Now retired and living in Santa Fe, I was curious to get his thoughts on the governor’s race. According to an Albuquerque Journal  poll released Aug. 29, Republican Susana Martinez has a 6-point lead on Democrat Diane Denish. A Rasmussen poll released two days earlier has Martinez up by five points.

Coll — who is pulling for Denish — says the Lt. Governor should have tried to separate herself from current Gov. Bill Richardson in a more pronounced way earlier in the campaign:

Coll also says that Richardson’s precipitous drop in the polls (the Journal survey showed just one-third of New Mexicans approve of the job Richardson is doing) is due in large part to Richardson’s presidential ambitions. Coll also says Richardson has kept a low profile in the past year to avoid troubling questions about his administration. Here’s the entire Coll interview, in which the former legislator also talks about negative campaigning and the outlook for Democrats in November:

I plan on talking to a retired Republican legislator on the November elections and will post that interview soon.

Here’s the New Mexican article and here is what the Journal wrote. 

On Tuesday night, KRQE-TV in Albuquerque ran its version as the lead story on its 10 pm newscast.

The story has also been picked up on a national level in Virginia and we’ve been told that a public policy reseach institute in Louisiana is preparing a story. 

The poor folks in Louisiana finished worst in the rates of overpayments, fraud and what is called “Operational Rate” — which reflects the number of appeals, fraud, determinations and changes.

New Mexico finished third, sixth and tenth, respectively, in those three categories.

Bruce Malott, former ERB chairman

Bruce Malott – the man who resigned his chairmanship of the state’s teacher pension — said in a phone interview Thursday that “I have no embarrassment of how our fund performed in relation to our peers. It’s been phenomenal.”

Malott stepped down Wednesday (Sept. 1) after the Albuquerque Journal revealed that Malott received a $350,000 personal loan from Anthony Correra, a close associate of Gov. Bill Richardson and an investor who lost his license from the securities industry because of allegations of insider trading.

Correra loaned Malott $350,000 when Malott — who is a principal at an Albuquerque accounting firm — racked up hundreds of thousands of dollars in taxes after the IRS determined that a tax shelter that Malott and others participated in had no legitimate business purpose.

The Journal reports that Malott’s $2.500 monthly payment went into the account of a woman who had a son out of wedlock with Correra and their son.

You can read the entire Journal article here.

During Thursday afternoon’s phone interview with Capitol Report New Mexico, Malott staunchly defended his tenure at the Educational Retirement Board (ERB), saying in 2009 and 2010 that “overall ERB, is in the top 2 percent of all funds in the United States,” referring to pension plans that total more than $1 billion.

However, the ERB and the State Investment Council (SIC) invested in Vanderbilt funds, which led to a $50 million loss for the SIC and a $40 million loss for ERB. Malott admitted that the Vanderbilt deal was a “bad investment” but said that relative to other pension funds, the ERB withstood the calamaties that befell other funds, saying that the ERB performance “in the last five years has ranked in the top 18 percent.”

“I’ll say this on the record,” Malott said, “I’ll miss my time at the ERB very much. It’s an outstanding board.”

People close to Malott insist that he was not pressured to resign by Gov. Richardson and that Malott stepped down because he didn’t want to become a distraction for the ERB.

At the state Capitol building, lawamkers were shaking their heads after reading the details of Malott’s resignation in the wake of the Correrra loan. “It’s appalling,” Rep. Keith Gardner (R-Chaves, Eddy, Lea, Roosevelt) said as he entered the chambers of the Health Care Reform Working Group. “Just when you think things can’t get any lower …”

Malott has had to defend himself in a lawsuit brought by former ERB investment officer Frank Foy. Malott has strongly denied any charges of corruption but he has run up at least $300,000 in legal fees.

Back in June, members of the Legislative Finance Committee were surprised to learn that under current statute, members of the ERB can be indemnified of legal costs as well as fees of “any other nature” when mounting a defense in a lawsuit. Committee members were angered to learn that the stipulation “of any other nature” could mean that the state (taxpayers) could be on the hook not just for Malott’s legal team but for a public relations firm he has hired. Here are the details from that June meeting.

Here’s what Rep. Larry Larrañaga (R-Bernalillo) said at the time:

The Journal story mentioned that Malott was accompanied by four attorneys and a publicist at Wednesday’s two-hour interview.

