We present, below, our second monthly Q-and-A with Mike Miller, governmental affairs representative for New Mexico for the Permian Basin Petroleum Association. PBOG magazine spoke with Mike on the early activity in the statehouse.
PBOG: Last time we talked, it was before the whole session had started, and the biggest point you made was that this is about funding, and this is about budget, this year. I’m wondering where things may have progressed from that point.
Miller: Let me just say that it’s still that, because, even though we’re in the first two weeks [this interview was on Jan. 31] of the session, for the House and the Senate both, the main focus has been on a solvency for the FY17 budget, the budget that we’re under now. The budget year expires on June 30th. There’s different figures; let’s just say somewhere between 200 and 230 million dollars that they had to find money for, so that we could pay our bills. [Over] the first two weeks of the session… although there’s been a little over 500 bills introduced already in this session, and they have until the 16th of February to introduce legislation, most of the focus has been on this. Frankly, a lot of other bills are not going to do a lot of moving until we get these things done.
All of that said, they finished up this work last week, and then the governor vetoed what we call the Feed Bill. That’s the bill that pays for the legislature, and all of the legislative staff, both full-time and part-time.
PBOG: What do you mean by the “Feed” Bill?
Miller: It’s Senate Bill 176, but it’s referred to as the Feed Bill, because that’s what “feeds” the legislature. Until they work out this, none of the legislative staff can be paid. [This is] unlike [the way things are] in Texas. Most of the legislative staff working during a session is volunteer staff. Well, not volunteer staff, but part-time. They’re not regular state employees. They’re up here, they’ve got motel bills to pay, they’ve got this and that to pay. They can’t get a paycheck until this is worked out between the governor and the legislature. That’s it.
We have the FY18 budget, that they have to craft. Because they filled so many holes, and they’ve done this, and they’ve cut this and that, that task is not going to be easy. It’s probably going to end up being contentious, because some groups are going to want to cut here, and do this and do that, and other groups will want to raise taxes to fill the shortfalls. The governor has pledged she will not sign any tax bills.
All of that being said, most of the long-time observers don’t see a whole lot coming out of this legislative session.
PBOG: That’s still news. That’s important.
Miller: Like I said, we’re tracking … The PBPA [Permian Basin Petroleum Association] right now is tracking 24 bills. I’ve been working on something else this morning. I’m probably going to add a few bills to that [to the list PBPA is tracking]. Some of them are kind of sit back and watch; a couple of them had to do with electricity, and first right of refusal. There’s four bills with regard to the remediation of that Carlsbad brine well. I don’t know if you have heard much about that.
PBOG: Heard of it.
Miller: And there are the usual bills that we’re tracking; some tax bills that impact industry, that sort of thing.
PBOG: Has the fact that we’ve got a Republican in the White House, and the changes that we’re seeing there… can you see any mood spilling over into this legislature because of what they’re dealing with on the federal level?
Miller: I can tell you the federal Democratic legislators have invited the president of Mexico to come to New Mexico.
PBOG: Wow. Democratic?
Miller: It’s a slap at the Trump Administration.
PBOG: I see.
Miller: He won’t come and visit Trump, so they’ve invited him to come to New Mexico.
PBOG: They can throw that back at him.
Miller: Right. I don’t know what’s going on with that. I try not to pay a whole lot of attention to that sort of thing. Obviously, some of those things impact us, because one of the big things that is costing New Mexico a lot of money is our Medicaid budget. Our governor chose to do the Medicaid expansion, which the federal government paid for for so many years, and now the expansion little by little becomes more the responsibility of the state. That is causing some consternation with the budget crafters.
PBOG: I can imagine.
Miller: Not knowing what’s going to happen at the federal level with the ACA, which the Medicaid expansion is part of… I know this doesn’t have anything to do with oil and gas, but it does have to do with what is going on in the legislature. You realize still that the majority of these issues are caused because of the reduced price of oil and gas in New Mexico.
PBOG: I think that, just from what I can see of the Trump Administration, that if you’ve got legislators who are adversarial to oil and gas in New Mexico, that I would think that it takes a little wind out of their sails. If they’re looking to lay more taxes on oil and gas, or to somehow cut down on oil and gas activity, or do anything like that, it seems like they’ve got a bigger load to deal with [with a Republican Administration in place].
Miller: I believe that is pretty true. I don’t want to make any bold predictions, but I do think that at the end of the day, that we’re not going to see a whole lot out of this legislature. I don’t think we’ll see anything positive for the industry, just because it’s a Democratic-controlled legislature. Again, by the same token, I don’t think we’ll see anything adversarial come out of this legislature.
PBOG: It could be a situation, perhaps, where no news is good news.
Miller: We all know that things can change on a dime when the legislature is in session, so keeping that in mind, we’re being vigilant. We’re tracking bills as they’re introduced, and the PBPA has formed a legislative committee specifically for New Mexico, and we’re meeting weekly.
PBOG: I think it’s interesting. I think oil is in a place where they don’t need bad news, and it doesn’t sound, like you said, that anything seriously adversarial will come out of this. I think that’s good news.
Miller: Again, I say that very cautiously, because things can change in a hurry.