politically seems to be a real sticking point, Harrison acknowledged.

“We live in a hyper partisan world today, it’s even worse than it was when we started advocating years ago,” she said. “You talk to the public, they don’t care. But we have a lot of really good legislators, we want to make sure we don’t ruin people’s reputations.”

For that reason, Harrison said, protecting appointed and elected officials from false, partisan attacks is of utmost importance when constructing a commission. One easy way to do that, she said, is to ensure that the complaints are thoroughly

vetted and investigated, and that nothing moves forward in the process, including making complaints public, until that happens.

Another big issue is cost.

“One of the concerns is that it’s going to cost money that we don’t have,” said Harrison. “In the past it’s been floated that it would cost in the range of $700,000-$1 million.

But in just the one scandal we have with Dianna Duran, they appropriate a quarter million to start an inContinued on 13 ➤

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

vestigation of one person.”

Harrison is correct. Legislators allocated $250,000 for impeachment proceedings and spent slightly more than $17,000 on legal fees, mileage and other expenses before Duran resigned. But it wasn’t the first time state legislators were willing to spend large sums in response to a public scandal. The Legislature set aside a total of $1.6 million to pay for impeachment investigations in 2005 against then-State Treasurer Robert Vigil and in 2011 against then-Public Regulation Commissioner Jerome Block Jr., according to the Legislative Council Service (LCS).

The Legislature has spent nearly a quarter of a million dollars over the

“

We live in a hyper partisan world today, it’s even worse than it was when we started advocating years ago. ... We have a lot of really good legislators, we want to make sure we don’t ruin people’s reputations.

— Viki Harrison, New Mexico Common Cause

last decade on all three cases, including Duran’s expenses, $22,600 on Block Jr. and $203,000 on Vigil.

The amounts for Block Jr. and Vigil don’t include per diem and mileage expenses.

The state’s top officials appeared

“

Continued from 12 ➤

reluctant to talk about ethics with New Mexico In Depth. Senate Majority Leader Michael Sanchez, House Majority Leader Nate Gentry, Speaker of the House Don Tripp, and Governor Susana Martinez did not agree to interviews for

this article despite phone call requests. It remains to be seen if state lawmakers will treat the topic of ethics with seriousness during the 2016 legislative session.

The state’s top prosecutor agrees with Harrison about the need for an independent ethics commission.

“An ethics commission is long overdue,” Attorney General Hector Balderas said. “However, it must be fully funded, be independent, and have real authority in order to be effective.

“I strongly support a proposal to add a constitutional amendment to allow the citizens of the state, those people most affected by ethical breaches, to express their views at the ballot box to mobilize the political will to move forward.” n

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

TOP PUBLIC OFFICIALS AND CORRUPTION 2005 State Treasurer Michael Montoya pleaded guilty to extortion.

2006 State Treasurer Robert Vigil, Montoya’s successor, was convicted on one count of attempted extortion.

2008 Former Senate Pro Tem Manny Aragon pleaded guilty to fraud and conspiracy charges for his role in defrauding the state out of nearly $4.4 million

2008 Deputy State Insurance Superintendent Joe Ruiz was convicted by a federal jury of multiple counts of mail and wire fraud, corrupt solicitation, and extortion.

2009 Gov. Bill Richardson withdrew his name from consideration as President Obama’s Commerce Secretary due to a federal corruption investigation.

2009 Former three-term Secretary of State Rebecca Vigil-Giron was indicted

CPI ASSESSMENT OF SYSTEMS IN PLACE TO DETER CORRUPTION IN NEW MEXICO STATE GOVERNEMNT

identity theft, embezzlement and fraudulent use of a credit card and election fraud charges.

Public access to information

GRADE F

(49)

RANK 19th

Political financing

GRADE F

(48)

RANK 36th

Electoral oversight

GRADE D-(60) RANK 33rd

Executive accountability

GRADE F

(53)

RANK 41st

Legislative accountability

GRADE F

(57)

RANK 39th

Judicial accountability

GRADE C-(73) RANK 3rd

Budget processes

GRADE C

(74)

RANK 27th

2015

Civil service management

GRADE D

(65)

RANK 14th

Procurement

GRADE D

(64)

RANK 38th

Internal auditing

GRADE B-(83) RANK 17th

Lobbying disclosure

GRADE F

(51)

RANK 43rd

Ethics enforcement agencies

GRADE F

(41)

RANK 45th

Sen. Phil Griego resigned from the State Senate after an ethics complaint was filed against him because he shepherded (and voted for) the sale of state property in Santa Fe, and subsequently took a $50,000 broker’s commission from the purchaser.

Pension fund management

GRADE C-(71) RANK 17th

Source: New Mexico’s scorecard, 2015 State Integrity Investigation, Center for Public Integrity

along with three others on dozens of counts, including money laundering and embezzlement for alleged misuse of federal funds meant for a voter education campaign. The case against Vigil-Giron was later dropped because it dragged on for too long, but the three others

were convicted and received federal prison sentences.

2011 Public Regulation Commissioner Jerome Block Jr. pleaded guilty to

2013 Vincent “Smiley” Gallegos, former head of the Region 3 Housing Authority, pleaded no contest to four misdemeanors, after being indicted in 2009 on fraud, embezzlement and conspiracy related to bond funds for housing projects.

2015 Secretary of State Dianna Duran resigned and pleaded guilty to six criminal counts, including two felony embezzlement charges, for using campaign donations to fund her gambling addiction. Duran, who as Sec. of State was the top campaign finance official in the state, was sentenced to 30 days in jail.

NMID WILL BE COVERING THE 2016 LEGISLATIVE SESSION Find our complete coverage online at

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

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Massachusetts model shows vast gaps in NM’s campaign finance oversight

By GWYNETH DOLAND

score highest in campaign finance transparency in CPI’s report.

New Mexico In Depth If your goal is to protect the political power of citizens against corIn August came news that Dian- ruption and the oversized influence na Duran, New Mexico’s secretary of big money, then these are some of state and in charge of overseeing of the ways it can be done. campaign finance compliance, had taken money from her campaign account, spent it at local casinos NM’s high contribution and falsified her own reports to limits make it easy to hide it. Two months later she pleadinfluence elections ed guilty to six criminal charges, including two felony counts of emIn New Mexico, a small state with bezzlement. a large media market, it doesn’t take Weeks after her guilty plea, a report comparing campaign finance much cash to buy television ads laws and compliance across all 50 that reach an audience spread over states revealed what many of us in nearly the whole state. Yet we have New Mexico already knew: Our relatively high contribution limits state seriously lags when it comes compared to bigger states where it to monitoring and controlling the costs much more to reach the same flow of money into the political number of voters.

Individuals, corporations, lobbysystem. According to the Center for Public Integrity’s 2015 State In- ists and political action committegrity Report, New Mexico ranked tees (PACs) can give up to $10,800 36th, flunking campaign finance to candidates for statewide office between the primary and general transparency.

Those who shrug their shoulders elections. Massachusetts, by comand say, “Oh yes, things are terrible, parison, keeps a tighter watch on but what can we do?” might have issue advocates seeking to influence government. a look at Massachusetts, the state to

Illustration by Jason V. Harper — New Mexico In Depth

Massachusetts limits individual donations to $1,000 per year to a candidate or political committee, $500 to a PAC and $5,000 to a state or local party committee. Corporations are banned from giving money to individual candidates or to parties, and they can be fined up to $50,000 for doing so. Lobbyists can give only $200 to a candidate or PAC. The state limits PACs to giving $500 per year to a candidate, and $5,000 to parties. And there’s a limit on how much candidates can accept from all PACs; a state House candidate could only take $7,500, no matter how many different PACs donated.

of special interest groups and industries. Feeble oversight of campaign finance reporting in New Mexico, however, weakens even that meager requirement. These details are often filled out wrong or left blank.

Open data helps the public see where the money goes Massachusetts uses technology to make it easy for the public to see how money flows in and out of the political system. Its online database allows users to search by name, employer, occupation or ZIP code; the results of a search—or the entire database—can be exported into spreadsheet or database formats.

The website also makes it easy for Lack of disclosure leaves the public to understand trends NM voters in the dark in the data with data visualization Because contribution limits ap- tools that turn the numbers into ply separately to individuals and charts and graphs. corporations, in New Mexico comNew Mexico’s database allows panies are able to pump more mon- only limited downloads, limiting ey into elections if the business the public’s ability to make sense of owners, executives and employees the data. also give individually.

