Monday, December 15, 2008
How Much For Jobs? Rio Rancho HP Deal Faces Questions; Plus: The Light Guv Run, Balderas Backers Arise, And: The Bottom Lines From Conan O'Brien
The squeeze is on in Santa Fe and it could get tight for the state's latest big jobs deal. While up to a thousand job seekers lined up Friday to apply for positions at a planned Rio Rancho customer support center for computer giant Hewlett Packard, questions were being raised about state money pledged to build the facility. Rio Rancho has signed an agreement with HP pledging that the state will come through with $16 million in capital outlay money to help build the center building. That would be $8 million this year and $8 million next year. Trouble is, the anemic economy means maybe $75 million--perhaps much less--will be available in capital outlay for the entire state when the Legislature meets next month to divvy up this "pork."
Rio Rancho mayor Tom Swisstack describes himself as "cautiously optimistic" that Governor Richardson and lawmakers will find the money. "If we come up a million or two short, I don't think that will be a problem," said the mayor.
But the collapse of state-backed Eclipse Aviation is putting heat on economic planners, politicians and the press to be more skeptical of projects that promise long-term employment, cost a bundle in state taxpayer loot and in the end sometimes disappoint. HP is no Eclipse. It has $10 billion in cash in its coffers. Yet the state has to not only come with $16 million in capital outlay, but about $40 million in tax credits for the jobs. The city of Rio Rancho has floated a $5.2 million bond to build infrastructure for Hewlett-Packard and will spend another $2.1 million on building and land incentives. All this to persuade the company to locate here. In this economic atmosphere, Santa Fe's corridors may fill with chatter of "corporate welfare" when the topic turns to that $16 million in capital outlay. Swisstack says it’s worth it because HP will “jump start” Rio Rancho’s economy, helping to attract other industry. The same argument was made when economic planners were marketing taxpayer subsidies for Eclipse.
HP is a blue-chip company raking in major dollars, a component of the Dow Jones Industrial Average, and will not collapse. But it did announce massive layoffs in September. Some of their dislocated employees could find jobs at the Rio Rancho site. Swisstack says there is no legal agreement binding HP to hire locally, but he believes up to 80 percent of the jobs will be local. HP says "most" of the employees will be from around here. Conceivably that could mean as few as 50.1% will be local workers. HP does not say.
HP says it expects to hire 1,300 workers at Rio Rancho by the end of 2012 (Up to 1,800 in 15 years). They say most of the jobs will start in the $40,0000 range. However, Swisstack admits that with the amount of cash and tax incentives the state and city are putting up to attract HP, the investment is "long-term." Also, there is nothing in the legal agreement guaranteeing the wage rate. If HP doesn't make the employment goals, they will have to give back a portion of the government funds they are being awarded. Still, this appears to be a heck of a deal for the company. The uncertainty is on the taxpayer side of the equation.
Eight million dollars out of a $75 million capital outlay budget would amount to nearly 11 percent of the entire pot. How is that going to settle with lawmakers from outside the metro area? The Guv (Richardson and/or Denish) may have to look to trade on previously approved but never used capital outlay funds and also look in other nooks and crannies. Or someone at the Roundhouse could ask HP to kick in from their $10 billion in cash reserves as the state struggles with this recession. Who will be that "someone?"
TV NEWS DECLINE
The media is on the front lines of this recession and their soldiers are falling fast. Word arrives that the 5:30 and 10 p.m. local newscasts produced by KBIM in Roswell in SE NM and which serve seven counties have been canceled. KBIM is operated by ABQ CBS affiliate KRQE-TV. The local newscasts have been staples for decades and have been an important link for local government and political leaders to communicate. The newscasts have also been important to local campaign coverage. KBIM will continue to produce news for KRQE, but the loss of the local newscasts because of financial pressures is a major blow for news coverage in rural NM. No word on layoffs, if any, at the Roswell affiliate. E-mail it in if you have word on that angle.
LIGHT GUV RUN
State Auditor Hector Balderas, 35, was scored here last week for basically being a lightweight and conducting a PR blitz so soon-to-be-Governor Diane Denish will pick him as her lieutenant governor. Well, maybe it was a PR blitz in response, but the Balderas brigades were quick with their e-mail rebuttals. A few samples:
Former State Rep. Bob Perls: He is willing to take on some powerful interest groups within the Democratic Party. I had along meeting with him...and it was so refreshing to talk to a young, smart elected official who is clearly very thoughtful about what he is doing and why he is doing it. He seems to be motivated for the right reasons-public service.
Anonymous: I can't agree that the rise of Balderas is due to a PR blitz. His rise has to do with the good job he is doing in making governmental entities accountable and transparent. The Auditor uncovered millions in waste and mismanagement of the Sandoval County broadband project and violations of procurement and state law. The Auditor also issued subpoenas for records and the contractors left the state.
Anonymous: He has much more substance than people give him credit for. He has been a state legislator, currently manages a state agency and has recently been elected to the board of a very important Hispanic organization. He has done an outstanding job of managing the Auditor's office and making it much more visible. He is not just about press. I can think of no one that is currently being mentioned for the position who is as qualified as Hector.
Rob Rosales--Hector seems to be free of the usual New Mexico taint (nepotism, sweet business deals, prima donna attitude) and has performed well as a representative and now state auditor.
Balderas has his supporters, but not a lock on the Light Guv nod. Denish may choose someone who agrees to fill out her term but not run for the slot in 2010. That would take Balderas out. And more names continue to float. How about John Garcia, current state cabinet secretary for Veterans Affairs. Another long shot? Well, they all are except the one who will eventually be chosen. Have a nomination? E-mail them in.
MAKING IT OFFICIAL
A handful of New Mexicans will earn an asterisk in the history books today. They are the state's five presidential electors--members of the Democratic Party who compose our contingent to the Electoral College. They will vote today to make Obama's victory here official. The electors gather in Santa Fe. New Mexico's five electors were selected by Dem Party chairman Brian Colon and approved by the party. They are:
Brian S. Colón; Democratic Party Vice Chairwoman Annadelle Sanchez; Democratic Party Treasurer Tom Buckner; Democratic Party Secretary Christy French and Party Secretary Alvin Warren of the state Indian Affairs Department.
With that group of loyalists, Obama should be safe from any last minute McCain lobbying.
THE BOTTOM LINES
Conan O'Brien: "Yesterday President-elect Barack Obama called on Illinois Governor Blagojevich to resign. ... And after...hearing this, Blagojevich said, 'If he wants to call and talk to me, it's $4.99 a minute."
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(c)NM POLITICS WITH JOE MONAHAN 2008
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