New Mexico State of the State Address; 1994 (With Analysis)

. . . . . .. .. .. .. .. . . . . . . . .. .. .. .. you Edine White from Fox K womi TV now presents a

coverage of governor keen state of the state Address to We're back with direct coverage of Governor King's state of the state of dress. It is the second session of the 41st New Mexico Legislature. We expect the governor to enter the House Chamber in Santa Fe at any moment now. Governor Bruce King will be making his 12th state of the state of dress. This is the final fourth year of his third four-year term. He's governor of New Mexico, and of course there is an expectation that he will run for yet another fourth term in the fall of 1994. So we're waiting now for the governor to make his appearance. I'm joined here in Albuquerque at the Canon East Studios by Leasing of the University of New Mexico, economist, budget, analyst, distinguished observer of New Mexico politics.

And I'll be talking here later we'll go to Santa Fe to talk as well with Max Call, Representative Call from Santa Fe County, Chairman of the Legislative Finance Committee, and Secretary K. Mar, Secretary of Finance and Administration in the King regime. We're waiting now as you can see the House Chamber in Santa Fe for the announcement and the arrival of Bruce King. Do you think any Bruce Pulmonary comments here and the expectations of what we're going to say? I think everybody knows that what's on most of the taxpayers' mind is what's going to happen to the $300 million dollars and I'm sure that we'll hear a basic plan for expanding that and giving part of it back. But the legislature, as you know, has a different idea. So we'll see clashing ambitions there, a lot of men and women in this audience at the start of their political career, Bruce King virtually at the end, at least perhaps one more term as governor, but at the end of a long road, beginning in the 1950s.

Yeah, let's go back all the way to when he was Speaker of the House, but chairman of the last constitutional convention, he and Dorothy Klein, you know, worked on that together. The late Dorothy Klein was just passed away. Well he is in many ways a relic, isn't he, in New Mexico politics? Well, I'm not sure I want to agree with that, but still the point alive, he's had more experience than anybody else. They're still introducing distinguished guests there in Santa Fe, we do expect the governor shortly, very Speaker of the House, Ray Sanchez, who was entering and embracing a colleague there near the Dias, in front of it. Well, as we said, very much alive relic and still a potent political force in New Mexico, no real challenge on the horizon yet, but we know a lot of rumors out there that you may be challenged in a primary, but no live announcements thus far.

I think Bruce is considered by many people to be a safe choice for whatever office he runs for, and that makes it pretty hard to mount a formidable opposition. Now we do have a number of challenges on the Republican side, a representative Chaney, former representative Chaney, and the paper last week, and former Secretary of Tourism and Economic Development to John Dendall from Santa Fe. And now we hear that Dave Carwell, if you're interested in that. Former governor, two-time governor, and erstwhile candidate for mayor of Albuquerque, and once a candidate for Congress, Dave and Virgo, should be a lively race, should be a good thing. Still waiting here for the governor, and there's always a bit of a lottery here going on in terms of what time the governor will actually arrive because of all the protocol and introductions that are done traditionally this time of year. Lee, is there anything extraordinary we should note about this legislature? This is its second session, but it does have a respectable number of freshmen and newcomers,

doesn't it? Since it does have, I suppose it is unique, at least in recent history, having this great abundance of resources to do things with, but in a sense it also has many challenges. We look at the provisions of crime in our society and the prisons, and that's been on people's minds because of that prison. Prisoner is walking away from the global game the other day. It's a tough, tough situation. We don't seem to have the handle on how we improve people who go to prisons, so prisons seem to make them worse and yet we want to build more. Well the irony is it seems to me that this abundance of money, which is relatively rare, a lot of states would give their Californian love to have their state capital to be in our shoes, this abundance may force a kind policy debate, which we really haven't had as much as we have had, alternative visions of how this money ought to be spent, or perhaps

that it shouldn't be spent at all. That's right. As we were talking earlier, we have some pockets of poverty in the state that are among the worst in the country. We haven't dealt with those very well through the years, partly because we don't have to deal with them. Obviously jobs are what are needed, but how do you get jobs? Governor is almost on his way. We hear he'll be speaking to a predominantly democratic legislature, 53 to 17 in the House, and 27 to 15 in the Senate, and here is Governor Bruce King. Governor, Mrs. King, welcome. Thank you very much, Governor Luna, it's wonderful to be here with you today.

It's not working on, well, we're turning on drug in. Thank you, Governor Luna, for that wonderful welcome. We want to thank all of those that came and ask for it to stand, so it's a real pleasure to be here with us. Well, it's wonderful to be back here again and see a pack chamber, and we have a lot of things we'd be thankful for. How many of you all noticed on ESPN last evening with New Mexico State Nagies playing Las Vegas, Nevada? How many of you, UNM fans, had the pleasure of seeing the other number one teams or two up for the championship of Hawaii and UNM University playing Saturday night in the pit?