But tracking that money isn’t easy. Outside groups operate with In addition to its lower contribu- freedom and in secrecy in NM tion limits, Massachusetts requires In the run-up to an election, votdonors who give a total of $200 or ers are subjected to a barrage of more to list an occupation and the political messages advertised on name of their employer. television, on the radio, online and New Mexico state law through the mail. In New Mexico it only requires donors who can be very hard for citizens to figgive more than $250 to ure out who’s paying for these mesdisclose their occu- sages and what stake they have in pation, making the election. it hard to track the influence Continued on 16 ➤

16 Continued from 15 ➤ That’s because New Mexico’s campaign finance laws are antiquated.

Yet reform bills that would clarify the law, particularly in defining what constitutes “coordination” between a candidate and independent groups, and create disclosure rules, continually flounder at the state Legislature.

Massachusetts requires that any group making a political ad buy disclose its donors within seven days.

A group has to disclose its donors within 24 hours if the ad airs less than ten days before an election.

And Massachusetts’ definition of coordination is three pages long.

Lack of auditing leaves an open door to malfeasance In 2014, former state Rep. Sandra

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION Jeff, D-Crownpoint, filed campaign finance reports that left out information about $26,000 in donations.

The information was only revealed after her Democratic challenger filed an ethics complaint.

Political opponents are often the only ones who look that closely at campaign finance reports since state law only requires the secretary of state’s office to audit 10 percent of the forms. And that auditing usually happens after the election is over.

In Massachusetts, a staff of seven, including four auditors, closely review all campaign finance reports within a month of when they’re filed.

But even New Mexico’s sliver of oversight is feeble. An investigation

by The Farmington Daily Times showed that although the secretary of state’s office frequently levied

fines under former Secretary Dianna Duran, the majority of them went unpaid without consequence.

Duran’s office collected only 4 percent of the fines imposed in recent elections and waived about onethird of all the fines.

Duran, like secretaries of state before her, said that her office was focused on securing “voluntary compliance” with campaign finance laws.

Mass. campaign finance watchdog has teeth—and isn’t afraid to bite An Office of Campaign and Political Finance has the authority to regulate and oversee campaign finance, including the power to subpoena witnesses and documents related to an investigation.

The Office can order remedial

training on campaign finance law or assess fines up to $5,000; particularly egregious or repeat offenders can be referred to the state Ethics Commission or the Attorney General’s office.

In New Mexico, where candidates routinely file reports with incomplete data, file their reports late or don’t file at all, it seems hard to imagine that in Massachusetts, a candidate for state representative who didn’t keep proper records and took some donations over the limit paid $20,000 in fines.

In just the past few years, Massachusetts Office of Campaign and Political Finance has collected tens of thousands of dollars in penalties from candidates found to have kept improper records and illegally solicited donations. n

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17

NM’s loose rules thwart hunt for connections

Duran incident spotlights campaign finance rules

By SANDRA FISH New Mexico In Depth

The indictment in August against then-Secretary of State Dianna Duran gave New Mexicans the ultimate example of why campaign finance rules, and vigorous enforcement of them, matter.

In late October Duran pleaded guilty to six of 65 counts, including two felony embezzlement charges, and last month a state judge sentenced her to 30 days in jail.

It’s unclear if stronger campaign finance rules would have caught Duran earlier. They potentially might have if, under her direction, the Secretary of State’s office audited more campaign finance reports as required by law. But the audits are limited, and cross-checking donations is difficult.

Or perhaps a whistleblower could have reported to an independent ethics commission, if New Mexico state lawmakers had not repeatedly killed the idea year after year.

What is clear following Duran’s downfall is that New Mexico’s laws and regulations are lax and don’t do much to shine a light on how business is done in Santa Fe. During 2015, New Mexico In Depth tried to follow the money flowing among lobbyists, special interests and lawmakers. We discovered: Lobbyists spent more than $1.6

Sandra Fish — New Mexico In Depth

Teddy bears from the New Mexico Primary Care Association adorned the desks of House members during the 2015 legislative session. Lobbyists for the organization distribute the bears annually. million on wining, dining and gifting for state lawmakers from 2011 through 2014. Businesses and organizations spent another $379,000 during that time frame.

Payday lenders gave nearly $140,000 in campaign contributions in the 2013-14 election cycle.

Their lobbyists also spent heavily to entertain lawmakers. And a bill to regulate the industry failed.

Labor unions spent nearly $2.8 million in the 2013-14 cycle. Virtually all the money went to Democratic campaigns, which may have been a motivating factor behind unsuccessful anti-union legislation pushed by Republicans in 2015. But oil and gas and other business interests fueled $1.8 million to GOP political action committees.

Lobbyists and other organiza-

tions spent more than half a million dollars on food, drinks and gifts for lawmakers during the 60-day legislative session in 2015.

Lobbyists steered $1.8 million to campaigns and political action committees from 2013 to 2015, helping Republicans win the state House for the first time in 60 years.

Continued on 18 ➤

18 Continued from 17 ➤ Public agencies paid lobbyists $7.2 million in 2014 and 2015 to lobby state and federal government.

What we didn’t find: The real story and underlying connections beyond all those numbers.

Unlike Colorado and other states, New Mexico doesn’t require lobbyists or their employers to disclose compensation or make public detailed spending on individual public officials.

Lobbyists don’t have to report what pieces of legislation, let alone issues, they push for during a regular session, either.

In other words, lack of disclosure rules in New Mexico makes it difficult to understand relationships between people, such as lawmakers, lobbyists and their employers; and relationships between timing and

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Unlike Colorado and other states, New Mexico doesn’t require lobbyists or their employers to disclose compensation or make public detailed spending on individual public officials. Lobbyists don’t have to report what pieces of legislation, let alone issues, they push for during a regular session, either. people’s legislative actions.

In December, the Secretary of State’s office published new lobbyist and campaign disclosure rules as a response to two legislative leaders citing ‘serious shortcomings’ in the lobbyist reporting system.

Some lawmakers want more sunlight than that, even though the majority of their colleagues don’t.

A bill requiring lobbyists and their employers to disclose what lobbyists were paid and what bills they

were working on was gutted during the 2015 legislative session before state lawmakers passed it.

Some lawmakers hope to try again for reform this session.

Those measures won’t be considered unless Republican Gov. Susana Martinez adds campaign finance, lobbying and ethics reform to the 30-day session’s agenda. The shorter, election-year session is typically limited to fiscal policy unless a governor adds issues for lawmakers to

consider.

“We won’t know until the first day of the session, probably,” said Viki Harrison, executive director of Common Cause.

Common Cause and some lawmakers hope to see a few measures considered that apply to lobbyists.

They include: • Addressing the lobbying “revolving door” for lawmakers.

Banning lawmakers from lobbying for a certain number of years has been proposed – and gone nowhere – in the past.

• Greater disclosure for lobbyists. Requiring lobbyists and their employers to disclose what lobbyists are being paid and what issues and bills they’re working on is a measure that failed in the 2015 sesContinued on 19 ➤

19

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION Continued from 18 ➤ sion. Some lawmakers and Common Cause of New Mexico hope to see the proposal return — and pass the Legislature.

• Campaign contribution disclosure. There’s also a call for lobbyists to be more specific about reporting campaign contributions. Often, checks to candidates are written by a lobbyist’s clients. But not all lobbyists report who the checks come from, as New Mexico In Depth reported last fall. KOB-TV also point-

ed out the discrepancies that result from poor lobbyist disclosure of contributions.

In November lobbyist J.D. Bullington could be seen in the Roundhouse sorting through checks in his briefcase and handing one to Rep. Jimmie C. Hall, R-Albuquerque.

Bullington said the check was from a client and would be disclosed in January. But he doesn’t always list what client wrote the checks.

• Limiting donations from lobbyists to candidates. Bullington told New Mexico in Depth last year

that he’d like to see lobbyists banned from using their own money to contribute to candidates. Harrison of Common Cause said she doesn’t think lobbyists should be delivering checks from clients, either. She said businesses should give directly to the candidates without a middleman.

• Regular audits of reports filed by campaigns and lobbyists. The Secretary of State’s office now audits a limited number of campaign finance reports and apparently does no cross checking of campaign con-

tributions reported by lobbyists with those reported by candidates.

