Report from Santa Fe; Edward J. Lopez

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Ladies and gentlemen, the following report from Santa Fe was videotape for showing at this time on Monday, January 9th with State Senator Edward J. Lopez, Majority Leader of the New Mexico State Senate. Senator Lopez died unexpectedly early Friday morning. We're airing this telecast out of respect for Senator Lopez's long service to the state of New Mexico in both the House and the Senate. His loss will be felt by the entire state of New Mexico. I'm Ernie Mills. This is report from Santa Fe. I guess today State Senator Edward J. Lopez. Eddie, thanks for taking the time today to visit. This is a busy time. Sessions underway. You and I talked frequently, probably more often during the interim periods, legislative periods than we do during the legislature because you're the Senate Majority Leader.

Well, let's stop for a moment. Tell our audience what is the role of the Majority Leader? Well, the Majority Leader is basically the individual who is in charge during the session on the floor. Basically has the same responsibilities as the speaker of the House and that he assigns the various bills to committees, runs the clock by running the clock, we mean we set the agenda and schedules, say what time we convene and what time we recess and when we go on the floor, et cetera. So it's pretty much you. You help keep order in the upper house during the session. It's really between you and the Lieutenant Governor to try to make sure there is order in the upper chamber. Well, to agree that's true, the Majority Leader's another responsibility is to make all the necessary motions that keep the session running properly and make sure it's done according

to the rules and that people adhere to the principles that were obligated to abide by. You know, I can see you starting to smile because I did a Sherwood Walter Bradley, Lieutenant Governor and he had moved from a member of the upper house and is the presiding officer over the Senate and he was laughing as he told me by getting shoot out by former Lieutenant Governor Jack Stall who stopped him one day on the floor and said, look, when you talk, you go through me, you don't talk directly to another member and he was laughing because he said you suddenly realize the order that's necessary to understand the rules of order in the upper chamber. But what you and I talk about mostly is what happens during the interim period. I counted up 11 separate press conferences called for the first two days of the legislative session. I've always felt that if someone has to wait to get a message across those first two days, they're sort of out of it.

You have served literally with the person responsible putting together the revenue stabilization and tax policy committee. I still call the old tax study committee. That probably is the most critical interim committee that meets in my book outside of the standing committees like the LFC, the legislative finance committee. How many times did your committee meet during the interim period? You have a rough, rough case. Yes, Ernie, we would, on the average, meet monthly three times, three days a month every month and towards the end, I think we met twice monthly. Now, you took your meetings all around the state, didn't you? That's correct. We started out with meetings in Farmington and went on to Hobbes, Las Cruz's, Tows, Santa Fe. Now, I want you to give me a little rundown on the kind of measures that come up before that committee. I know you look at oil

and gas, the extractive industries, a lot of bills affecting the motor transportation committee. So, what I see is during a legislative session, like this one, the headlines seem to go to the emotional issues. Will the governor, will he not try to address the problem of drive -up sale of liquor and, you know, drive -up windows, whether or not, how far they get involved in the gambling issues, and yet the meat and potatoes of a session, the funding of state government and education for the next fiscal year. But it was a rundown on the kind of issues that were addressed, and what you would consider your priorities. Well, you know, what we have done over the years is try and address those issues, which are really in the forefront during that particular time, and issues change based on our economic conditions. The committee has traditionally been very conservative, and I don't think in all the years

that I've served on it, and that's been since its inception that we've ever recommended, a tax increase of any kind. Normally, it's trying to stabilize revenues, find revenues without having to increase taxes, and also do what we can to enhance economic development in the state by virtue of streamlining our structure. This year, for example, we were extremely concerned with oil and gas issues, because as most people know, that's where the bulk of our state revenues come from. And we were facing some tight budgetary constraints, so we took a close look at those issues. You say most people, I think most people don't know it. You know it in the business, but that is the big bulk of the money. It's a very large portion, and our grocery seats tax has really funds government and education. But we did take a real close look at

that. It spent a lot of time on it, and we found that New Mexico has been a sidestep purchase of our natural gas, because the markets are going elsewhere, and we're having a hard time getting pipeline facilities to ship it, especially to East Coast. So the committee recommended a study be conducted on what it would take to build a new pipeline with the state participating possibly through the state transportation authority to start shipping some of our natural gas. East. How far would our participation be in the pipeline? We just go say from Lee County to... from, say, San Juan Basin to a state line. And tie it into an existing pipeline, which goes east. Is the eastern part of that pipeline already taken care of, in other words, on the Texas side? So we wouldn't have to worry. We wouldn't get out there and find no pipeline.