So, that's wonderful to have the two teams in New Mexico to be the number one teams and each one of the top teams, and we're very, very proud of the Aggies, and let them get more of the great big round of applause. And I look forward to telling my good friends, Governor Bob Miller from Nevada, that our New Mexico team won in their home gymnasium in Las Vegas, Nevada. I think that's the first time, at least in a long time, and also our very good friend John Hawaii from Hawaii, that our team was victorious and there too wonderful governors, but they're always are kidding me about what kind of a team you have this year, and particularly Bob Miller, because he's basketball players, and now we've done well, and that's just

a few of the many, many things that we have, that we are number one, that we've done well, and we've stayed up with all of the other areas, particularly in the Rocky Mountains. So, with your information, I would like to make the presentation, Mr. Speaker, Mr. President, this team, which members of the legislature, are gassed in citizens around the state. Good afternoon and welcome to the second session of the 41st New Mexico legislature. It's always an honor to appear before you to discuss the conditions of the state, especially this year when there's so much good news report and to make some recommendations for your consideration during the next 30 days. You should have received the formal state of the state document detailing this administrative portal from 1994 and 1995, an abbreviated speech version that I will deliver. First, I'm very pleased to be able to report to you today that the economy of the state

in New Mexico is in very good shape. Our prospect for the near future are excellent. As a result, the financial conditions of state government is the best it has been in at least a decade, thanks to you, legislators, to my fine staff in an outstanding cabinet. New Mexico economy is now shown to have been much stronger during the past couple of years than we previously believed. In fact, job growth for the last half year has been the second fastest in the entire nation. This January, 1991, through October 1993, we have added 58,000 new jobs to the economy and 51,000 new workers to the workforce. Our most recent quarterly figures for personal income growth is remarkable 7 and 14 percent.

Well above the national average of 5 and 5 10 percent. It has been near that figure for every quarter since the middle of 1992. According to campus securities, our economy ranked 14th strongest in the nation for the third quarter of 1993. The growth in jobs and income is reflected in every sector of the economy, construction particularly housing, trade personal services, health services, finance, ag culture, transportation, communication, tourism and manufacturing, even mining has turned around. Most of this is on more of this is on the horizon. The economic outlook for New Mexico, future is excellent. We are in an expansion trend, I hope so anyway.

A recent forecast, hard to predict safety at any center. So I have to say, hard. A reason forecast for New Mexico in 1994 puts personal income growth at 7, 17 percent job growth at 3.7 percent or 23,000 new jobs and predicts a drop in the job is rate below 7 percent. Numerous sources of economic strength are expected to drive future growth. Perhaps the most important is end migration. Relocating a retirees, entrepreneurs, small business construction, workers and major factories, especially from California. And I might say now that we are all saddened, of course, of the tragedies that have come to California.

Alice and I were there at the Rose Bowl and we were telling them the same highway. So it is hard for us in New Mexico to realize the destruction that those things call calls. But I do want to know the won't the governor, my good friend Pete Wilson and all the people in California to know that our sympathies and prayers are with them and will do anything we can to help them. And some of our teams of medical, emergency staff have already gone to California. Of course, the huge two-bedroom expansion of Intel and Rirajo, one of the largest new manufacturing plants built in in North America in the last decade, is a prime single example of our growth, adding 1,000 permanent jobs and 3,000 temporary construction jobs. But there are many others, such as the Preno food, cheese factory in Roswell and the opening of the Santa Teresa International Board of Crossing. Our spending economy has been used enough new income to the state to put us in the

annual position of being able to project additional revenues of about $300 million in the coming 1994 and 95 fiscal year, as well as giving us a cash balance of about the same amount at the end of the current fiscal year at this June 30th. Most important, the midpoint of our range of revenue projections for the next five years is 6% per year. But for I can comfortably recommend to the 94 legislature cut taxes by $100 million, increase real current spending by 10% and increased general fund reserves by 50% to $150 million. Thank you. I had a place marked there, but sometimes it won't clap where it's marked.

These proposals have already been made public, but I will briefly discuss them again. Last year we passed legislation increase in the state's gasoline tax by $0.6. $0.5 is going to the general fund for the general operational government and one cent of the state road fund for the construction and maintenance of highways, roads, and bridges. We have sufficient resources right now to be able to return some money back and still adequately finance government operations. I am proposing a tax relief package in three parts, which I will outline. Before that, let me say that I am very gratified that the administration and the interim legislative finance and revenue stabilization and tax policy committees are in basic agreement on the need for a tax relief in about the same amount. It's the details that we sometimes never.

