Pub. 14 2017 Issue 2

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S Issue 2 • 2017 9 are sub-par and generally formed by their local economy and other forces outside of the business. You don’t have to settle for “Mediocracy”. Decide to break out of the ordinary and turn your human resources into generators of improvement, innovation, and regeneration in their work and ongoing increases in business results. This is possible to achieve in any business, even one restrained by severe regulations. During the finale dinner and business session, the NMBA hon - ored Don Kidd, CEO, Western Commerce Bank, Carlsbad, with the NewMexico Bankers Association “Lifetime Service Award”. The NMBA grants this award from time to time to a banker who the Association believes has made a significant contribution to the industry and state. Don served as NMBA president in 1990- 1991 and served on the NMBA Board of Directors for multiple terms. He also served in the NM State Senate from District 34 from 1992-2004. He served on the NewMexico State University Board of Regents from 1985-1991. We call Don a friend, a lead- er and a bankers’ banker. We are proud to have honored Don Kidd with the NMBA Lifetime Service Award during our 106th Annual Convention. The NMBA also recognized Senator Stuart Ingle (R-Portales) as the NMBA Legislator of the Year. The Senator has been responsible for sponsoring a majority of the bank-related legis- lation on behalf of the NMBA including a major rewrite of the state’s antiquated trust and estate laws. Ingle serves as Senate Minority Leader. A special thanks to Jay Jenkins, outgoing NMBA President, for masterminding this year’s convention, including the location, Shane Andrews, the golf tournament, speakers for our education session and special awards. I also want to express our thanks to Jay for the marvelous job he did as our 2016-2017 President. He never missed a NMBA meeting or event. We traveled to Rhode Island, Nashville, Washington D.C., Santa Fe and to ten New Mexico communities on our legislative road trips without a complaint-“all fun” as Jay would say. Under Jay’s leadership, we have increased member engagement in NMBA activities and events and enhanced NMBA political involvement at all levels. He has great passion for the NMBA, as noted in his comments to the audience during our annual convention dinner. He said, “It has been a great pleasure and I amhonored to have served as the President of our association. They say there is power in numbers and our association is built on decades of strong membership representing every area of our great state. The reputation our association carries is second to none. As always, I am proud to be a member of the NMBA and have a deep respect for its traditions, long history and fine reputation.” State Legislature: Governor Martinez called the Legislature into Special Session on May 24 to address budgetary and tax revenue issues. The Legislature completed its special session efforts on May 30 and adjourned hopefully until the next regular session in January 2018. The top priorities for the Legislature to accomplish during the special session were to restore in the state’s General Appropriations Act (HB1), the $766million in funding for Legis- lative agencies and institutions of higher education, and to have a balanced budget for the next fiscal year. The Governor had used her line item veto authority to eliminate all of next fiscal year’s funding for the Legislature and higher education from the state budget enacted by the Legislature during the regular session. You may recall that the Legislature had filed suit against the Governor over her veto of next year’s funding for the Legislature arguing that her actionwas unconstitutional as it was an attempt to defund the Legislature, a separate and co-equal branch of the government. The New Mexico Supreme Court dismissed the lawsuit when the Governor called the Special Session and included in her proclamation funding for the Legislative branch. During the Special Session, the Legislature enacted and the Governor signed SB 1 which increases the general fund by $100.4 millionwith $81.4million in capital outlay swaps and $19million in other state fund swaps. The $81.4 million in the bill includes an estimated $71 million in severance tax bond capacity, and an additional $10.4 million in capacity from suspending the sever- ance tax bond distribution to the water project fund for 2017. It is estimated that interest on $71 million of long-term severance tax bonds, for 10 years at 2.29 percent, will total $9.25 million. The bill will balance next year’s state budget and restore general fund reserves to approximately 0.5 percent. The Legislature also enacted and the Governor signed HB 2 which suspends monthly distribution to the legislative retire- ment fund for 5 years, sending the savings to the general fund for the first 2 years and to the judicial andmagistrate retirement funds for the following 3 years. The distributions are from re- ceipts of the Oil and Gas Withholding Tax Act. The estimated revenue derived per year is $900,000. The bill also creates a rainy day fund by distributing revenue in excess of annual five- year average for the oil and gas emergency school tax to the tax stabilization reserve and repealing the taxpayers dividend fund, such that the balance in the tax stabilization reserve may accumulate overtime. The Governor vetoed SB 2 (Special Session) which was the principal tax bill intended to raise revenue for the general fund reserves and the road funds by $93,543,000. The bill included the following provisions, effective January 1, 2018: • Increases the gasoline tax by 5 cents per gallon (from 17 cents to 22 cents); • Increases the special fuels tax by 5 cents per gallon (from 21 cents to 26 cents); • Creates the state road maintenance fund; • Increases the motor vehicle excise tax by 1 percent (from 3 percent to 4 percent); n Executive Vice President’s Message  continued on page 10