The Daily Times in Farmington reported last year (2015) that the Secretary of State’s office did little to enforce campaign finance law and didn’t force many violators to pay their fines.

Rep. Jeff Steinborn, D-Las Cruces, said he’ll reintroduce some of his lobbying reforms this year, in the hopes that the governor agrees to consider them.

“It’s just so important that we know the full picture.” n

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Visualizations, apps and open data State can improve on making budget understandable

By GWYNETH DOLAND New Mexico In Depth Welcome to State Budgeting 101.

Class starts Tuesday, when 112 state lawmakers convene in Santa Fe to approve a multi-billion dollar spending plan Gov. Susana Martinez can live with before the session ends Feb. 18.

That sounds challenging, but the Martinez administration and the Legislative Finance Committee, the Legislature’s budget arm, already have tilled the ground by drafting competing multi-billion-dollar spending plans. Those documents will act as guides for the New Mexico Legislature over the next 30 days as officials work toward a compromise.

New Mexico is a rarity. It is one of the few states in which the governor and the Legislature produce budget plans. The shared budget making helped New Mexico’s accountability grade in a November report from the Center for Public Integrity (CPI) (Disclosure: I was the reporter who compiled New Mexico’s data for CPI).

But the report also showed flaws. For example, our system gives an unusual amount of power to a small group of insiders.

New Mexicans don’t have access to enough information about the budget New Mexico earned a letter grade of “C” in the CPI report for how accountable, transparent and responsive to the public our budget process is, mostly because the executive

New Mexico earned a letter grade of “C” in a Center for Public Integrity report for how accountable, transparent and responsive to the public the state’s budget process is. branch doesn’t make it easy for the public to ensure the state’s checkbook is balanced.

That’s a problem because lawmakers run the risk of building a budget based on the wrong numbers.

For example, the executive branch compiles what’s known as a Comprehensive Annual Financial Report (CAFR) every year, but it has been consistently late—and there are no monthly or quarterly reports that indicate the state’s checkbook balances in the meantime. In fact, the independent auditor that examined New Mexico’s 2014 CAFR said it couldn’t determine whether it was accurate or not due to a lack of information. At least $100 million was unaccounted for.

As State Auditor Tim Keller told the Santa Fe Reporter: “You’ve got your checkbook and the amount you have in the bank. For the state of New Mexico, those don’t match.” A national budget watchdog group said the state had serious accountability problems in its budget reporting.

would help, transparency advocates say.

David Abbey, the director of the Legislative Finance Committee, says he’s proud of the committee’s website.

“We have a raft of information in our documents explaining state finances,” he says. But Abbey admits, “These reports are, in some cases, 100 pages and it can be hard to find that information.”

That’s because the information is posted exclusively in PDF documents. That format makes it hard to dig through the pile looking for a specific issue and very hard to find trends or make comparisons.

Good-government groups have been pushing hard to make the data accessible so the public can take that raw information and make sense of it.

“Nationwide there’s a real trend in putting out budget information that’s in a downloadable, searchable and sortable format so people can play with it themselves and figure out where our money’s going or where it should be going,” says Susan Boe, Technology increases executive director of the New Mexico citizen engagement Foundation for Open Government.

Some cities have taken advantage of New Mexico does put a fair amount of budget information online, but 21st century technology to put their making the data more accessible budget information online for citi-

zens to interact with. Yes, the state budget is big and complicated, making such interactivity challenging, but at least one state has done the same thing, too Utah has an open-data website that helps citizens understand the budget process and allows them to look at spending and revenue using an “Interactive Budget Visualizer.” Colored bubbles distinguish sources of revenue (federal funds, the general fund, the education fund) and where the money goes (public education, infrastructure, social services). Clicking on the “public education” bubble activates three other bubbles showing that money to pay for it comes mostly from the Education Fund, with a smaller amount of federal funds.

Utah’s budget transparency earned it a rare “A” grade in the CPI report.

In Colorado, where any new taxes must be approved by the voters, a nonpartisan civic-engagement group created an app called “A Balancing Act” that lets people build their own budget and share their priorities with state lawmakers. A companion app, “Taxpayer Receipt,” allows them to see what their taxes paid for last year.

“If Coloradoans are going to have the transportation, schools and healthcare that they want then there has to be a fairly high level of budget literacy among them,” says Chris Adams, president of Engaged Public, the group that created the apps. “So we thought it was very important for them to have a working knowledge of Continued on 21 ➤

21

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

HOW ANOTHER STATE APROACHES BUDGET ACCESSIBILITY Utah State Legislature

2015 General Session

FY 2016 Budget, All Sources of Finance by Fund Category and Subcommittee

$14,242,921,400 100.00%

Where does it come from?

Choose a bubble to filter the results:

Other $1,337,232,900 9.39%

Dedicated Credits $1,315,399,700

Executive Offices & Crim. Just.

Higher Education $1,698,895,900 11.93%

Natural Res., Ag.

Capital Project

Education Fund $3,684,941,200 25.87%

Federal Funds $3,777,321,900 26.52%

Where does it go?

Choose a bubble to filter the results:

Restricted Funds

Public Education $4,292,502,800 30.14%

Social Services $4,723,119,100 33.16%

Infrastructure and Gen. Gov $1,730,488,200 12.15%

General Fund $2,372,733,000 16.66%

Click on a committee to filter the results: Social Services

Public Education

Infrastructure and Gen.

Higher Education

Executive Offices & Cri.

Natural Res., Ag. and E. Business, Eco. Dev. La.

Executive Appropriations

Retirement and Ind. Ent.

Source: Utah State Legislature

Utah has an open-data website that helps citizens understand the budget process and allows them to look at spending with an “Interactive Budget Visualizer,” shown above. Utah’s budget transparency earned it a rare “A” grade in a recent report by the Center for Public Integrity. at University of New Mexico who worked in the state treasurer’s office. the budget.”

He also was a deputy chief of staff in He says it only takes most people Gov. Bill Richardson’s administration. about ten minutes of looking at A “Why are we doing all of this faceBalancing Act’s colorful pie charts to to-face? We should use the web more form an opinion and type out some and allow people to phone in or Skype guidance to their elected officials.

Virtual public hearings could also in to give their input,” Perlman says. help increase participation in the proBudget as moral document cess, says Bruce Perlman. Perlman is a professor of public administration Compared to other states, New Continued from 20 ➤

Mexico’s state lawmakers are remarkably accessible to the public. During the session they’re easy to find and approach in the capitol, before or after floor sessions and committee meetings. So it can be very easy to find your lawmaker and get a little face time.

The problem is that most folks don’t tune in to the budget process at all until it’s the topic of news coverage when the session starts, and by then

the budget proposals have already been drafted, the thick lines have been drawn and only minor details tend to change. The budget bill starts in the House of Representatives. Lawmakers there hold hearings and eventually pass it, sending it to the state Senate, where the powerful Finance Committee has exerted great influence in recent years.

Continued on 22 ➤

22

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Continued from 21 ➤

“

It reflects our values and what we prioritize, in terms of spending, but also of revenue, how we collect taxes and who we collect them from.

“

“The really important committees are the Legislative Finance Committee and the Legislative Education Study Committee… and they have meetings all year long but people don’t tend to go,” Perlman says.

“That’s because people aren’t interested in the finance of the state generally,” he says. They’re interested in arts programming at their son’s school, a crumbling bridge they drive under every day or a tax break for putting in a solar energy system.

But people should care, says Ruth Hoffman, the executive director of Lutheran Advocacy Ministry, a group that advocates for reducing poverty, homelessness and hunger.

The way you choose to spend money says a lot about you. That’s true for a state, too, she says.

The state budget is a moral docu-

— Ruth Hoffman, executive director, Lutheran Advocacy Ministry, on the state budget as a moral document

ment that reflects us as a community, Hoffman says. “It reflects our values and what we prioritize, in terms of spending, but also of revenue, how we collect taxes and who we collect them from.”

Voters tend to choose candidates who share their values in broad terms. But after they’re in office, New Mexicans should be able to continue exerting influence on elected officials and the choices they make on the fin-

er points.

“It’s a good thing that we’re one of the few states where both the executive and the legislative branches compose a budget because that means there are two ways to have input before the session begins,” Hoffman says Experts easily navigate a system citizens call opaque The route to influence is much

more easily followed by those who are hired to do it. Lobbyists (some of whom are former lawmakers) have the expertise and relationships to focus their energy on the specific people and issues they’re paid to track.