First I'm proposing repealing the 5 cent per gallon general fund portion of last year's gas tax, which provides the saving of about $40 million tax payers. This one. This was in fairly place to meet a health need. I perceived like a sufficient, a perceived like a sufficient revenue that clearly no longer exists. Our touch-paying citizens don't like it. They made their feelings plainly known to me as a trail around the state. Law and income families pay a far larger percentage of their earnings toward it. Let them out for the 42 million rebate state personal income tax to be paid directly by taxpayers. This would be a one-time payback by Texas summer that would come out of the cash balance. We will have at the end of the year and it would amount to $27 per exemption. Third I'm proposing that when I had to initial $18 million, state earned income tax credit

to a sales lawyer income working families and estimated 130,000 you might score working families with children and 40,000 very low income workers without children would be eligible for the credit. This would be paid by a federal earned income tax credit that was first night to baton in 1975. The intention of this type credit is to all set the impact of social security taxes and Medicare taxes on low income individuals and to promote work rather than lots of welfare benefits. I'm proposing that eligible families receive a credit for their 1994 tax year of 9% of the amount that their federal earned income tax credit. For example, for 1994 and you might score family with more than one child with an income

in the range of $8,425 and $11,000 would receive the maximum tax credit of $227. The credit would gradually decline to zero at an income level of $25,300. As you recall, we eliminated the low income food and medical income tax rebate program. Raising approximately $20 million for the general fund, which was appropriate for new and expanded social service programs, generally serving low income new Mexicans. I'm concerned about the effect of the rebate repeal on many low income working new Mexicans who do not benefit from welfare and social service programs. I believe a state earned income tax credit program will compensate for this loss and actually deliver tax relief more efficiently.

Most of all, it provides increased financial incentives for individuals and families to work and stay off welfare. I ask the members of this body to carefully consider these tax relief proposals. On the spending side, the administration is recommending an operating budget of slightly more than $2 and $6.10 billion, which is a 10% increase over the present year. While we are proposing to spend most of the projected new revenues, we're also asking that our target reserves be increased approximately $150 million. This is not a budget of frills, it is a prudent budget that more science faculty funds our needs. With one notable exception, we're not asking for a lot of new operational programs. What we are asking for is that current crucial programs receive more adequate funding. Well we're tired on public education in the last three years and we're beginning to see

results. We have focused on the preschool years so that more children start school ready to learn. Many of these programs are discussed in the formal state of the state document. This year of the new revenue available for spending our tax relief, I am recommending that more than 50% of it go to public education. This means spending $1,239 million on our public schools and increase of 10% and 60% over this year's spending. This amount is $36 million more than the LFC budget proposals. We're asking for a 6% raise for public school teachers which combine with a similar increase of following year should bring teachers up to the regional average.

The amount we are recommending will allow for full financing of the public school funding formula for the first time in a decade which should live constraints that some local boards have failed in recent years and fully implementing the percentage of teachers salary increases that the legislature has set. I certainly believe in the local school board autonomy but I would urge school boards if the legislature fully funds the formula to closely adhere to this body's final teacher salary increase. I have a feeling the legislature made its own, made its own seats, some alternative methods of working its will. I don't know if you let us plug them up. Yeah, I'm getting ready on the lights. The one major new initiative I'm seeking is facing in a full day of kindergarten over

a three-year period at a cost of about $12 million. One of the achievements at which our most proud is proposing and then signing into law in 1971 during my first administration the state wide half-day kindergarten program. Kindergarten is one of the very most important components of public education. It's an investment in our children and our future. I know that the mothers and fathers of New Mexico will be a priest even grateful if you carry this through. While we're increasing sport for education, I'm urging at the same time that schools find ways to keep children in school. Children cannot learn when they're out on the streets. They have no word to go but down. I am recommending a 10.4% increase to 432 million in funding for higher education. Enough to avoid any tuition increases during the night school year.

We're proposing that higher education employees receive raises averaging 5%. Said government employees have received at least in compensation increases in the past few years, 3% or less. With our projected revenues at the level they are, I'm very happy to recommend, along with the LFC and the state personnel board, an agreement with public employee unions that we give all state employees a 3% pay increase on July the 1st and another 3% merit increase in employment and emergency dates. For those whose work, performance is considered size factory, I believe our table and hardworking state employees deserve this, saying clap one more time, so you have to go ahead and

up. We certainly all do, and you might score the becoming nationally recognized for its efforts to improve service for children. Our children, new and family department, has up and running well. Alice has regularly asked to speak around the country about our program. Where are we using the number of children in out-of-state and out-of-home placement, child support enforcement payments, are up 47%, immunization rates have increased from 55% to 65% over the past year. In addition, the child support enforcement division, reasonably signed the first joint part of the agreement with the now-home nation to develop a reservation-wide child support enforcement system, with the first offices to be located in Shiprock in Crown Point, New Mexico. Alice and I have issued a New Mexico Children's Gen, a framework to guide the work of

this administration in the children's area. This document describes a number of outcomes that we are working toward. The executive interagency group is working hard to ensure this agenda is meeting the needs of our youth. The executive budget document targets money toward various desired results, and I ask that you give the request every consideration. As with the federal government, we in New Mexico are looking at ways to reform the health care system so that all New Mexicans will eventually have health care coverage. I am hopeful that President Clinton and Congress will succeed in acting a comprehensive health care package that will allow New Mexico and all other states to meet the health care needs of all of our citizens in the near future. As this unfolds on the national scene, New Mexico health care initiative headed by Dr. George