Malott said Thursday, “I have not received one cent” from the state as any reimbursement has not formally applied for compensation. When asked if he will charge the state for the costs incurred by his attorney and publicist at Wednesday’s Journal interview, Malott said, ”No.”

 Reached at his home in Deming, John Arthur Smith (D-Deming), the Vice Chair of the Legislative Finance Committee did not dispute the figures Malott cited but said, “I think Bruce’s credibility is questioned when he does business with someone (Anthony Correra) whose reputation in the state is up for debate … Where there’s smoke, there’s fire.”

Update: Here’s more from Steve Terrell of the Santa Fe New Mexican:

Denish to Donate Malott Money to Charity — But Not $$ From Malott’s Company

Johnson may be a longshot because of his low name-recognition across the country, but with the economy spinning its wheels, Congressional approval ratings for both parties in the dumper and a feeling by some that a libertarian mood might be on the rise, Johnson might just make a few waves.

He’s spent a lot of time in Iowa (home of the presidential caucus), New Hampshire (home of the famous presidential primary) and South Carolina (home of another early primary) this summer. And yesterday, a newspaper in the Quad-Cities of Iowa ran this profile on him.

The key paragraphs:

In an interview with the Quad-City Times editorial board, he suggested the current crop of Republicans considering presidential bids wouldn’t be as determined about cutting spending.

“I think they would all talk about lowering taxes and reducing spending. But when it comes to specifics, ‘Gee, no, not when it comes to Medicare. No, not when it comes to Social Security. No, not Medicaid. No, not defense, certainly,’” he said. “That doesn’t get it.”

Johnson said those areas are where government needs to look, and he noted he liberally used the veto pen as New Mexico’s governor (750 times) allowing him to hold spending down and prevent tax increases.

Federal domestic spending increased a record 16 percent to $3.2 trillion in 2009, the Census Bureau reported Tuesday, largely because of a boost in aid to the unemployed and the huge economic stimulus package enacted to rescue the sinking economy.

The rise in spending was the largest since the Census Bureau began compiling the data in 1983. The Washington region was among the biggest beneficiaries of the government’s spending.

With congressional elections looming this fall, the spike in federal spending has emerged as one of the nation’s most contentious political issues.

You can read it (and weep) here.

On Tuesday night, KRQE-TV, Channel 13 in Albuquerque ran it as the lead story at 10 p.m.

As mentioned in our post, the Department of Workforce Solutions (DWS) stresses that the US Department of Labor cautions making apples-to-apples comparisons between states in regards to unemployment figures. DWS officials want to stress that the $97.8 million figure (ranking New Mexico third in the country in overpayments) is an estimate.

Furthermore, Carrie Moritomo of DWS told Channel 13 that the really important number is $22.5 million figure that makes up what’s called the “operational rate.” Moritomo told KRQE-TV, ““Those would be true people who had determinations, appeals, changes or committed fraud.”

Okay, even if you look past New Mexico’s No. 3 national ranking in estimated overpayments and the state’s No. 6 ranking in fraud, let’s take a closer look at at that $22.5 million operational rate that DWS wants to emphasize.

Here’s how New Mexico ranks on a state-by-state basis on the operational rate, as compiled by the US Department of Labor:

The state comes in 10th.

Here’s the list of the 10 states with the highest operational rates in 2009:

1. Lousiana 14.66%

2. Oregon 9.91%

3. Arizona 9.23%

4. Arkansas 9.11%

5. Mississippi 8.68%

6. Illinois 7.73%

7. Kansas 7.34%

8. Nevada 7.30%

9. Delaware 6.73%

10. New Mexico 6.61%

So, whether one looks at any of the three categories for unemployment figures, New Mexico is in the bottom 10 in all three. You can view the raw data from the US Department of Labor here.

I point this out not to hammer the people at DWS or to advocate for a policy position (I don’t know enough about unemployment administration to even form an opinion) but to merely follow up on a national story (AP’s story that came out last month reporting that US states overpaid an estimated $7.1 billion in unemployment benefits in 2009), investigate how New Mexico fared in relation to other states and let the facts dictate the results.

Sandoval County Administration Building

Now it’s happened again — this time in Sandoval County. County taxpayers just funded a beautiful, state-of-the-art government center off Route 528 called the La Plazuela de Sandoval. It’s home to a district court, a sheriff’s office, an administration building that provides office space for county offices as well as a number of health facilities.