Unlike Colorado and other states, New Mexico doesn’t require lobbyists or their employers to disclose compensation. Nor do lobbyists have to tell the public what legislation or issues they are following.

“Yes, some people have it a little easier because they have connections,” says Bill Allen, president of the Greater Las Cruces Chamber of Commerce, “but with a little sleuthing you can stay informed.”

“We always get an open door from Santa Fe,” he adds. “They make sure we have the chance to talk to them about what’s important down here in Southern New Mexico, and I’m appreciative of that.” n

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

23

Reports shine light on NM tax code

By TRIP JENNINGS New Mexico In Depth In the final hour of the 2013 session, a bill that shifted the tax burden from corporations to New Mexico’s cities and counties passed both chambers of the Legislature.

Despite many lawmakers’ not knowing many of the details, they voted on the bill with little to no debate, provoking an angry response from a cross-section of New Mexicans once the news of how it passed got out.

It was a rare moment for tax policy. Except for that massive tax bill, taxes usually are the quiet kid in the corner during the short budget-making session every two years, with small incremental changes in the tax code slipping through from time to time.

But the tax side of the equation deserves more of a public focus, some people say.

Shining a light on tax policy isn’t easy. Due to their complicated subject matter, debates over taxes can seem impenetrable, often dampening public interest and making it difficult to determine whether the tax code is fair. Add the historic lack of information that is shared publicly about the tax code itself, and debates usually go one of two ways: they turn into snoozers; or become fact-free zones.

Only recently has New Mexico begun to change that, with an annual publication of a list of tax breaks called a tax expenditure report.

Major gaps in public information still exist, such as a detailed anal-

Mark Holm — ­ New Mexico In Depth

The New Mexico Legislature examines budget and tax issues throughout the year, but the meetings are usually sparsely attended, with lobbyists, representatives of state agencies and those in the know rounding out the audience. ysis of the state’s personal income tax, which the Taxation and Revenue Department made public until 2006, when it stopped. But the documents have improved with each new year, according to two experts New Mexico In Depth interviewed.

The importance of tax code Unlike a state budget, the importance of the tax code can be missed if it is thought of only in terms of its revenue-generating function.

Buried within its pages are tax breaks in the form of exemptions,

deductions and credits – so-called tax expenditures — that decrease the revenue a state takes in. Some people and companies are favored with tax breaks while others aren’t.

Because many of those breaks don’t come with “sunset” provisions, they are rarely reviewed, causing some economists and analysts to call the tax expenditures a “hidden budget”.

How much of a hidden budget is an open question.

In 2011, some lawmakers and public officials estimated there were more than $1 billion in credits, exemptions and deductions in the

state tax code. However, a spokesman for the New Mexico Taxation and Revenue Department in December questioned whether assessing the total value of tax expenditures is even possible.

“Many of the expenditures are estimated” and “taxpayers are not mandated, by statute, to report all types of deductions,” Benjamin Cloutier wrote New Mexico In Depth via e-mail.

Until recently, the public wasn’t privy to this arcane conversation.

Continued on 24 ➤

24 Continued from 23 ➤

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

“

That’s because, unlike all but a ... It’s astonishing and incredible they no longer handful of U.S. states, New Mexico didn’t produce a tax-expenditure produce any data on the income tax. They used report. to put out a 2 to 3 page analysis.

That changed in late 2013 when New Mexico produced its first one.

— Gerry Bradley, senior researcher and policy analyst, New Mexico The state followed up with a second Voices for Children, on the NM Taxation and Revenue Department report in 2015.

Last year, State Auditor Tim Keller announced the creation of a Government Accountability Office, which he said would assess the ex“It’s good to have that expendi- resurrect the practice of producing penditures’ return on investment, ture report, but it’s astonishing and a publicly available analysis of the but the office has yet to complete a incredible they no longer produce state personal income tax in 2016. report. any data on the income tax,” Bradley said of the state’s tax agency.

Ideal tax structures juggle Making tax analysis “They used to put out a 2 to 3 page competing interests publicly accessible analysis.”

In an ideal world, a state’s tax Since 2006 the state tax agency policies strike a balance between Both Richard Anklam and Gerry Bradley agree the state’s reports hasn’t made its analysis public de- sometimes-competing principles; need improvement but they’re get- spite possessing all the data. for example, how tax burdens are Anklam, who worked as the tax distributed among taxpayers – ting better. The first tax expenditure report was only 87 pages; the sec- agency’s policy director in 2003 fairness — with a tax system that and 2004, said the person who did seeks to protect, or spur, economic ond, 259.

Bradley is a senior researcher and the analysis retired and was never growth — efficiency. policy analyst at New Mexico Voic- replaced.

Mix in policy makers’ desire to “That means any public debate use tax policy decisions to drive ceres for Children. Anklam heads up the New Mexico Tax Research In- over the fairness or unfairness of tain social behavior. For instance, the state income tax is fact-free,” think of states that raise taxes on stitute.

“It gets better every year. The first Bradley said. “The only people who cigarettes. Officials believe higher one was really incomplete,” Bradley can have an informed position are taxes, and the increased costs that people at the Tax department.” said. come with it, will discourage a cer“I completely agree with Gerry,” tain number of people from buying Still, Bradley sees a major hole in the New Mexico’s efforts to make Anklam said. cartons of cigarettes. Fewer smokCloutier said the agency plans to tax analysis publicly available.

www.newenergyeconomy.org 505.989.7262

“

PNM: New Mexicans prefer clean energy

ers might save money in government health care costs in the long term, the thinking goes.

Add all this together, and you’ve got a complicated mixture of competing goals and interests that policymakers attempt to balance in discerning the state’s ideal tax structure.

Tax expenditures are employed to arrive at that ideal structure. A state also can use them to identify taxpayers in need of assistance or to encourage social or economic behavior.

But defining ‘ideal’ - or baseline as Anklam calls it — in New Mexico is difficult. That’s because New Mexico relies on a gross receipts tax (GRT) – it is the state’s largest revenue generator – rather than a sales tax. The GRT is a hybrid that captures retail transactions like a sales tax but imposes a levy on business services, too.

“We don’t know what our tax is,” Anklam said, referring to the confusion policy makers sometimes feel working with a tax levy that functions as several types of taxes, all at once.

That explains in part the fuzziness that comes with determining the value of certain deductions, he said.

Continued on 25 ➤

“Creating Policy Change for a Better New Mexico”

Erin Muffoletto Baca Erin@NMlobbying.com | www.nmlobbying.com | 505.353.2362

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION Continued from 24 ➤ New Mexico’s funky tax structure hasn’t stopped state lawmakers from trying to create a tax expenditure budget over the years. The Legislature passed a bill in 2007, but Gov. Bill Richardson vetoed it.

Gov. Susana Martinez vetoed a similar bill in 2011, but issued an executive order later that year ordering the creation of a public accounting of the state’s tax breaks.

Reading through the documents one can discern some of the choices New Mexico makes, either to reward behavior or to help various groups.

New Mexico exempts active military personnel who live here from paying the state’s personal income tax, a decision that reduced New Mexico’s revenue by more than $11 million in fiscal 2013.

Elsewhere you read that New Mexico law allows companies that extract coal to exempt a certain amount of revenue from taxation once the companies reach specific thresholds. The state is worried about the coal industry, analysts say.

In fiscal year 2013, companies saved more than $27 million in taxes, up from $11.3 million four years earlier, according to the 2014 tax expenditure report.

The tax expenditure provokes questions, too, such as is New Mexico’s annual back-to-school tax-free weekend every August losing popularity?

The amount of taxes shoppers have avoided by purchasing clothes and certain goods during that weekend dropped to $3.4 million in fiscal 2013, down from $4.1 million in 2009. n

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We urge the 2016 New Mexico State Legislature to tackle our state’s desperate poverty, dismal child wellbeing, highest in the nation income inequality, and vast racial / gender inequities, with the urgency that the good people of New Mexico deserve. The gamechanging opportunities to realize a bright future for future generations are within our grasp.

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Is the Rio Grande headed for ‘permanent drought’?

