Replies

Here is an op/ed piece in the ABQ Journal that gives another perspective on his "tax cuts":

Friday, July 25, 2003
Governor Raids Piggy Banks, Gambles on Startups
By John Dendahl For the Journal
    Is he a tax cutter or a piggy bank breaker?
    Gov. Bill Richardson got the national publicity he wanted earlier this year by pushing former Gov. Gary Johnson's personal income tax reform through the Legislature. On top of local stories, there was favorable mention by Rush Limbaugh and the ads New Mexico taxpayers bought in Times Square and national publications.
    Devils always being in the details, most of this much-needed tax relief lies in the future. Unfortunately, a number of legislative sessions lie between now and then. There's plenty of time for a governor and a Legislature dominated by his party (make that "her party" if Richardson splits and leaves the governor's chair to Lt. Gov. Diane Denish) to undo the tax cuts if ends cannot otherwise be met.
    Meanwhile back at the ranch, the ends already won't meet. Financial chicanery was only a few days behind the tax reform legislation. Our piggy banks are under assault.
    First to go was the Tobacco Settlement Permanent Fund, the money New Mexico receives from the global settlement of litigation against cigarette makers. The Legislature created this fund to be invested and earn money in the future for such programs as extracurricular school activities, health services and research into the impact of smoking.
    Poof — it's largely gone. Senate Majority Leader Manny Aragon, D-Albuquerque, sponsored a bill that puts about $155 million of that money, over four years, into the General Fund, and at the disposal of the governor and Legislature to spend. Some permanent fund.
    Next, Richardson got the Legislature to amend the law governing investments of the Severance Tax Permanent Fund to permit speculative equity investments in New Mexico companies. The Albuquerque Journal has reported that $29 million is about to go into: Mesa Semiconductor ($15 million), Eclipse Aviation ($10 million) and PowerWAN ($4 million).
    PowerWAN isn't yet even a New Mexico company, but rather a five-person company in Minneapolis that is expected to start an operation here. Mesa Semiconductor is a management buy-out of the Philips Semiconductor plant in Albuquerque, which Philips planned to shut down. Eclipse, which is developing an executive jet airplane, has generated a lot of excitement, but I would consider an equity investment in the company to be a dice-roll.
    In 1987, I was a member of the State Investment Council, which oversees investments of these permanent funds. I worked hard to get conservative Republican legislators to agree that investment of a small fraction of the Severance Tax Permanent Fund in venture capital pools represented reasonable diversification.
    That's a far cry from making speculative investments in specific companies. Venture capital pools are managed by people with expertise in evaluating the prospects of new companies. Most of their investments crash, but some succeed spectacularly. The pluses and minuses frequently add up to fine overall rates of return.
    Richardson now has New Mexico in the venture capital business, and his directorship in his brother-in-law's scandalously failed company, Peregrine Systems, comes to mind. Does the State Investment Office have the talent to compete with experts in, say, Silicon Valley? Richardson is about to bet $29 million that it does. I think it's a bad bet that New Mexicans shouldn't be making.
    On Sept. 23, a few of us will go to the polls to vote for or against another permanent fund raid. This raid is a proposed amendment to the state Constitution to raise the annual distributions from the Land Grant Permanent Fund. If approved by the few voters who show up to vote, another $75 million or so a year will be available for the governor and Legislature to spend.
    Sen. Pete Domenici, R-N.M., started out opposed to this Land Grant Permanent Fund raid, but turned 180 degrees after some Richardson arm-twisting. Because Domenici has rarely seen a project in New Mexico he didn't like to spend public money on, this is hardly the surprise of the year.
    But the real piggy bank buster is Richardson. Don't bet the grocery money on ever seeing his vaunted tax cuts. Unlike the government in which Domenici serves, New Mexico's is constitutionally required to have a balanced budget. To achieve that, the Legislature will undo the tax cuts long before it stops the spending orgy.
(Dendahl is former NM Republican Party Chairman)
Copyright 2003 Albuquerque Journal

Not at all surprised.

Thanks for the op/ed piece by Dendahl, I missed it in the Journal.

I don't agree with Dendahl, New Mexico has to attract non-governmental businesses. We badly need the jobs and sometimes you have to gamble to succeed. IMO this piece sounds like sour grapes on Dendahl's part.

The PowerWAN concept is especially interesting and fits well with some of my companies abilities, this is a growing market with huge potential. Eclipse Aviation is making good progress and has a good chance of hitting the right niche at the right time. Mesa Semiconductor is in a field that is very close to being ripe.