On Aug. 19, the Sandoval County Commission voted to name several sections of La Plazuela after six members of county government who were working for the county during the planning and construction of the facilities — one of whom is still a current member of the board.

Two county commissioners (Glenn Walters and Darryl Madalena) dissented, saying that there should have been at least some more discussion about the issue but were voted down, 3-2.

So now La Plazuela is home to:

The David Bency Community Room

The Daymon Ely Transit Center

The Jack Thomas Health Commons

The William Sapien Veterans’ Outpatient Clinic

The Elizabeth Johnson Commission Chambers

The Debbie Hayes Atrium

Bency is still a member of the Sandoval County Commission.

The move prompted the local paper, the Rio Rancho Observer, to publish an editorial criticizing the move since the vote “did not involve a scintilla of public input.”

I interviewed the Observer’s managing editor, Tommy Trujillo, who wrote the editorial. Trujillo said his newspaper normally doesn’t wade into such issues — “our interest is not to stir up the community,” he said — but felt that the commission’s actions needed to be addressed because “as our editorial said, it breeds further mistrust of government leaders.” You can read the editorial here.

“Surely there were people more worthy of this honor,” Trujillo said, “such as veterans for their service to their country or others for their service to the community.”

By the way, this is not the first time local officials named a public facility after a public servant.

V. Sue Cleveland High School, Rio Rancho, NM

Dr. V. Sue Cleveland, Superintendent of Rio Rancho Public Schools

The newly constructed Cleveland High School is named after Dr. V. Sue Cleveland, the superintendent of Rio Rancho Public Schools. Here is the Rio Rancho Observer story about how the naming came about.

It colors every discussion at the Roundhouse and since states must balance their budgets each year (unlike the federal government, which can print more money or push budget-balancing to another year), it means there will be wailing and gnashing of teeth in Santa Fe when the next legislative starts.

But New Mexico is not alone as nearly every state in the US is facing budget crises of varying degrees of severity. Sure, the economy is struggling but why is nearly every single state in a financial hole?

While everybody understands the importance of money, getting a clear understanding on why and how a complex financial system performs — or fails to perform — can be frustrating. That’s why a recent paper by Matthew Mitchell of the Mercatus Center at George Mason University in Virginia gives us some moments of economic clarity.

Mitchell — who happened to grow up in Albuquerque — just completed “State Spending Restraint: An Analysis of the Path Not Taken,” a look at 14 states and their recent budget histories. The first part of Mitchell’s paper is of particular interest for those trying to get a grasp of how the numbers begin to grow and grow, snowballing so that they almost inexorably send states into the red.

First, Mitchell points out how much state and local government spending has expanded at a much higher rate than the private sector:

Mitchell writes that:

Because state and local governments depend on the private sector for their tax revenue, this path is not sustainable; state and local government spending cannot continually outpace the wealth-creating sector of the economy. Second, note that the gap between state and local spending growth and private sector growth has widened in the last decade. From 1950 to 2009, real state and local spending grew at an average annual growth rate of 4 percent, compared with 3 percent in the private sector (a 33 percent difference). But from 2000 to 2009, state and local spending grew at an average annual growth rate of 2.6 percent, compared with 1.4 percent in the private sector (a nearly 90 percent difference).

On top of that, Mitchell breaks down exactly what states are spending their budget dollars on. It’s telling there is little aggregate difference between 1987 and 2009 except for one thing — Medicaid spending, which has more than doubled:

Medicaid spending is one factor that all the states struggling with budget deficits have in common. Why? Because of the way the system is structured. Since its inception in 1965, Medicaid has been a joint program between the states and the federal government. The Medicaid bill is split between the feds and the states but the federal government ends up picking up more than 50 percent of the tab (and in smaller states, the feds pick up an even greater percentage). Under the Medicaid system, states receive one dollar from the feds for every dollar they spend. It’s open-ended, with no limit and if states add additional programs (such as a prescription drug benefit) the federal government must match the amount states spend on that new program dollar-for-dollar.

The result is states have a fiscal incentive (or at least no disincentive) to expand coverage and options.

Those are the cold, hard financial numbers — it’s up to lawmakers and voters to determine whether these costs should be curbed, slowed or even expanded. But Mitchell’s paper gives you — regardless of political leaning — some perspective on why states find themselves in a financial bind.

You can read the entire paper, plus Mitchell’s analysis of 14 different states and his suggestions for how they could have reduced their fiscal burdens, here. And here’s a critique of the Medicaid system from the City Journal, a magazine published by the Manhattan Institute, a right-of-center think tank in New York City.