By LAURA PASKUS New Mexico In Depth In a paper, “Western water and climate change,” authors studied four major river basins—the Colorado River, the Rio Grande, the Klamath River and California’s Bay-Delta system—and looked at how each will be affected by climate change.

Of the four, they found that the Rio Grande Basin (which includes the river itself and its tributaries) faces the greatest challenges.

In fact, they cite the Rio Grande as the best example of how continued declines in water flow due to climate change might sink a major river system into “permanent drought.”

That’s in part because all of the river’s waters are already appropriated—or, in use by someone. That means there’s little wriggle-room in the system to deal with shrinking supplies or new demands. And as the climate warms and less surface water is available, those waters—“currently being disputed and wrangled”—will be less and less available in the coming decades.

Authored by Michael Dettinger (US Geological Survey, Scripps Institution of Oceanography), Bradley Udall (Colorado State University’s Colorado Water Institute) and Aris Georgakakos (Georgia Institute of Technology’s Georgia Water Resources Institute), the paper appeared in Ecological Applications, a peer-reviewed journal from the Ecological Society of America.

Among the key points they make about the West in general: •Most of the region has warmed by about 1.5 degrees Celsius com-

pared to the historical norms from 1901-1960 • The frost-free season has lengthened by 15 to 20 percent, a trend that’s expected to continue, with a 60 to 70 percent increase in many mountain areas • While precipitation is more difficult to predict than temperatures, annual average precipitation totals will increase in northern states and decrease in the south, especially in the Southwest. Those changes are projected to be small—but “both wet and dry extremes are projected to increase substantially and almost everywhere.”

•“Very heavy” precipitation events will increase • Dry spells will lengthen in most regions • Snowpack and snow-fed systems will continue changing (By the way, issues related to snowpack and runoff should be increasingly familiar to NMID readers. We wrote last year about how difficult it is to make accurate streamflow forecasts and about how decreasing snowfall and rainfall will put many water supplies, including those in New Mexico, at risk.)

The authors explain that changes in snowfall and its runoff into streams and rivers will affect people—even in places where the annual volume of flows might not change.

That’s because of how we use and allocate water.

In New Mexico, water rights are mind-bogglingly complicated. But the simplified version goes something like this: Water in streams and rivers belongs to the public and it’s held in trust by the state. The state

grants water rights (which are basically private property rights) to farmers, cities or businesses who prove they can put the water to “beneficial use.” The system was set up in the early 20th century, even before statehood.

Many farmers hold older, more senior water rights, while cities often possess junior rights. The pueblos in the Middle Rio Grande have the oldest and most senior water rights—and the amount of water they actually “own” has never been quantified.

In fact, the entire Middle Rio Grande remains unadjudicated: the state has never officially determined the extent and ownership of water rights in the river.

Currently, the state says it lacks the funding to complete adjudication in the Middle Rio Grande or to incorporate climate projections into the ongoing rewrite of the state’s Water Plan.

But understanding water rights are just as important as understanding climate projections.

Writing in general about the western basins they studied, Dettinger, Udall and Georgakakos write: Higher flows in the early spring will favor what have been junior and infrequently used storage rights, and senior rights may find less flow on the descending limb of the hydrograph through the summer and fall. In fact, some of the diversions thought in the 20th century to have reliable senior water rights may be without water during the hottest and driest periods of summer.

They also point out that “environmental water” will be in short supply during the driest periods of the

summer..

In some western states, including Oregon and Colorado, rivers have “instream water rights.” A certain amount of water must legally flow through them—not for delivery to downstream users, but to support the river itself and its fish, wildlife and riparian vegetation.

That’s not the case in New Mexico, where rivers lack rights to their own waters.

When possible, water managers will try to keep stretches of the Middle Rio Grande wet for rare species, such as the Silvery Minnow, that are protected under the federal Endangered Species Act. But nearly every year since 1996, stretches have typically dried sometime between June and late October, when farmers are diverting water from the river for irrigation season. And in southern New Mexico, the Rio Grande stands dry for up to nine months of the year.

The paper isn’t all gloom and doom, however. The authors do have some good news. Sort of.

The challenges and decisions western water managers are facing are not necessarily new.

They write: “The West has already grappled with most of the problems that will face it in the future, however inadequately in some cases and however transformed some will be by larger trends in the future.”

So, what needs to happen?

The task now confronting westerners, they write, is to address those problems that have been acknowledged but not resolved — and to “prepare for the changes that will surely come.”

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

At the Precipice: New Mexico's Changing Climate

New Mexico is at the cutting edge of change— climate change Climate change is an issue that New Mexicans need to better understand. That’s in large part because it isn’t just an environmental issue. The warming climate affects the economy, public health, traditional cultures, education, hunting and recreation, infrastructure, demographics, wildlife, and even how resources may be allocated to cities and rural areas. It will change where we build our homes, when we plant our gardens, and how we construct our public buildings.

That's why New Mexico In Depth is going to sort through the science and the policy in the coming year and try to figure out what is—and what is not—happening on the ground right here in New Mexico.

Environmental reporter Laura Paskus will be interviewing scientists and natural resource managers, business owners and environmentalists, city planners, farmers and ranchers, elders and young people, from all over the state. Together, we’ll learn what’s happening, on the ground, across the entire state—not just in Albuquerque or Santa Fe.

Find this special series, and join the conversation, on New Mexico in Depth's website:

nmindepth.com

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

COMMENTARY

Ethics reform: Duran case may be the tipping point

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t was a long fall in this time Common Cause majority are hard working, honest New Mexico last found that 86% favored people, tarnished by the misdeeds year. In August, the an independent ethics of a few. But with repeated scanstate was stunned by a commission. We are con- dals, plea bargains, and haphazard 64-count criminal comfident there is now even enforcement of campaign finance plaint against Secretary more public support. laws, the public needs reassurance. of State Dianna Duran, This session Common A strong ethics commission Viki Harrison Cause New Mexico is its chief elections and would: ethics officer, based on supporting a joint reso• Provide education, guidance her transfer of campaign lution to put the question and training for public officials contributions to private bank acon the ballot as a constitutional • Serve as a deterrent for unethicounts, to be used at local casinos. amendment. If approved by the cal practices in both state and local By the end of October, just as the voters, the Legislature would shape governments House was to start impeachment the framework of the commission • Allow for consistent interpretahearings, Duran pled guilty to six during the following session. Over tion of laws and standards, perhaps counts including two felonies relat- the past decade the Legislature has leading to the promulgation of an ed to embezzlement. considered no fewer than 50 bills ethics code with clear definitions Problems with almost 40 other to create an ethics commission – of conflict of interest and guides campaign finance reports, which some good and some too weak to for officials, lobbyists and governhad not been audited for years, merit our support. What’s difment contractors on gifts, contricame to light as well, causing some ferent this year is the proposal to butions and proper filing of reports to wonder if the entire system was make an ethics commission part of • Increase the chances of fair and a facade. Several prominent PACs the New Mexico Constitution and impartial enforcement of standards and political parties were fined; give the voters a chance to weigh in of conduct for those entrusted with legislators and others amended on the issue. public power their campaign reports to comply In today’s climate of eroded pub• Protect whistleblowers who with the law. lic confidence and declining voter bring corruption to light, thus enEven for a state that has had its participation, we believe that givcouraging the reporting of wrongfair share of scandals – involving ing the voters a voice is important doing secretaries of state, treasurers, pub- in and of itself. It’s one way to disNew Mexico is one of only eight lic regulation commissioners, and pel the misconception that elected states that do not have an ethics legislators – it was a bumper crop. officials believe themselves to be commission. Yes, we know New For several years now, Comabove the law, and only care about Mexico is different. But our unique mon Cause New Mexico has been accountability at election time. state government – with a “plural” advocating for a non-partisan We know that all public offiexecutive consisting of multiple inindependent body that would draw cials are not corrupt and the vast dependently elected offices —state bright lines for elected officials by defining what is unethical and illegal before it gets to the front-page Even for a state that has had its fair share of headline stage. scandals – involving secretaries of state, treasurers, Now is the time to do it. Even before this fall’s firestorm, polling public regulation commissioners, and legislators – data showed that eight in ten NM (last fall) was a bumper crop. voters believed corruption in our state was a problem. Last year at

treasurer, state auditor, attorney general and governor – has become a confusing patchwork of different practices. Local governments have their own ethics codes, their own charters. And our constitution created a unique “citizens” Legislature where elected officials keep their day jobs, have little staff, and meet for short periods of time.