Yes, and most of our pipelines, I mean, they're in trust interstate pipelines, and they go east -west, but most of the two major pipelines we have in this state are dedicated to serving the West Coast California market. And our California market is drying up very rapidly, because they're bringing down a lot of Canadian gas. If someone hasn't got a background in that business, then you realize this doesn't go just from year to year. The decisions that are being made are long, are long -term. That's correct. They talked about Canadians suddenly having money to invest. And if you were not aware of the problems, the extractive industries face, you wouldn't realize that you suddenly found them saying, hey, we're going to try to tap into the California market, sir. Well, we're competing with the Canadian market, and in reality, we're also competing with the Canadian government because they subsidize their industries, the Canadian government. And so, whereas our aren't subsidized by the government,

as a result of being subsidized, they can produce and deliver their product much cheaper than we can. So they are very competitive, and it is hurting our New Mexico gas sales to the West Coast. You know, I had a Santa Fe in magazine that an article on me recently. I said I read like an obituary. I was almost embarrassed. I was very, you know, I was quite flattered and also very accurate. But I chuckle over one item because the young man I talked to had asked me about our relationship, and again, I was talking about the value of interim work. And I told someone once, I said, if you don't work the legislature year round, you make it very difficult. Everyone, we would get maybe, I remember the days, we'd get 300 bills during a 30 -day session. Now we get almost as many bills, you know, as you would in a regular 60 -day session. But I mentioned at the time, I said,

you've got to know these lawmakers and catch them when, you know, when they're not looking at that onslaught of bills. And he said, I know every lawmaker by his name, and you had walked by and you said, hello cowboy to me. And I said, I said, and he said, who is that? And I said, that was the man you're going to testify before tomorrow. So the important thing was whether he knew your name, rather than you just knowing their name, you're not a crybaby. It's interesting that I have watched the business community, for example, almost ignore your position when they're giving out plotlets. And I'm going back now, I think it's more recognized now than in the past. But here, Governor Gary Johnson gets the headlines for saying, I don't want any increase in time. No new taxes. But you just said, you're committee to your knowledge since its inception. The interim committee has never recommended an increase in taxes. Or not certainly not many, is that correct? It's not any. In fact, over the years, we've recommended and pushed through a lot of tax decreases. And the other hand, I've never had you,

despite our friendship. I've never had you come crying to me and say, they're not giving me... It doesn't bother you, it doesn't bother you. And I guess the media especially in any and the business community to some degree have a tendency to label people just automatically if you happen to be Democrat from Northern New Mexico and Hispanic, your categorized as being a left -wing liberal. And I find that most Hispanic legislators up here are very conservative. They may be liberal in certain issues of funding for programs and education, things like that. But they might be in large a very physical conservative. Well, you know, now, we're very looking at this. The governor came out early on. And when changed, I find... You've got to remember what my job security is. And he's interesting. He talked about the closeness between the overall budget

being proposed by the legislature, the LFC, and the budget he's proposing. Now, that's fine. And he's actually going to put up a system where people can see whether there's too much movement. Well, there's a fallacy in that, Ernie, in that, okay, everybody knows how much money's out there to spend. So he comes out with his budget. LFC comes out with their budget. You're talking the same dollars. The difference is where you're spending those dollars. Inside the package, where it gets the money. The dollars are going to be the same because that's the money that's available. Within a few $100 ,000, a few million dollar estimates. It's where your priorities are. Now, if he's putting his priorities into areas of, say, tourism and advertising and things like that, which is fine. But, and at the same time, he's ignoring education, then that's not fine. There has to be a balance. And you have to shift those monies and put them where they're

needed the most and allocate them properly. That's where the difference is. It's not the dollars you're spending. It's where those dollars are being spent. You know, now, I want to go back again, if I can, to that Revenue Stabilization Committee. Because when lobbyists, for example, there were a couple of people like Doc Wilder, Bob Gold, that said for years, said, you know, I remember when they talked to the Association of Commerce and Industry, and said, this is a man who understands your problems because you were in business. You know, you didn't have handout jobs. And if we look at the priorities now that lawmakers have up here trying to, you know, to recognize the conservatives and non -conservatives, you also have to depend upon the accuracy of the money predictions on revenue coming in. Is there some reason that the people in government have been able to have why, for example, would we have the revenue shortfalls that we've been faced with this last year, for example? Well, as you know, revenue projections are looking into a crystal ball, and it's an educated

guess. As best as you can determine based on economic indicators and economy and forecasts. And as a result, you know, and you're trying to predict a year ahead of time, how much money you're going to have the following year, they normally try and be very conservative so that they do make a mistake. It's not that large. And they just overestimated the revenues. They predicted there would be much higher than they actually were. It wasn't a large year. I think it was probably less than 1%. Yeah, this is pretty tough. That's a good figure. But it's a lot of millions of dollars when you're talking about a $2 billion budget. Now, you and I don't go back to before you looked at a million dollar budget. Yeah, when I started, we were pushing just about 200, about 100 million a year. Yeah, and I was approaching well over two billion. That's right. So the