For Heinrich, he knows he has the lead — something that Democrats need in this year of anti-incumbent sentiment. Heinrich also has a 45-41 lead among independent voters.

As for Barela, being within 6 percentage points is a pretty good spot to be in, considering that his name recognition does not compare to an incumbent’s. In addition, Barela received support from one-third of all Hispanics surveyed — a solid number for a Republican.

But keep this in mind: Heinrich has a big lead on Barela in money raised – $1.3 million to $537,000.

Here’s the Journal’s story on the 1st Congressional District poll.

In the 2nd Congressional District race, incumbent Democrat Harry Teague leads Republican Steve Pearce 45-42 — within the margin of error of plus or minus 5 percent.

Teague has been considered one of the most vulnerable House Democrats in this fall’s election but according to the Journal poll, he’s holding on to 76 percent of his party’s voters and holds a 37-33 edge among independents.

Unlike Barela, Pearce has held his own with Teague in fundraising. In fact, in the most recent quarterly report released by the Federal Election Commission, Pearce outraised Teague by $14,000.

Here’s the complete Journal story on the 2nd Congressional District race.

Update: On Tuesday (Aug, 31) the Journal poll on the state attorney general’s race shows Democratic incumbent Gary King ahead of Republican Matt Chandler 48-33, with 19 percent undecided.

Last month, the Labor Department released national figures estimating that the country overpaid by $7.1 billion in unemployment benefits for the calendar year 2009. That caused me to wonder how New Mexico fared in relation to other states. The Labor Department needed a couple weeks to complete its state-by-state breakdown and now the numbers have been released.

The results? New Mexico ranks third in the country in the percentage of unemployment overpayments, with some 28.68 percent ($97.8 million) of the total benefits sent to New Mexico unemployment recipients should not have been delivered. Only Louisiana and Indiana had a worse percentage.

And New Mexico sixth in the nation in the rate of fraud for unemployment payments, with $16.8 — or 4.93 percent — stripped from the state unemployment insurance fund in 2009.

Why are the numbers so bad?

Carrie Moritomo, the public information officer for the agency that handles state unemployment claims — the Department of Workforce Solutions (DWS) – says, “I would need to do further research but I would caution you by saying that this not a straight, apples to apples comparison. One state’s laws in this regard are not comparable to another … I don’t think this is a fair assessment. State laws are different across the board.”

And in fairness to the DWS, the Labor Department’s statistical chart states that “Readers are strongly cautioned that it may be misleading to compare cone state’s payment accuracy rates with another … No two states’ … are identical and differences in these conditions influence the potential for error.”

But at the same time, nearly $98 million in overpayments and nearly $17 million in fraud does not look good.

One of the primary reasons for fraud comes from people who keep accepting unemployment checks once they land a job. Many recipients think they can keep receiving benefits until they get their first paycheck at their new job.

Sorry, but the moment you start a new job, you become ineligible for unemployment benefits.

Charles Mather of DWS said, “Some people will even go 10-15 weeks (collecting unemployment as well as paychecks from a new job). Some of the excuses we get is that they feel they just have to catch up (on bills and such).”

So are some New Mexicans simply more dishonest than most Americans? Who knows, but Mather and Moritomo said that the tough economy may tempt some to cut corners. After all, Moritomo points out that in September of 2008, the state’s unemployment rate was at 4.0 percent. Last month, it more than doubled to 8.2 percent.

On top of that, the Labor Department numbers look even worse for New Mexico when you compare the 2008 statistics with 2009.

Take a look:

Total unemployment benefits paid out for New Mexico:

2008 $159,630,965           2009 $340,941,021

Estimated Overpaid:

2008 $29,621,122                2009 $97,788,755

Fraud Rate: 2008 4.03%                    2009 4.93%

Note that the total amount of benefits more than doubled, showing how much the weakening economy hurt people in the state.

But the total of overpayments more than tripled. Does that indicate that more New Mexicans were cheating the government? Not really because while the sheer number of dollars that were accounted by fraud jumped from $6.4 million to $16.8 million, the percentage of fraud increased from 4.03 percent to just 4.93 percent.

What gives? Does this indicate that DWS is overwhelmed by the sheer number of claims it is receiving? Is it making too many mistakes? Or does New Mexico compile its numbers more carefully than other states, thus leading to a higher rate of detection of overpayments? Moritomo and Mather said they aren’t sure.