Goldstein continues to seek the assistance of business, labor, consumer, and professional groups in developing a framework for a comprehensive reform of the state health care system in order to contain calls to extend coverage that will complement whatever develops at the federal level. In the meantime, I am asking you to take immediate action in some areas to improve access to health care of many of our most needy and deserving citizens, and to support education and planning efforts that will improve our health care delivery system. Overall, I am recommending 5.6 million for new health care initiatives in the current and upcoming year. They most far-reaching change in the terms of number of people served in the expansion of Medicaid to all children in families within comes up to 185 percent of the federal poverty level.

I am seeking and supporting adequate funding both in state and federal money for health services in the area of the severely mentally ill development disabilities long-term care, substance abuse, primary care, border health, anti-virus education, and the education of health care professionals among others. While I have spent much time stressing to serve children, let me once again re-enter, re-iterate my strong continued support for our senior citizens programs and for seniors and general. They are such an important contributor to our society. The adult service task force is hard at work, studying ways to better provide services to our citizens. I ask you to continue this task force. Now, in economic development, I have discussed that some link the strength of our economy

and our achievements in that area. The one specific request in this area that I want to point out to you is a recommendation for an appropriation of $6 million for implant training. As you know, I have long maintained a long with types and centers. This is the single most important economic development tool that we have. Three years ago, we split the health and environment department into separate agencies. This is worked well, and we are able to receive citizens input and response to environmental problems much more quickly. We passed this stage first hard luck mine, reclamation law, and the state press for cleanup of abundant mines such as the trail of mine on the Upper Pakers River. Working with the state's Congressional delegation and the Clinton administration, we

legally agreed on a campaign promise to ensure supervision by the U.S. Environmental Protection Agency of the Waste Isolation Pollate Project in Eddy County. We will continue to strive in our efforts to keep our air and water cleaner so our citizens can continue to enjoy our mountains and plains and a healthy environment. As with last year, I will not recite every ZKD recommendation by Department of Agency. They are in the budget document for you to review and consider, but once again, I want to draw your special attention to the Department of Corrections. I am very hopeful that by the end of this year, we can meet the demands of the U.S. District Court that we complete the necessary steps to be in final compliance with the grant consent decree. I am recommending an additional amount of $11 million or $11 per cent increase in the correct supportment operating budget in addition to about $25 million in capital budget in

order to meet American Correctional Association standards. I believe this increase is vital and necessary to stain our efforts to meet the conditions of the decree. This would encompass 150 full-time positions, including at nearly 100 new guards and sufficient personnel and operational funds to alleviate inmate items through the establishment of adequate education and vocational programs, as well as provide an acceptable level of medical and health services. The capital budget recommendation consists of about $25 million. It includes 10 million to get work on a new prison replaced, the 400-bed main facility in Santa Fe, a million to build a new 264-bed minimum restriction facility in lost cruises, three million for an necessary renovation at the North Maximum in South Minimum Facility

in Santa Fe, and about one million for needing improvements to the infirmary at Central New Mexico Regional Facility in Los Loonas, and three million to plan and design future construction needs. I think the main facility has passed its use for life. The total cost for replacement will be about $40 million, which is about double what I was originally told, but we have sufficient bonding capacity to handle it. To continue to bandage the current junk pile out there is to continue to pour money down around home. I want to send a message to the Violet Primo that if you commit the crime you do the time. We will have a space to keep the Violet Primo locked up away from society.

I have said in the past and continue to believe that it would be better to invest in crime prevention programs than bill new prisons. And we need to continue to expand community correctional programs for both adults and juveniles, but the fact is that our prison population grows about 5% per year and we are obligated to meet the needs this creates. I ask you to give a very careful consideration to these requests, and a reason being with myself legislated in correctional officials, the special master overseeing him and taking the grant consent decree, virtually endorsed these executive recommendations as necessary to come into compliance. During this short session, I will only send a very limited amount of special legislation. I know you legislators appreciate that.

