Speaker Egolf

It's historic and astonishing. The explosion in wealth from SE NM oil production is now projected to deliver to the state an immense surplus that approaches $2 billion, up from the $1.2 billion that was projected only two months ago. In a Sunday budget briefing New Mexico House Speaker Brian Egolf gave me the exclusive news:

With the latest developments we are already at $1.4 billion and don't be surprised if the surplus hits $2 billion. This is an historic opportunity for our state. 

The current general fund budget for the year that ends June 30, 2019 is $6.3 billion. A $2 billion surplus would represent 32 percent of that budget, a stunning amount that Speaker Egolf and oil experts expect will continue for five years.

The oil boom in the Permian Basin in West Texas and SE NM brought about by fracking and other technologies is itself unprecedented. The oil being extracted there is so bountiful it's being being called America's Saudi Arabia. In a democracy like ours the largesse from the bonanza won't fill the coffers of princes and kings, but it will mean vast wealth that can be used for the common good

The numbers are so amazing that even the Santa Fe austerity hawks are bound to rest their wings and let the spending begin.

The entire political narrative of this state is about to be transformed.

THIS NEW ERA

Egolf says this new financial era can give the state an "education moonshot." He sees the budget for kindergarten through 12 rising $200 million in the first year of the surpluses and in the years ahead the hiring of as many as 10,000 additional teachers to resolve a severe shortage. He explained:

We don't have the capacity to immediately absorb this kind of money. We will need teachers' colleges and increased classroom capacity. We need to roll it out over the five years. As for early childhood education funding, which is key to an education turnaround, I see that increasing by hundreds of millions in the years ahead.

In the first year of the budget boom, the Democratic speaker expects the surplus to easily shore up the state's required reserves, fill a hole in government pension funds as well as address shortfalls in Medicaid funding and provide for the aforementioned $200 million boost for public ed.

He says that will still leave hundreds of millions in the upcoming budget year for one time spending on capital improvements, mostly roads and bridges throughout the state:

The Department of Transportation has a long list of projects that are ready to go when the funding is available. That's where my colleagues and I will look first when it comes to infrastructure spending.

The dramatic turn in the state's financial fortunes comes after a seemingly endless decade of gloomy economic news that forced major slashes to the education budgets. In the 2009 fiscal year the state budget (excluding federal funds) was $6.015 billion. A decade later it is only $6.3 billion, not even keeping pace with inflation.

Since the economic implosion struck in 2009 New Mexico has suffered some of the highest unemployment rates in the nation, an out migration of its population (much of which went to prosperous neighboring states), a drop in the national education and poverty rankings, a drug and crime epidemic that has wreaked havoc statewide, especially in the ABQ metro, and an outbreak of child murder and abuse that has swamped the Children Youth and Families Department.

That's the bad news. The exceedingly good news is that the next Governor and Legislature will have the tools--and no excuses--to start the rebuilding of a state that has lost so much of its soul but now at long last can perhaps look forward to brighter days.

A REDEFINING MOMENT

It was a redefining moment when Rep. Egolf went before the NM Oil and Gas Association meeting last week in Santa Fe. It's a group the liberal lawmaker has often tangled with over the years but this time, clearly humbled by the enormity of the surplus the industry is making possible, he thanked them and was in turn applauded.

GOP State Land Commissioner candidate Pat Lyons was on hand and used the moment to reach out to Democrats he needs to win in his race with Dem nominee Stephanie Garcia Richard. His campaign said on Facebook:

Brian Egolf Democrat and Speaker of the House thanks the Oil and Gas industry for the huge budget surplus and commits much of the surplus to education and to add 10,000 new teachers over the next five years. Patrick Lyons is committed to working with the Oil and Gas Industry to ensure that this vision presented by the Speaker comes to fruition. This is a great example of our elected officials working across party lines to do what is best for New Mexico.

Lyons saying he is in agreement with Egolf's spending plans is a clear example of those fiscal hawks resting their wings.

XOCHITL'S SURPLUS

Speaking of surpluses, look at this. Southern Democratic congressional candidate Xochitl Torres Small has just broken the record for the amount of funds raised in a single quarter for a state congressional race. She received a stunning $1.9 million in the three month period that ended September 30. And she's not alone. Many of the Dem races are attracting money from across the nation:

. . .  At least 60 House Democratic candidates reportedly raised more than $1 million each in the third quarter of the campaign cycle that ended Sept. 30, eye-popping sums that defy even the most optimistic of projections. But with Nov. 6 less than a month away, some political observers have wondered publicly whether a candidate could have too much cash.

Well, they'll find a way to spend it. You can count on that. The full federal reports will be released this week, including that of State Rep. Yvette Herrell, the GOP nominee hoping to defeat Torres Small.

HISPANIC TURNOUT?

Torres Small has no money worries. That's for sure. But in a race that is hanging by a thread there is always something to walk the floors over. In her case, it is signs that motivating the Hispanic base she needs is an issue.