The system is almost tailor made to create conflicts of interest and divided loyalties. It sets few clear boundaries between the personal and the political.

Most of the time, to ensure accountability, we have relied on transparency, the media or the honor system. Transparency has taken us far. A web-based, campaign finance reporting system has been key in bringing the current situation in the Secretary of State’s office to light. And the media has done its job.

But now, it’s time for an ethics commission. Let the people speak.

If not now, when?

Viki Harrison is executive director of Common Cause New Mexico, the state affiliate of Common Cause, which for decades has been dedicated to upholding the core values of American democracy; working to create open, honest, and accountable government that serves the public interest; promoting equal rights, opportunity, and representation for all; and empowering all people to make their voices heard as equals in the political process. The views in this column are the author’s alone and do not reflect the views or opinions of New Mexico In Depth.

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

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“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”  First Amendment to the US Constitution

Proud to sponsor the New Mexico In Depth Legislative Guide to inform New Mexico citizens about issues facing the State and the upcoming legislative session.

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

COMMENTARY

Transparency is more than law, it’s an attitude

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few months ago I tice of transparency of took a vacation to which we can be proud.

Budapest, Hungary.

Of course, we don’t lock I couldn’t wait to get inside out the public when our the beautiful Hungarian lawmakers meet. There’s Parliament Building which no problem gaining towers above the Danube admittance to our Susan Boe River, as prominently feastunning Roundhouse, tured in river cruise ads. including when the Budapest seems to have Legislature is in session. recovered well following the fall of Committee meetings as well as the Iron Curtain. During my visit meetings of the House and Senate to the Torture Museum, I learned are open to the public and memabout the atrocities committed in bers of the press.

Hungary during the grim decades Yet, we still suspect that deals of the Nazi and communist reare being cut behind closed doors. gimes. The Hungarians now speak Is that true? Or are laws being proudly of the “Velvet Revolution,” made under the watchful eyes of which 25 years ago ushered in a the public? Is secrecy the rule, new era of freedom and openness. rather than the exception? Do we With such a history, I assumed have a curtain that needs to be that Hungary would be embracing drawn back? democracy and transparency with All public bodies in New Mexico a vengeance. Imagine my surprise are subject to the Open Meetings when we learned that a visit inside Act (OMA). As in other states, the halls of Parliament would not laws requiring public business be be possible because, as the tour conducted in public are created guide explained without apology, by statute. OMA was enacted by Parliament was meeting that week. our lawmakers a number of years I wanted to storm the doors and ago, and to its credit, the Legislainsist upon being admitted. Secre- ture made itself subject to OMA, cy dies hard, and the legacy of that albeit with a number of carve-outs Iron Curtain lives on. and exceptions. As the Legislature As we enter another legislative giveth, so can it take away, which session here in New Mexico, it is it did. important we commit to a pracFor example unlike cities, coun-

ties and school boards, notices of legislative meetings need not include agendas 72 hours in advance of the meetings. Exceptions that apply exclusively to the Legislature include matters relating to personnel, matters adjudicatory in nature, investigative or quasi-judicial proceedings relating to ethics and conduct, and caucus meetings of a political party.

Further, if the House and Senate can agree upon a joint rule, meetings of any committee or policymaking body can be closed to the public. Secrecy dies hard here at home, too.

In a time of growing mistrust of our public officials, transparency is more important than ever. Sunlight still is the best offense in maintaining a democratic society and the best defense against the breeding of corruption. That is why the New Mexico Foundation for Open Government (FOG) is dedicated to protecting the public’s right to know and promoting government transparency to ensure a meaningful democracy.

During the last session, the Legislature succeeded in not only keeping hearings open, the House even started the meetings on time and according to the posted agenda.

Questions remain, though, with our lawmaking process. What factors determine whether a proposed bill will be scheduled for hearing?

Why does a bill with a “do pass” recommendation from all committees sit for days on a chamber’s agenda without coming up for a vote? Why can’t proponents of a bill be told upfront that a “bill isn’t going anywhere” when that decision has been made in a political caucus? Why doesn’t a bill pass to require the archiving of House and Senate sessions?

Transparency is more than following the letter of the Open Meetings law. It is an attitude. It is being unafraid of shining a light on public business, even when it is uncomfortable or unpopular. It is flinging wide the doors to our legislative chambers. And finally, it is fighting secrecy so that the curtain never closes on our democracy.

Susan Boe is Executive Director of the New Mexico Foundation for Open Government, a nonprofit, nonpartisan organization which since 1990 has educated, advocated and litigated for transparency in government. The views in this column are the author’s alone and do not reflect the views or opinions of New Mexico In Depth.

NMID WILL BE COVERING THE 2016 LEGISLATIVE SESSION Find our complete coverage online at

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

“I’m here today thanks to my doctors and nurses at UNM Children’s Hospital.”

— Ethan L. cancer patient

When Ethan was just 18 months old he came to UNM Children’s Hospital, where we found he had a tumor the size of a baseball.

So began his multi-year treatment by our team of pediatric cancer experts. They are trained to focus on the unique needs of children — because every child we see deserves special treatment. Learn more about Ethan’s story at UNMHSLifeStories.org.

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

COMMENTARY

How to fix public infrastructure funding — and create good jobs

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ew Mexico’s probased on a political forto use, every $100 million would cess of funding mula, rather than based create 2,700 good jobs in a state public infrastrucon merit. In the 2015 starved for private sector jobs. ture is completely brospecial session, each Third, large urgent priorities ken. Governing magazine House member received tend to be neglected. Senate Fihas called our system $600,000 while each Sen- nance Chair John Arthur Smith, a “unique” and repeatedly ator received $1 million critic of the current system, recentranked it as the second ly noted that the state has a backFred Nathan to spend on infrastrucworst in the nation. Miture projects in their sole log of billions of dollars for large chael Pagano, a national discretion. capital projects like the forensics expert on state capital budgeting, Unfortunately, there are many laboratory of the Department of has said that New Mexico’s system serious problems with the ChristPublic Safety which “is in danger “would be the illustration about mas Tree Bill. First, the projects of losing its accreditation because how not to do capital improvement that get funded do not always of the state of its physical plant.” planning.” match what is needed by the pubInstead, dollars too often flow Many inside the system agree. lic. KRQE reporter Larry Barker, to smaller items like silverware, State Senator Pete Campos, for ex- for instance, reported about a dog- football helmets, sculpture gardens, ample, has written that our current gie drinking fountain in a park in and band uniforms. system is “archaic, parochial, and Las Cruces paid for by the ChristFinally, unlike the state budget, highly political.” mas Tree Bill. Meanwhile, many which is developed through multiThis issue should be of great New Mexicans lack access to clean ple public hearings held over many interest to every New Mexican who drinking water. weeks, the Christmas Tree Bill is turns on a faucet in their home, Second, the projects included in put together with little to no transdrives on state roads or uses a state the bill receive little planning and parency. Lawmakers do not have to vetting, so their cost is often undisclose which projects they were building, like a university classderestimated. This has resulted in responsible for including in the bill. room. The most recent infrastrucmajor projects like courthouses and New Mexico In Depth has asked ture report card from the Amerdams being delayed for years or individual lawmakers to voluntarily ican Society of Civil Engineers never completed due to insufficient reveal the projects they have authogives New Mexico poor grades in funds—while the dollars that have rized since they are paid for with categories ranging from drinking been allocated to them sit idle. In public dollars, but as of this writing water to roads and bridges.

June, the Legislature’s budget staff only a few have done so.

New Mexico’s system for fundcalculated that $311.6 million of Clearly, New Mexico needs a ing public infrastructure began in the $496.5 million appropriated for transparent, merit-based system of 1977. That year, two days before 1,337 projects from the 2011-2014 infrastructure funding. the legislative session concluded, The good news is that the state the Legislature merged 27 different Christmas Tree Bills has not yet been spent. If that money was put has an excellent model of how this bills seeking money for individual capital projects into a single massive bill. They called it the “Christmas Tree Bill” because it contained New Mexico In Depth has asked individual lawmakers a present in it for nearly every to voluntarily reveal the projects they have authorized lawmaker.