Only that which I think may be of an emergency nature or a surrounding importance. In addition, the tax cuts and improving education, in addition to tax cuts and improving education, the one other major concern that citizens really expressed to me is there to stress about crime. You may expect from me legislation dealing with crime prevention issues, including juvenile tension security, my task force on crime has made several recommendations for the reduction of violence and crime and we will do our best to carry out those recommendations. One specific bill that I will ask you to pass, the one would make it a crime for juvenile 's possessed hand guns under most circumstances, gun violence by juveniles, particularly connected with game violence, have gotten completely out of hand and we've got to do something

about it. This will help and I believe that the public will strongly support it. The bill I'm supporting is similar to a reason to talk about it at all that makes the felony for persons under 18, possess a hand gun unless they are hunting, training under adult supervision or participating in other legal activities. I also reiterate my long time support of law abiding owners of firearms. The task force on property tax work hard and you can also expect to be dealing with property tax equity from them and myself. I also support the recommendations of the task force on Indian taxation that we complete a comprehensive study of this issue by October 1995. Finally, I want to take time to congratulate this body for its hard work and particularly want to highly commend you for the great and massive efforts you made in reforming New

Mexico's DWI laws during the 1993 session. While much of that legislation did not go into effect until it's January 1, I'm convinced that the wide public and media attention your work received was the major contributing cause to the merit drop we had in traffic fatalities in 1993 to the lowest level in decades. Your work definitely save lives. People now have a greatly heightened awareness of this problem through your efforts and the many public citizens who assisted you. So let us look forward to a very productive session that we can say at its conclusion, serve the best of overall interest of all the citizens.

You've been a great audience today. I'm really appreciated and enjoyed delivering the state of the state message. Thank you and God bless you. Thank you very much. Governor Bruce King delivering the state of the state address to the second session of the 41st Mexico legislature. Governor is now leaving the House chamber. Seeing hands with various dignitaries there, it was nearly a 30 minute speech, about 28.9 minutes, a little longer than King's speeches usually run, but he had, as he told his audience, some very good news to share and the number of proposals on how to spend first budget surplus long while. I'm Roger Morris back in the Academy Studios with Lee Zinc of the University of New Mexico.

And Lee, I thought we might recapitulate here just very briefly what the governor said, or at least what I heard him say, started out by telling us he had so much good news. The economy of New Mexico in very good shape used the word excellent, best in a decade, he said, attributed some of that to economic resurgence to his own administration, I guess a natural enough attitude for a politician. Second in the nation, he said, in the creation of new jobs, more than 7% to growth and income, 14th strongest economy, according to New York bond evaluation, we are in an expansion trend. And then he added, I think, off the text, I hope so anyway, hard to predict these things. Attributed all of that to relocating businesses and people, retirees, especially, he said from California, taking note of the earthquake there, added that we would have $300 million dollars, rejected in new revenues for 1994, 95, that's a 6% growth. He then proposed to the legislature, and this will bound to be the, it seems to me will

be the heart of the controversy in this session, a three point tax relief plan, wants to repeal the 5% per gallon gas tax, which was imposed last year, amounting to $40 million. He wants a $42 million tax rebate on personal income, about $27 per exemption, not a lot, but it adds up here. And then an $18 million earned income tax credit for low income people, affecting about 170,000 families, those with and without children. As you noticed, very light applause from the House and the Senate to those proposals. Just to spend $2.6 billion, that's about a 10% increase in his operating budget, no frills, he said, adding mostly to current programs, more than 50% of the budget, including the new spending would go to education, including public education, including a 6% raise for public school teachers. He wants to bring the first full financing of the public school finance formula in a decade

would be a novel approach in New Mexico. As one new program in education was an institution of a full day of kindergarten, to be phased in over the next three years. He called attention to the fact that he was governor, way back in the 1970s, when half day kindergarten was introduced for the first time in New Mexico. $40, $42 million budget for higher education, 5% increase for you and your colleagues at UNM and elsewhere, and finally a 6% increase, 3% on July 1st, 3% then later in merit increases for all state employees, which got some applause from those legislators who know that every state employee is usually a vote. He also talked about the children's agenda, that he and his wife, Alice, have been pursuing about health reform, gave a specific proposal for $5.6 million for new health care initiatives, although that's a very low figure, as we know, in terms of the overall budget. Just a million more for new in-plant training, which seems to be his economic development platform

here, talked a lot about corrections and prisons at the end of his speech. He wants $11 million more and 11% increase in the budget for operating costs and corrections, and a $25 million new capital budget principally to build a new prison in Santa Fe. He called the old one out there the side of the 1980 riot when he was governor in an earlier term, the current junk pile, as he put it, can't do much with that. City had a signal to send to criminals in New Mexico. If you do the crime, you do the time. Want sufficient place to put them. Talked about new programs in crime control, and especially a new handgun law, which you'll be proposing, make it a felony to possess a handgun under the age of 18 without very precise exceptions. Finally, they have a commendation to the legislature for its work last year on DWI legislation, called attention to the fact that fatalities on New Mexico highways are the lowest this

last year in a decade. Predictable speech, but I think it sets the framework for the controversy we were talking about earlier at the top of the show. What's your impression? Yeah, well, I noticed Senator Billie McKibbin, the southern part of the state, as the governor was leaving, was standing right there with two, no, six percent, no six, Senate gallant taxing. I think what's going to happen, of course, the legislative finance committee, wants to keep the gasoline tax and do something in the income tax. It must be something different than what the governor has proposed. I haven't studied that thoroughly, so I'm not exactly what that is, but I think that's going to be the primary bone of contention, is whether we keep that gasoline tax or whether we do the tax relief through income tax. Well, isn't this an old pattern in New Mexico? We get a little bit ahead of the game, and our inclination, of course, especially if you're a sitting politician running for reelection, as Bruce King, presumably is, is to give back in an election year as much as you can, you can go to the folks and say, I just gave