NO DEBATES

Dems point hopefully to a turnout spike in the very early voting in Dona Ana County. That's where Torres Small must take a commanding lead over Herrell in order to offset the Eastside and score a win. They say it's encouraging but are not ready to say it's a trend.

Even amidst the tidal wave of cash that is washing over Torres Small the Herrell camp doesn't appear to be panicking. As they have for Xochitl, third party groups have been smothering the airwaves on Yvette's behalf. So Herrell's camp has decided that they are not going to risk what appears to be a small lead by debating their opponent on TV or anywhere else.

Apparently they believe facing water attorney Torres Small would only enhance her stature and that debates are too too risky. That might be sound political strategy but it does deny the voters the chance to compare the two contenders side by side.

The race is ranked Lean Republican here although some DC pundits have it in the Toss Up column.
EARLY VOTE COUNT

About 2.5 percent of the electorate has already voted, if you assume the total turnout for the election will be about 600,000 which several political pros prognosticate. Secretary of State Toulouse Oliver's office reports that at the end of Friday 15,697 New Mexicans had cast ballots since absentee and certain in-person early voting began October 9. Those numbers will skyrocket October 20, the first day of widespread in-person early voting.

THE GUV FRONT

On the Guv front the attack ads are coming fast and furious. And they are better produced and more compelling as the consultants hit their stride.

GOP nominee Steve Pearce comes with a solid hit against Dem Michelle Lujan Grisham's service as a Secretary of Health and she in turn gets an effective jab in as she compares Pearce to Trump.

Strategically, Pearce appears to believe he has done what he can in the North and is now concentrating on bringing more votes out in his southern congressional district. A turnout spike there, combined with negative ads that he hopes will dampen BernCo turnout for Lujan Grisham, seem to be his end play. By trotting out Trump MLG is putting a moat around BernCo and Santa Fe to keep Pearce out.

While he has worked hard to soften up northern Dem Hispanic social conservatives she in turn comes with a TV spot that features a northern sheep rancher supporting her. Such ranching is a cultural touchstone in the North that goes back 400 years to when the Spanish arrived there. A recent Republican-financed social media video featured northern ranchers who declare themselves upset about a progressive turn in the state Dem Party.

INK STAINED SUPPORT

The state's three major newspapers are all expected by the political insiders to endorse Lujan Grisham. She snagged the first one Sunday when the Las Cruces Sun-News gave her its editorial blessing and in doing so rejected their area congressman:

Pearce has represented us in Congress since 2002, with the exception of one term. We know that he is a skillful campaigner, well versed in the arts of retail politics. But, as a member of the Freedom Caucus while in the House, Pearce too often took unyielding stances that helped contribute to the dysfunction of Congress. Those stances may have fit with the conservative part of the district that Pearce represented, but are out of step with the state at large.

The race for Governor is ranked Lean Democrat. .

SENATE ACTION

By all accounts the US Senate race is going to be something akin to a blowout for Democratic incumbent Martin Heinrich but that doesn't mean it can't get interesting. And thanks to Libertarian and former NM GOP Governor Gary Johnson it did just that Friday night in the first of two debates that also featured Republican nominee Mick Rich.

The hour long affair on KOAT-TV was often turned on its head by Johnson who brought  his now familiar high pitched voice and plaintive calls for Social Security and Medicare reform, He also melodramatically warned of economic collapse if the federal deficit continues to soar and he often violated the time limits and interrupted Heinrich while he was speaking. Johnson's shtick may have been appreciated by voters bored with the race but even as he tried to dominate, he did not win.

WHO WON?

Believe it or not, Republican Mick Rich, who had an uneven debate performance, was the winner, only because tens of thousands of Republicans who had never really heard or seen him at last knew they had a Senate nominee.

Rich gave them what they wanted--a defense of the proposed border wall and a vote of confidence in Supreme Court Justice Kavanaugh. Now if the R's could help him get on TV he would have a clear run for second place and maybe help Steve Pearce whose race on the ballot is right below Rich's. Johnson is up on cable TV and digital media and Heinrich has been saturating airwaves since late summer.

As for Senator Heinrich, he was his usual cautious self. As the game days dwindle down he is emphasizing the bread and butter issues that will keep his Democratic base with him--Social Security and income inequality, to name two. His goal now is to reach a majority in a three way race--50 percent--to quash any scuttlebutt that he is losing his electoral touch.

THE BOTTOM LINES

 Democratic National Committee Chairman Tom Perez will appear Tuesday morning  in ABQs Northeast Heights and in Rio Rancho in Sandoval County as he works to increase Dem turnout. Details on attending his ABQ visit here and his Rio Rancho visit here.

Retired NMSU economist Chris Erickson writes of our 15th anniversary on the blog that we're observing this month:

Congrats on the anniversary. When you were getting ready to rev up the Blog I remember you telling me that it was going to be the sort of Blog you read once or twice a week, not a daily thing. You were wrong. I’ve missed very few days over the last 15 years. Thanks for the 15 year addiction.

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(c)NM POLITICS WITH JOE MONAHAN 2018