Not surprisingly, the bill passed since they are paid for with public dollars, but as of unanimously. It has since become this writing only a few have done so. an annual tradition. Each year the bill continues to divide up money

can be done: the Public School Capital Outlay Act, which our Legislature wisely enacted a dozen years ago to address the poor condition of the state’s school buildings.

Under this law, a committee of legislators and cabinet secretaries oversees an independent council, which uses objective criteria to rank needed repairs and new school buildings across the state.

Then those projects are funded in priority order. Since it went into effect, the Public School Capital Outlay Act has reduced the average percentage of each school building in need of repair from 71% to 35%.

During the 2016 session, Think New Mexico will be advocating for legislation to create a similar framework to fund the rest of the state’s essential infrastructure. As with the Public School Capital Outlay Act, we envision an oversight body of legislators supervising a council of experts that would use objective criteria to prioritize projects.

Reforming New Mexico’s public infrastructure funding system will create new jobs, strengthen the economy, and meet the needs of current and future generations.

Nathan is Executive Director of Think New Mexico, a results-oriented think tank whose mission is to improve the quality of life for all New Mexicans, especially those who lack a strong voice in the political process. The views in this column are the author’s alone and do not reflect the views or opinions of New Mexico In Depth.

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

COMMENTARY

Getting the most bang for New Mexico’s capital outlay buck

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uring the 2016 taxpayers must spend on legislative session, capital projects. legislation will After Ohio repealed its likely be considered to “prevailing wage” law just reform New Mexico’s brofor school construction, that ken capital outlay process. state’s Legislative Service This is welcome news and Commission (LSC) found Paul J. Gessing that taxpayers saved $487.9 we applaud Think New Mexico for taking up this million, an overall savings of issue. In fact, we heartily 10.7 percent. If New Mexico endorse their reforms so much so were to do the same, we’d likely get that we have argued in support of 10 percent more/better school buildending the “pork barrel” aspects of ings and similar if not more roads the process as recently as the 2015 and bridges. special legislative session.

If the New Mexico Legislature is If New Mexicans are really going serious about improving the entire to get the most “bang” for their inprocess of capital outlay, elimination frastructure spending bucks, simply of the State’s prevailing wage law is reforming the process is part, but not a must. But there is more to capital all of the issue. A recent state Suoutlay than just getting the most for preme Court decision will further in- our money. crease the cost of public projects like A lot is made of the report card school construction and road repair. put out by the American Society of Already, New Mexico’s “prevailing Civil Engineers which gives the US wage” law forces taxpayers to pay and nearly all states poor rankings above-market wages for labor. Now, for infrastructure condition. There due to the Court’s decision, that would seem to be obvious self-interrate will be raised by as much as 35 est in more infrastructure spending percent for future projects. Allowing from an interest group that would politics as opposed to markets to be among the largest beneficiaries of determine wage rates has real, negsuch spending. ative impacts in terms of how much The Reason Foundation, in the “Ethics should mean what [former PRC] Commissioner Jason Marks has publicly and vocally advocated for… accountability through as much disclosure as possible.”

—Albuquerque Journal, 4/4/2010

BUSINESS LAW ■ CIVIL LITIGATION ■ REGULATORY PROCEEDINGS ■ REAL ESTATE

2014 version of its annual highway report ranked New Mexico’s highways 7th-best in terms of condition and cost-effectiveness. Governing magazine studied bridge deficiency from state to state and found that 7.8 percent of New Mexico’s bridges were deficient. That places us middle-of-the-road in the nation although somewhat worse than our neighbors (save Oklahoma which suffers from 22.6 percent of its bridges being deficient). Only Pennsylvania suffered from worse bridge deficiency than the Sooner State.

Certainly, there are problematic areas of our state when it comes to infrastructure, but at least one national report ranks New Mexico relatively well. This is not to say that we can’t or shouldn’t get more for our capital outlay money, but it should give policymakers pause before they feel the need to spend more money on the “infrastructure crisis.”

Getting the most from our transportation spending dollar could help New Mexico avoid raising taxes on gasoline. In 2015 a proposal by Senate Finance Committee Chairman John Arthur Smith would have increased the state’s gas tax by 10

cents per-gallon while tying future increases to inflation. Smith’s plan, if passed, would have represented a 59 percent increase in New Mexico’s gas tax (from 17 to 27 cents per-gallon).

All tax hikes shift resources from the private sector to the public sector.

In doing this, taxes harm the private sector economy.

Common-sense reforms including a better system of prioritizing capital outlay spending that removes at least some of the politics is a great start.

But ending New Mexico’s “prevailing wage” law would really put our infrastructure spending into the 21st Century. It is time for the Legislature to act on both measures.

Gessing is president of New Mexico’s Rio Grande Foundation, an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility. The views in this column are the author’s alone and do not reflect the views or opinions of New Mexico In Depth.

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

COMMENTARY

Why New Mexico needs an ethics commission

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ew Mexico is and fraud, former Public facing a period Regulation Commissionof dangerously er Jerome Block Jr. being low levels of civic engageconvicted of fraud, embezment among our state’s zlement, and elections-law population. The recently violations, and several Gabriel R. concluded City Council other state offices, it would Sanchez and election in Albuquerque be nearly impossible for the Melina Juárez average New Mexican to be is a case in point with only 28,846 ballots cast unaware of this issue. out of the city’s 350,072 registered More recently, the public has been voters. This amazingly low turnout saturated with news coverage regardrate had not been seen since 1974. ing the resignation, conviction and This follows similarly low turnouts for ultimately the incarceration of former the 2013 mayoral race and a school Secretary of State Dianna Duran for board election that resulted in just 3 embezzlement and money launderpercent of eligible voters turning out. ing. This is particularly troubling, as Political science literature points this is the third secretary of state in a to several factors associated with row who has been accused of wrongdecreased civic engagement levels, doing while holding this important including income, competitiveness of office. elections, and mobilization, among It is not surprising that the Center others. However, an often-overlooked for Public Integrity gave New Mexico element influencing engagement is a D- in their 2015 grades of states. trust in government, an especially These grades are based on a number relevant dynamic for New Mexico of factors, including the state’s lack of these days. Research in the social an independent ethics commission sciences has suggested that those and less than rigorous campaign with lower levels of trust in local and finance policies. state governments are less likely to When we look at polling data be politically engaged, and at least across several surveys conducted over one recent study finds that there is a the past few years it is clear that many relationship between convictions of New Mexicans currently lack faith in corrupt elected officials and distrust our elected officials. New Mexicans’ in government.[1] opinions on the state Legislature are Given the increasing number of especially disapproving. high profile corruption cases over the • 64% of New Mexicans believe last decade, including the arrest and state elected officials are more responconviction of former top state Senate sive to lobbyists than to voters (only leader Manny Aragon for conspiracy 19% say they are more responsive to

voters)[2] • January 2014: 43% disapproval of the NM Legislature (30% approved) [3] • March 2014: 51% disapproval of the NM Legislature[4] Based on the high number of corruption convictions over recent years and the constant allegations of corruption in multiple offices, can you blame the public for not approving of the job their elected bodies are doing?

Seemingly widespread corruption together with low-voter turnout in recent elections, and high disapproval ratings for our state’s government do not paint a pretty picture. This begs the question: what can be done to reverse these trends and begin building more public confidence in our elected officials? Greater confidence will lead to increased civic engagement among the public. Thus, we believe that the answer lies in the creation of an ethics commission here in New Mexico.

This is not a new concept, as all but 8 states (including New Mexico) across the nation already have an ethics commission to provide accountability for elected officials in their states. In fact, there are 9 states that have more than one commission![5] We believe that our state desperately needs a well-funded, independent, and highly staffed commission to oversee ethics. Public opinion data suggest that we are not alone on this point, with 86% of New Mexican voters indicating support for establishing an ethics commission in a

2015 Common Cause survey. In fact, 59% of New Mexicans say they would support a candidate who strongly pushes for campaign finance and ethics reform.

We believe that New Mexico is facing a critical juncture in our state’s political history. Substantial reforms are needed to decrease the amount of corruption, which will give our electorate a reason to be more engaged with the political system. Although the current political climate has left a lot to be desired, perhaps it can serve to motivate the political will needed to bring real reform to our political institutions and leave a legacy we can all approve of as New Mexicans.

Gabriel R. Sanchez is an associate professor of political science, co-director of the Institute for Policy, Evaluation and Applied Research and executive director of the Robert Wood Johnson Foundation Center for Health Policy at The University of New Mexico. Sanchez is also director of research for Latino Decisions, a national survey firm that focuses on Latino political behavior and policy attitudes.