you 42 million bucks in income tax rebate. It perpetuates the paradox, and New Mexico doesn't. Extremely poor states would never quite meet its needs. If you talk to people about, for example, the gasoline tax, we have, in the previous two legislatures, robbed from the road fund, about $40 million, because we needed to put it other places, and it wasn't readily available in their, in more increased taxes enough to do that. So we're behind in the state road fund right now, and if you listen to some experts talk about, for example, bridges, we've got a great many bridges in this state that are suspect that we don't know whether they're structurally sound or not. Well, it's ridiculous for us to not try to begin to fix those, instead of talking about, let's reduce the tax intake into that. We ought to probably, in my opinion, which isn't worth anything, because I'm not in the legislature nor the executive branch, but we ought to leave that money in the road fund, and start fixing some of the problems that we have in the roads in the state.

I keep seeing those visions in my mind of what happened in California yesterday, and goodness knows, hopefully, we won't have an earthquake, but we could have deterioration of roads and bridges if we don't maintain them. Well, there's infrastructure, and there is the chronic problem of New Mexico's poverty, of unmet needs in New Mexico. I listen carefully, as I've listened to so many state-of-the-state addresses by a Bruce King, and I think in vain to hear an actual policy articulated more money thrown at the same old programs, not a lot of new initiatives or new thinking here was there. Well, you know, he was talking about getting the kids a good start, and I think we have to give him credit for the kindergarten program, and certainly a full-days kindergarten across the state would probably begin to help some of the educational problems, but we have, because we're such a big state with such a small population, we have some tremendous educational challenges in some of the rural areas, and we aren't doing very well in that, and we need to do better, and I think that's one of the things that we'd like to see

addressed, because that's ultimately going to help our economy probably, more than anything else, is to have a sound educational system. Governor's going to encounter opposition from both sides of the aisle, isn't he? He'll have Democrats in his own party who hold a preponderant majority in both houses saying we ought to spend more, we ought to spend it differently. He'll have Republicans saying we don't agree with your priorities or with the rebates and so on, but we don't want to spend either. I mean, he'll have it from both sides for 20. Of course, really, right now, if you look at the situation, he is sort of put it in the lapse of the legislature. They're going to be the ones that are going to be dictating for the next 30 days the way it's going to come out. Of course, he'll have some say, and he'll have his lobbyists working, but if you look at the end result, it's going to be more legislative than it is executive. And that's consistent with the pattern that we've seen with Bruce King, isn't it? This is not a gubernatorial-centered administration or tenure. It does seed a lot of power and authority to the legislative branch.

Even though this is a short session, as he pointed out, now 30 days from today, we can take stock of all of this. They've only got, though, a very short time to make some other fateful decisions. And there'll be a lot of controversy about this and so how you give taxes back to the people or if you give taxes back to the people and how you spend this extra money. When we talk about the 300 million extra, we would have needed under normal circumstances about 100 million extra, so what we have is 200 million, and that's a lot of money for our state. Nevertheless, as you mentioned, if you look at the needs, if we really carefully assess the needs, we could spend that 200 million off the quickly. People are in the mood that they want some of it back. If we take it back, that's going to be a problem in the future because the needs are still going to be there in the future. The thing he was talking about about the criminal justice system, that's a little bit scary to me, Roger, and if you hear national experts talk about what our prisons are doing, our prisons are not successful, and yet we're building more because we feel that we have

to warehouse people, and yet that's not going to solve our problem. Let's see if we have agreement or disagreement here, and what the mood is in Santa Fe. We have a secretary of a finance administration, K-Mar, from the King Cabinet in Santa Fe, and Representative Max Call of Santa Fe County, the chairman of Legislative Finance Committee, both standing. Welcome to both of you. Let me ask you first, K. Were there any surprises here for you? You've got a wonderful exception to the rule in New Mexico, an actual surplus, a little money to work with. Were the priorities arrayed, as you expected them to be, in the preliminary deliberations here, and the governor's address? Well, obviously, Roger, given my position, I have a large responsibility in terms of assisting the governor in preparing this budget, so I'm well aware of what is in the budget, went into the speech.