costs are up there, the bucks are paying. And New Mexico doesn't always turn around as fast as other areas. And I'm thinking of the areas of the country. When things are looking well elsewhere, it takes a while for us to get the benefit. Things get bad. It also is a little longer to turn it around there. What problems do you see in trying to address what's coming down from Congress? Well, the first problem is we usually don't know what's coming down yet. And I think everybody's really concerned mostly about the block grants. And what's going to happen to that? And grapevine and rumor has it that it's going to happen eventually, but not this year. So I don't think we have to worry about it this year. But hopefully, when it does happen, we'll have a better handle as to what's actually coming down and be better prepared to handle it. Now, if I wanted to make, let's look at some crystal bowl items. It was pretty easy to predict there was going to be no special session before this session

got underway. Do you have any feel for a special session afterward? And I'm not looking prime and just like it gaming to make adjustments fine -tuning in what we come out of this session with. I don't think so, Ernie. You know, there have been a lot of hype about our condition as far as money is concerned. Also about gaming. And I say just as another normal routine session, we just go in there and do what we need to do to the best we can. And do what we think is right for the state in New Mexico and go home and look the man upstairs to do whatever he thinks he needs to do. You know, every time we finish the session up and we have one of the nice things about knowing each other as long as we have. Usually, we'll finish a show like this even when you look at me and say, you know what, you really messed up. You should have asked me this or you'll watch another show and said, that was pretty stupid. You overlooked that completely. What do you think that

we're overlooking and looking at a session like this? Well, I think there's been too much emphasis put on the governors, vetoes, the petty stuff, the sensationalizing of stuff that really isn't going to really affect the public immediately now or down the road. I think they're boring. Nobody likes to sit down and take the time to sit down and dissect and analyze them and figure out what's happening. But there are issues, for example, over the years we've had tons and tons of money through our severance tax to address capital projects. Not only for state government, but for education, for local government, cities, counties, that money's dried up. So now they're looking towards the finance authority to fund these projects. And at the time that finance authority was

created, it was even vetoed once by the governor and by the governor king and then we passed it again and he finally signed it. But nobody understood at the time the long range need and here it is now that that day has come and it came a lot faster than we predicted it would. The finance authority is the only vehicle in government that is allowing cities, counties, and other governmental entities to progress by fire trucks, ambulances, police cars, do infrastructure, sewer, water, everything. That's the only thing that's in place right now. And on this one you can't pick on me because I do know that was one of the thing when they first state senator Edward J. Lopez, Eddie Lopez was the one who originally came up with the mortgage finance authority. At the time I said I hope you fellas know what you're doing. This could be when you get a finance authority of any kind, it could be one of the most powerful forces

in state government. I watched what happened back in New York when the original tribe or bridge authority was put together and literally just was responsible for all of the improvements New York ever made and things like the bridges, parks or recreation. But that was your baby. You thought that went alone to get that and I went a little background today, the mortgage finance authority. How was it doing? And when you came up with that idea, you started that as a loan battle, did you? That's correct, Ernie. And that was back in 74 and it's basically to provide housing for moderate and low income people. And as I understand it, since then it's said right in over a billion and a half dollars of money. Whether it be for our state, from all straight in, from bond markets into New Mexico, for the purpose of providing housing and it's help construction, it's help the financial institution, most of all it's help the people. And I think there have been about 55 to 60 ,000 homes, people put into homes. 60

,000 or so homes through that program. That's 74. This is 96. What's the future look for the mortgage finance? I think it's going to be there for a long time. It's working well. It hasn't cost the taxpayers one dime. There's no state appropriation. It's strictly self -supporting. And of course, it becomes more lucrative as interest rates rise. And interest rates are low. It's not as lucrative, but it's still functional and it's still helping. All right. Stop with that. When you came back in with the New Mexico Finance Authority, I probably would have changed the name on it completely. So there's less confusion between the mortgage finance authority and the finance authority. They are completely separate. That's correct. Now, you didn't have as much trouble getting that passed. You had the mortgage finance authority. Originally I did. I had quite a bit of like work to do with especially the other side of the aisle who didn't understand the concept and thought it was going to be

some real horrible scheme that was going bankrupt the state of New Mexico. And then of course, for some reason, some folks in the governor's office thought it was going to maybe take a little bit of their power and authority away so they were opposing it. And so originally I had to water it down a little just to placate some of the opposition. And then of course, the governor vetoed it the first time I came back the following year and reintroduced it straight, tightened it up and strengthened it a little. And the governor agreed to sign on it, which he did. It's been an operation about just a year now and it's often running and it's going fantastic. I think because in both you and I agree, we look at a session like this and say this one's almost over. You know, so much advanced work, both Senate Finance Committee House appropriations coming in