Melina Juárez is a Ph.D. student in political science and Robert Wood Johnson Foundation Health Policy Doctoral Fellow at UNM. The views in this column are the authors’ alone and do not reflect the views or opinions of New Mexico In Depth.

[1] See: Caillier, James. 2010. “Citizen Trust, Political Corruption, and Voting [3] 2014 New Mexico Common Cause and Research and Polling Behavior: Connecting the Dots,” Politics and Policy, 38(5): 1015-1035.

[4] 2014 Public Policy Polling [2] J anuary, 2015 Common Cause Public Opinion Survey [5] http://www.ncsl.org/research/ethics/state-ethics-commissions.aspx.

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

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COMMENTARY

Who really runs New Mexico?

¡

Arriba Nuevo Mexico!

Gauna, often posed.

The spirit of Roberto For example, who has Griego’s cherished ana vested interest in New them echoes through the Mexico remaining an Roundhouse as the 2016 environmental sacrifice New Mexico State legislazone or in reinforcing the tive session is about to get influence of big landownJavier underway. Notwithstanders, resource extractors, ing the unrelenting headand big polluters while Benavidez lines of corruption and at the same time people social ills that we face year-round, are being cut from the Supplementhere’s something rousing about tal Nutrition Assistance Program a diverse group of 112 New Mex(SNAP), which provides stop-gap ican leaders from across the state measures to confront the history coming together in service to our of imposed hunger faced by one in homeland and to our peoples’ aspi- three New Mexico children. What rations. As unpaid “citizen” legisare the political motives? lators, many live close to the pain Let’s be clear; there will be many and struggles of everyday New interests at play in the RoundMexicans. We hope many legislahouse over the next 30 days. Many tors find the status quo intolerable. special interests come to our state We urge each to keep the suffering Legislature to take resources, not of the poor, income inequality, and to invest in New Mexico. Highthe injustices in New Mexico at the paid corporate lobbyists have won center of their vision. hundreds of tax breaks, yet the At the SouthWest Organizing money not collected because of Project, a grassroots community them hurts our state’s education organization with a 35-year hisfunding and other public resourctory of working for social justice es, creating real consequences for in New Mexico, we are under no everyday New Mexicans. As we illusions. There are many obstacles saw with the travesty of the 2013 in the way of our goal of reversing corporate income tax package that the dismal conditions impoverslashed more than $260 million ished people of color face day-in, in taxes paid by big corporations, day-out. Those conditions have these failed economic development remained largely unchanged for strategies amount to an upward decades now. Therefore, as the transfer of wealth and are enabled Legislature begins its work, we by both sides of the aisle. encourage legislators to ask “Who This year, we’ll be watching for pays and who benefits?” and “Who the latest round of incentives reruns New Mexico?” - questions quested by entities like the Santoliour organization’s founder, Jeanne na development. This struggle rep-

resents a historical trend in New Mexico of international financial interests like Barclays Bank using their influence to turn a profit in New Mexico, while we get stuck with the sprawl and speculative development that lessen resources for existing communities that landed our economy in a shambles in the first place.

“Tough on crime” measures look to be prominent at this legislative session, while all the evidence at our disposal demonstrates the futility of criminalization rather than rehabilitation and restorative justice strategies. We demand the opposite: actual investment in our state’s human capital in the form of early childhood education through a constitutional amendment to access our state’s Land Grant Permanent Fund. It is simply dumbfounding that our state sits on the world’s 33rd largest sovereign fund (meaning we’re wealthier than most countries), yet a handful of state senators on the Senate Finance Committee take pride in blocking distribution of 1% of that fund’s revenue to give 4-5 year olds in New Mexico access to early childhood education. That fund belongs to the people of New Mexico. What if New Mexico’s leadership made the forward-thinking decision to get our young ones started on the right foot, rather than responding to the consequences of disinvestment 2030 years down the line?

The unfortunate truth is that

many of the legislators who are at ease with the status quo thrive off low-civic engagement and a general disconnectedness between their constituents and their voting records. How would they and the power of organized money fare in the face of full civic engagement and the power of organized people in their districts? The vast majority of New Mexicans are good compassionate people, ill-adjusted to injustice, and if given the chance, would side with meaningful policy advancements that help their neighbors to thrive.

Legislators may come and go, but the people of New Mexico’s collective desire to achieve a brighter future for our state is here to stay. We will continue to champion proposals such as the early childhood education investment until they are achieved. New Mexico’s on the verge of powerful progress; the question for legislators is on which side of history they desire to be and also how they want to be remembered by generations of Nuevo Mexicanos to come.

Benavidez is Executive Director of SouthWest Organizing Project, an organization founded in 1980 to empower communities of color in the SouthWest to realize racial and gender equality and social and economic justice. The views in this column are the author’s alone and do not reflect the views or opinions of New Mexico In Depth.

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Thank You… New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Thank you to our generous supporters in 2015, who in large part made possible our special project “At the Precipice: New Mexico's Changing Climate” Allyson Siwik Andrew Stone Arthur Alpert Barbara Grothus Bob Gorrell Bryant Furlow Carla Reed Colleen Shaffrey Consuelo Bokum David Campbell David Propst Dorothy Duff Edward Williams Elaine Carroll Elaine Hebard Elizabeth Chestnut Gabriela Ibanez Guzman Henry Shonerd Jeffrey Meyers Joe Sackett Joel Lusk John Brown John Fleck Julia Goldberg Karen Meyers Kate Padilla Kathy Turner Katie Stone Lisa Heinemann Lora Lucero M.R. Dykton Matt Carroll Michael Agar

Michael McDiarmid Myron Saldyt Norty Kalishman Paul Krza Paul Robinson Peter Chestnut Peter Hebard Peter St. Cyr Robert White Ruth Wheeler Sharon Wirth Summers Kalishman Suzanne Stone Tara Bloyd Ted Shaffrey Thomas Blog Todd Schulke Tom Turner Tony Davis Will Duff William Pockman Zachary Stauber

Many thanks to our 2015 institutional funders: KUNM Public Radio McCune Charitable Foundation Thornburg Foundation W.K. Kellogg Foundation

This special edition was made possible due to the support of the following sponsors: Agenda BWD Global Cadigan Law Firm, P.C. Catholic Health Initiatives CHI St. Joseph's Children Griffin and Associates IATSE Local 480 Jason Marks Law, LLC Joe Monahan KOB 4 Laguna Development Corporation Muffoletto Government Relations, LLC Natural RX New Energy Economy New Mexico Common Cause New Mexico Foundation for Open Government New Mexico Legislative Reports One New Mexico Research & Polling, Inc. Richard Romero, Governmental Affairs/Educational Consultant Society of Professional Journalists Rio Grande Chapter SouthWest Organizing Project Strategies 360 Sue Griffin, Governmental Affairs/Educational Consultant The Barnett Law Firm, P.A. The Farmington Daily Times The Garrity Group The Las Cruces Sun-News The Santa Fe New Mexican University of New Mexico Children's Hospital

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Follow your spirit and find true childhood poverty.

Highest childhood poverty rate in the nation.* newmexicotruth.org

*Source: U.S. Census Bureau, 2014 American Community Survey This advertisement is paid for by CHI St. Joseph’s Children and is not associated with the State of New Mexico tourism department.

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New Mexico In Depth • 2016 LEGISLATIVE SPECIAL EDITION

Internet Didn’t Kill the Conversation; Word of Mouth is Alive and Well!

New Mexico residents access and trust traditional media more than social and digital media, but they also highly value and trust conversations with friends. Learn more about who New Mexico residents trust, the state’s most favorable industries and how residents access news and information.

The Garrity Perception Survey is a scientific survey with a 95% accuracy. It is also a free resource with a five year track record of identifying who residents trust and how they access news and information. It all aligns with The Garrity Group's goal to help New Mexico small businesses to be heard and large organizations to be understood.

70 65 60 55 50 45 40 35 30 25 20 15 10 5 0

2013

2011 Local TV

Radio

Local Newspaper

National TV

Convo. w/friends

Advertising

2015 Internet Blogs Social Net

public relations

505.898.8689 | info@garritypr.com or garritypr.com

Garrity Perception Survey: Five years of thought leadership.