Well, I was wondering if there had been any disagreements or any debate among the governor's advisors in the Cabinet about how to array this new money, or what to give back, or what to spend, or was this a general consensus of the administration? Well, of course, there are always a number of differing views that are discussed, and the governor makes the ultimate decisions with respect to the budget proposals. So yes, of course. As you well know, there was a request from the public schools in higher education and the state agencies of over $576 million, request in new money, and even though we had new revenue growth of over $300 million, obviously we couldn't accommodate the $575 that was requested by everyone. So naturally, all of those budgets had to be analyzed, and there were lengthy discussions that have taken place from early September through the end of December in determining

what ultimately is reflected in the governor's budget recommendations. Well, I know the governor hasn't made a formal announcement yet of his plans for $94, but is this the kind of budget that you're willing to go to the people with, that the Cabinet can defend politically, if you're called upon to do that? Oh, I don't think I'd have any trouble at all defending it, Roger. You know, New Mexico is in an in-view position financially. And I think it affords us many opportunities to do a number of things, not only with respect to addressing the various needs and schools and higher education, social services, et cetera, but also to think about the people that provide the money to the state, namely the taxpayers of this state. And as you can well imagine, the governors had a lot of correspondence from them with respect to what they'd like to see in his budget. And he's tried to listen to them, and that is reflected in his tax package. And if I may say one thing about his tax package, and that is the strategy underlying

that package was to target people at the lower income levels, so that whether you're talking about the earned income credit, which would give a family of four who makes between $8,500 and $11,000 of adjusted gross income a year, about $227 back, or whether you're talking about a repeal of the five cent gas tax, which would give that same family on the average, about $61 back, or whether you're talking about the one-time rebate of $27 per exemption, which give them an additional $108 for a total of about $400, his concern is that he wanted to give some incentives to the people who are working. I think in recent years, we have been very concerned about the least fortunate of our citizens, and we continue to be concerned about them, and provided substantial resources for them. But I think the governor also believes we need to address those people that are just above them who are not benefiting from the social services and other initiatives of the state,

but who need some support out there, and that's the purpose of his tax package. Representative Max Cole, a governor, is going to be giving back some tax money, repealing a fairly unpopular gasoline tax. It strikes me as a very tough program to buck and the legislature, and yet to some of you, your colleagues, seem to be ready to do just that. How do you see the battle developing here? Well, I think that the legislature will consider and probably pass some tax relief. I don't know that it'll be exactly in the same amount, or form that the governor is requesting, but I do think that the legislature is interested in giving some relief. I notice that the low-income proposal at Ms. Mar was just talking about is extremely similar to one that our tax policy committee developed over this last interim and recommended for consideration.

Lee Zink, why don't you jump in here. Do you have any questions of either Representative Cole or Secretary Mar? Well, I would like to say first that I think the state is indeed fortunate to have both of these people working for us as taxpayers. They're both very knowledgeable people, and they do a great job of keeping state government moving along efficiently and well. There's an unsolicited endorsement. Well, I'm serious. Too often we try to knock people who are in position like they're both of them, and I know both of them well enough to know how hard they work for all of us, and I appreciate it. One of the things, Max, that you were saying you think the form of the tax relief might be somewhat different. Are you talking about keeping the gas tax and doing something else? You know, Lee, I think that most likely we'll see the legislature recommending income tax reform rather than giving back the gasoline tax. It's more impacted by the people of New Mexico because so much of the gasoline tax is collected

from people that are just passing through, and we'd like to see it targeted more into New Mexico, and also you can't necessarily get the big oil companies to pass the tax reduction back to the pockets of the people that pay it. If you'll just compare New Mexico to Colorado right now, we have exactly the same amount of gasoline tax on our gasoline as Colorado does. But gasoline is 99 cents a gallon today in Denver. I think the problem's not with the tax on gasoline, and I think it's with price fixing on gasoline. Yeah, I think there are a lot of people that would agree with you about that. Representative Call, let me ask you about one of the programmatic proposals specifically in corrections. The governor just alluded to more money for education and for rehabilitation programs. I think we all know that that is one of the things that seems to work in the whole problem of crime and punishment.

Do you anticipate that the legislature will perhaps even add to the governor's recommendations there? You know, I haven't looked at the exact specifics of the governor's recommendation in this area, but I'm a great believer that we need to cut out the root cause of crime. It's basically poverty, lack of opportunity, lack of education, fractured families. We need to work on that, and we'll have less prison population in the future, and I really think that I for one will do my best to see that we work in these areas. I think it's really, really not only humanitarian, but it's cost effective too. Okay, Marl, let me ask you, what do you see in this budget and in the governor's program for his last year here in the first term, or this third term for Bruce King rather, that will keep the boom going. We've been very fortunate, as he pointed out, to be on a rising tide here. What do you see in the governor's program that will sustain our good fortune?

Well, in economic development, Roger, the governor is requesting $6 million in implant training, which the corporations in this state tell us is the best incentive they have to come here, other than some tax incentives. In addition to that, there is over a million dollars for high tech conversion efforts at the three research universities, UNM, New Mexico State, and New Mexico Tech. In addition to that, he is proposing the expansion of the Mexico City Office, because as you may know, there's been an increase in exports of 70% in the last two years with Mexico, and because of that success, we would like to add to that office, because it's been very beneficial. There are a number of initiatives, also in the tourism area as well, and I think that this is going to keep going, because a lot of these corporations feed off each other.