starting early hearings. You know, this is the bulk of the session work pretty well underway. But let's take a moment to explain what the finance authority does in Canada just as if you're explaining it to a dumb reporter. Basically, people come to the authority and they need to build an edifice. They need to put it in the sewer line, water line. They need to purchase equipment. They don't have the cash. And because of our constitution and lease purchase prohibition and the Montagne decision, they can't go out and charge things. So what the authority can do for them is accumulate a lot of small things, or one large one doesn't make any difference in the project and go out on the market and issue bonds at a very low rate because they're tax free, they're government bonds, come back, give these folks the money to purchase it outright the cash. And then with whatever revenue stream they have, they pay back over a period of years,

leave them on of that purchase, which allows them to get it immediately instead of having to save all their money in the bank, a few pennies at a time for years until they've got their $100 ,000 saved up to buy an ambulance. They can have it immediately, things like that. Most big projects are doing millions of dollars in projects and buildings and new workers can't build in an Albuquerque, new cancer center in Albuquerque and the University of New Mexico. So they're doing some real large projects also. I watched these things happen and I sort of chuckled about them because first of all people didn't think you could come up with this kind of a project. I think part of you saying they didn't understand it. I think part of you understand it was they didn't expect it to come from you. And two. And should I ask what's next? Because I look around the state now, I do know there is some funding being made available from the lottery, the state lottery, which is separate from regular gaming,

which can be used, for example, for some school construction. But what would I see next? There are other problems. What are you going to come up with next time? I'm feeling you're going to have. I hope we do come up with something. I don't have anything specific on the drawing board or anything, but I've already looked at it this way. We come into a session and everybody looks at, well, what are we going to do now? We got this much spend. Let's take care of it. Let's spend it. Let's go home. And you've got to look down the road. What's going to happen five, ten years from now and be prepared for that. And that's what I've tried to do is with these, because I knew the severance tax monies were drying up, and it was only a matter of time. And if we didn't have an alternative, we'd be in real trouble. So that's what we are. I'd like to say one thing, Ernie, before we leave here, because I think it's of interest to our viewers here in Santa Fe and Mike constituents, but it's rapidly becoming a state -wide problem. And that's it. During the interim, we did address and spend

a lot of time on the question of the property tax situation, and how it's got not a control. We are coming up with a measure representative, John will be carrying it in the house, and I'll be carrying it in the Senate, to try and fix it as much as possible within the constitutional limitations we have. It's been very difficult to address because of that. But we are coming up with a measure, hopefully we'll, to some degree, help alleviate the problem that people are having in property taxes. We initially looked at it from Santa Fe, but I think when people looked around, for example, Silver City moved in a lot of retirement people, and the town itself has become quite charming. The building in Las Cruces, not the area. Carlsbad. Albuquerque. Carlsbad. Tows. San Miguel County. Starting to feel it. It's spreading all over here. Before it was just the Santa Fe problem. And you need to get that out. And again, the other problem is, and I always notice it, that I hate to say, there's still more than two counties.

It's not just Bernalillo County and the other 32. There are 33 counties in the state, and there's an awful lot of power out there among these other areas. I don't know for today. You're going to enjoy this session, aren't you? I enjoy it more. I really do. OK. You come back for a wrap -up when the session is over. Yeah, I might be happy to any. And you're not going to make me come and beg to say, have you got another mortgage finance authority or not finance authority? I'll tell you about it. If I come up with a new idea, you'll be the first to know. See that. And see, and my business like that, I'd say, I believe every word of it. I want to thank our guests today, State Senator, Edward J. Lopez for taking the time for being with us. Eddie, have a good session. Thank you. I appreciate it. We'd like to thank you for tuning in to report from Santa Fe. Ladies and gentlemen, the preceding report from Santa Fe was videotaped for showing at this time on Monday, January 9th, with State Senator Edward J. Lopez, Majority Leader of the New Mexico State Senate. Senator Lopez died unexpectedly early Friday

morning, and we have aired this telecast out of respect for Senator Lopez's long service to the state of New Mexico in both the House and the Senate. His loss will be felt by the entire State of New Mexico. Report from Santa Fe is made possible in part by grants from U .S. West, providing advanced telecommunication services to New Mexico homes and businesses, and by New Mexico tech on the frontier of science and the engineering education. For bachelor's, master's, and PhD degrees, New Mexico tech is the college you've been looking for, 1 -800 -428 -TECH.