One bit of good news: Mather points to a figure called the “Operational Rate,” which the Department of Labor cites as the amount of “what we can reasonably expect to recover,” Mather says. The operational rate for New Mexico is $22.5 million, which the state hopes to bring back to its coffers.

After going through the Department of Labor’s numbers, here’s a breakdown of 10 states (including the District of Columbia and Puerto Rico) that had the best and worst rates of overpayments:

The 10 states with the worst percentage of overpayments:

1. Louisiana 41.55%

2. Indiana 33.26%

3. New Mexico 28.68%

4. Arizona 18.99%

5. South Carolina 17.59%

6. Colorado 16.73%

7. Washington 15.98%

8. Nebraska 15.12%

9. Virginia 14.59%

10. Mississippi 14.21%

And the 10 states with the lowest percentage of overpayments:

1. New Hampshire 2.52%

2. Kentucky 2.54%

3. Massachusetts 2.94%

4. Vermont 3.57%

5. Connecticut 3.81%

6. Georgia 4.01%

7. Oklahoma 4.28%

8. California 5.27%

9. Florida 5.37%

10. Hawaii 5.40%

As for rates of fraud, here at the 10 highest in percentage:

1. Arizona 5.96%

2. Arkansas 5.86%

3. Louisiana 5.71%

4. Puerto Rico 5.36%

5. Mississippi 5.15%

6. New Mexico 4.93%

7. Oregon 4.73%

8. DC 4.70%

9. Pennsylvania 4.68%

10. Nevada 4.16%

The 10 with the lowest rates of fraud are:

1. New Jersey 0.30%

2. Hawaii 0.36%

3. Iowa 0.42%

Vermont 0.42%

Florida 0.42%

6. Colorado 0.48%

7. Maine 0.59%

8. Georgia 0.61%

9. Minnesota 0.63%

10. Michigan 0.74%

If you’re a numbers nerd, you can see the raw state-by-state data here for 2008: http://www.ows.doleta.gov/unemploy/bam/2008/Integrity_Rates-CY_2008-all_states.xls

And here for 2009: http://www.unemploymentinsurance.doleta.gov/unemploy/bam/2009/bam-cy2009.pdf

Once you get the spreadsheet data on each link, look at the tabs on the bottom of the page and go to Integrity Rates Est $ and 95% CI to get the numbers you need.

*****

Update: The story Capitol Report New Mexico broke on Monday (Aug. 30) about the state racking up an estimated $97.8 million in unemployment overpayments is garnering some attention.

On Tuesday night, KRQE-TV, Channel 13 in Albuquerque ran it as the lead story at 10 p.m.

As mentioned in our post, the Department of Workforce Solutions (DWS) stresses that the US Department of Labor cautions making apples-to-apples comparisons between states in regards to unemployment figures. DWS officials want to stress that the $97.8 million figure (ranking New Mexico third in the country in overpayments) is an estimate.

Furthermore, Carrie Moritomo of DWS told Channel 13 that the really important number is $22.5 million figure that makes up what’s called the “operational rate.” Moritomo told KRQE-TV, ““Those would be true people who had determinations, appeals, changes or committed fraud.”

Okay, even if you look past New Mexico’s No. 3 national ranking in estimated overpayments and the state’s No. 6 ranking in fraud, let’s take a closer look at at that $22.5 million operational rate that DWS wants to emphasize.

Here’s how New Mexico ranks on a state-by-state basis on the operational rate, as compiled by the US Department of Labor:

The state comes in 10th.

Here’s the list of the 10 states with the highest operational rates in 2009:

1. Lousiana 14.66%

2. Oregon 9.91%

3. Arizona 9.23%

4. Arkansas 9.11%

5. Mississippi 8.68%

6. Illinois 7.73%

7. Kansas 7.34%

8. Nevada 7.30%

9. Delaware 6.73%

10. New Mexico 6.61%

So, whether one looks at any of the three categories for unemployment figures, New Mexico is in the bottom 10 in all three. You can view the raw data from the US Department of Labor here.

I point this out not to hammer the people at DWS or to advocate for a policy position (I don’t know enough about unemployment administration to even form an opinion) but to merely follow up on a national story (AP’s story that came out last month reporting that US states overpaid an estimated $7.1 billion in unemployment benefits in 2009), investigate how New Mexico fared in relation to other states and let the facts dictate the results.