As you notice, some of the suppliers of Intel are now moving into Rio Rancho. So we're very confident looking out over the next couple of years that this economic growth is going to continue. Are you as optimistic as these folks in Santa Fe? Well, I have a little streak of pessimism that relates to defense spending, Roger, and I don't think we know for sure what is going to happen to defense spending in the United States, and it is tremendously important in our state, and we have been able to do very well through the last couple of years with Congress cutting defense spending. I would have to agree with Kay. I think we're going to do well assuming that there is no significant change in the federal dollars that come into the state for defense. If there is, then the rosy picture will not be quite as rosy. Another thing we need to remember, our growth is strong and good. We're still 48th in per capita income among the 50 states, so we still have a lot of work

that we need to do on the economy, and as Max was saying, there are a lot of poor people in New Mexico that need some significant help from some programs that we haven't thought of yet, things that we need to do, and it's nice to say, well, I'd rather have that money back to spend on myself, but ultimately we really need to work hard in some of the areas where we have problems of poverty in the state, and that is ultimately going to benefit all of us. Let me ask all of you, Lee Zinc here in Albuquerque and Max Call on K-Mar and Santa Fe, to go from the hard numbers here and the fairly easy subject of budget and spending to the slippery business of politics, a boom economy, a fairly solid base on which to run for reelection, do all of you see Bruce King running and winning, or do any of you see a challenge developing either within the Democratic Party or a plausible challenger emerging among the Republicans, some of whom have already announced.

That's Call. What do you think about that? You know, there's never a lack of political challengers in the governor's race. The Republicans have what, three on board now. The Democrats have a lot of people talking about it, but no one getting in yet. It's not going to be a whole-hump year. It's going to be a real jump ball contest, I think, and it should be to better serve the voters of this state. And, K-Mar, you agree with that, even with a very strong economy, governors all over the nation might give almost anything to be in Bruce King's shoes. Well, obviously, it's beneficial for any incumbent to have a booming economy to run on. So I think that will redound to the governor's benefit. That's not to say, as Representative Call indicates, that there isn't plenty of interest among various people throughout the state. So I'm sure there'll be challenges, and I think the governor will welcome it. Lee Zink.

You think the governor is going to welcome the challenge? I think he might welcome the absence of whatnot today. He might. I've known Bruce for a long time, have a great respect for him. He's the kind of person that people are very comfortable with, and if he has a challenge, I have a feeling he'll meet that challenge. There are a lot of people that are looking around and saying, well, you know, the old guys have had their turn. It's time for the younger guys, and that may be the case, but it may not be quite time yet. I would be very surprised if Bruce doesn't come out on top of the heap. Max Call, I want to ask you also about the politics of the legislature here against all of this backdrop. As you know, there's a continuing controversy about how open or closed the process is there in Santa Fe. The deliberations, often the conference committees that may decide fateful issues in the dark of night, as it were. Do you see an opening up of the process in this 30-day session, somewhat more public decision-making than we've had in the past?

You know, I don't see it. I wish we would open it up more, though. I'm one of the proponents of open meetings. My appropriations committee meets in the open the only time we close is for party couches, if the Republicans want to go huddle or the Democrats do, or the regular exceptions to the open meetings act, such as personnel matters or where you're going to discuss a purchase price or something. But we, in the appropriations committee, we open up, and I wish the conference committees did too. Okay, Marl, let me ask you about the governor's position on that issue. The administration's position. Are you generally in favor of a more open legislative process? Well, certainly. I mean, I've always had to operate in that arena, and I frankly think it's beneficial because I think it makes you more cautious about the decisions you make, and I think it forces you to take a little more time in making those decisions.

So certainly from the executive side of the street, and I wouldn't speak for the legislature on this, but from our point of view, we feel like we've always been subjected to scrutiny, and I think it's a very healthy thing. Just a few seconds left, Max Call, tell us where the first real test is going to happen here. What should the public look for as a kind of watershed event early in this session, something that they can make some judgment about? Well, I think that we in the legislature are going to approach budgeting a little differently than the governor's recommendations. We're going to try to not spend it all this year or give it back, and the governor's proposals is either put 10% more in the loop and give the rest back in tax reductions, and we're going to look for maybe three years out and try not to spend quite as much this year and have some more left for the future years. For example, even if we take Lee Zanks and K-Mars growth estimates for next year being about 6%, if we spend it all

this year, that wouldn't be enough, because it's going to cost about 125, may end just the doors at a level plan field, and we'd be facing a tax increase if we adopted the governor's proposal for this year. Well, we'll be looking for a representative call at that emerging controversy. Thank you very much, Representative Max Colton, Santa Fe, and Secretary K. Mar both from Santa Fe there, and thank you, Lee Zank, at the University of New Mexico. And thank you for joining us for this special K-Enemy report on the governor's state-of-the-state address. For K-Enemy, I'm Roger Morris.