Friday, April 24, 2009
More Audience for Oprah: State Jobless Rate Still Rising; Plus: City Budget Boss Headed Out, And: Our Bottom Lines
You can look at this two ways: unemployment in New Mexico in March was up by half a percentage point over the previous month's 5.4 percent to 5.9 percent, or the jobless rate is up 51% from March 2008 when it stood at only 3.9 percent. The state lost 16,400 jobs over the one year period. However you look at it, keep in mind if you count those completely out of work, those who can only find part-time jobs and those that have given up on finding a job, the rate is much higher. (We blogged April 1 about how senior economists here say the method used to measure joblessness in smaller states like ours actually underestimates the rate.)
Historically, ours is a state where unemployment has averaged well above five percent. As we all know now, the boom of the past decade was an anomaly, a false prosperity financed by easy money that sent the jobless rate down to unheard of levels.
It appears we are headed back to higher average rates because we can't see where the jobs are going to come from in the near future to replace those that are being lost. There will not be another Eclipse Aviation; Intel is not going to go back to 5,200 full-time employees; we won't be seeing many new auto dealerships; the retail contraction is only beginning and most government employment is flat or being reduced through attrition.
Lt. Governor Diane Denish recently remarked that healthcare, the film industry and alternative energy are three areas that provide jobs that don't disappear with the latest downturn. That's a place to start the discussion ("green" jobs are going to take time and patience) but we have a long way to go to provide job security and good paying jobs to a new generation of New Mexicans.
GOP Guv contender Greg Zanetti says the state needs someone who understands money and investments. He's partially right. We also need someone who understands job creation. And we have to be honest. This state is tantamount to a government colony, with thousands of high-paying federal jobs, military installations and government contractors. If we start to leak oil there, look out below.
IN THE BIG CITY
The jobless rate in the ABQ metro area for March was 6.6%--a level we are not accustomed to and one that is ravaging the city budget as gross receipts tax collections plummet. The final layoffs at Eclipse--over 800--took hold in March and are reflected in these latest numbers.
Santa Fe has gone from a jobless rate of only 3.1 percent to a March rate of 5.3 percent--and it is headed higher there and the entire state for the rest of this year, according to the economic soothsayers.
And 0n Thursday the city of Belen suffered a severe economic blow as Baca Auto, a used dealership with a 55 year history, bit the dust, another victim of the economic recession--or is it a depression?
One of the more talented state public officials grappling with the new budget realities is Anna Lamberson, ABQ's Chief Financial Officer, but insiders report Lamberson is headed towards the exits. They say she has secured a nice paying, private sector contract to help the government of Iraq restore its economy. They say she will depart in the next few weeks.
Lamberson engineered Mayor Chavez's election year budget that avoided layoffs, a key political point for the incumbent. But she may be getting out in time. If tax collections don't pick up in a significant way, layoffs in city government could be the post-election surprise.
We are at an inflection point for some governments. If collection of the gross receipts tax continues to plummet because of feeble economic activity, you have to wonder when the layoffs start in places like Rio Rancho, Alamogordo, Santa Fe as well as the aforementioned Albuquerque. Add the employment worries over Los Alamos and Sandia National Labs and you have a more than challenging environment.
Along those lines, TV news hit this story a while back, but there's a dead-tree report with details. Rio Rancho is asking city employees to volunteer to cut back their hours to help the city solve its money shortage. Rio Rancho had a budget for the boom, now it needs one for the bust. Mayor Swisstack and City Manager Jimenez are going to have their hands full.
And in Santa Fe, the downsizing continues across the board. Now it's the public school system. And even with a 10 percent cut in all school departments, the red ink remains in the millions.
THE FIRST GLIMPSE
The public may only have to wait a day to hear from the three candidates for ABQ mayor after they file their final batch of petition signatures to make the October ballot. The first mayoral candidate forum--the first of what will be a bunch--will take place April 29 at 6 p.m. at the AFSCME Union Hall on Pennsylvania NE. Petition signatures--about 6,500 to qualify for the ballot--are due at 5 p.m. the 28th. If they all commit to showing, this would be the first appearance of all three candidates---Mayor Chavez, RJ Berry and Richard Romero. Expect some heavy TV and other media coverage.
AD AGENCY ADDITION
On our report regarding the sale of the Rick Johnson ad agency to its employees by co-owners Rick and Debbie Johnson, the agency wanted to clarify. Here's their statement:
Debbie Johnson, previously CEO of RJC, became chairman of RJC in December and continues to be active in the RJC business. Erik Lohmeier, previously COO of RJC, became CEO of RJC in December, and Rick Johnson, previously Chairman of RJC, became Founder in December. All three serve on the RJC board, which directs our company’s operations. The majority interest of RJC was sold in December to an RJC management team...Rick and Debbie have property in Arizona, but they continue to live in Albuquerque. ABQ is their home.
Our insiders said the Johnsons now resided mainly in Arizona.
The central point of our report was that this iconic agency--founded in 1977 and one of the first full-service shops in the state--had been sold to its employees because of the ill health of founder Rick Johnson. The news release the agency put out in December did not explicitly say the Johnsons had sold a majority interest in the agency. That's why when we confirmed the sale it was hard news. We wish Rick and Debbie well.
We thought we had this piece posted on Thursday, but apparently the digits didn't stick. It's Big Bill's latest fundraising for his defunct prez campaign---and somewhat oddly---money for his governor re-elect kitty. But he isn't running for governor anymore. Or is he? Do we need to be looking for "Richardson 2014" bumper stickers? Or would that be Denish-Richardson 2014" stickers? Can we get a follow-up on this from the dead tree brigade? If not, we'll ring up the Alligators.
THE BOTTOM LINES
NM Attorney General Gary King received $50,000 in campaign contributions from a Houston law firm that has now become the focus of conflict-of-interest questions. The newspaper is calling on King to return the money. Fifty G's is a lot. The new state law limiting the size of campaign contributions can't take effect soon enough (it becomes law in 2011).
And what would a day look like without another angle on the State Investment Council shenanigans? Today is not that day as the AP comes with this:
Federal agents have questioned New Mexico investment fund officials about a financial adviser entangled in a pay-to-play investigation involving a New York state pension fund.The FBI met earlier this month with officials of the State Investment Council and the Educational Retirement Board...
Do you get the feeling this stuff is going to be hanging around a while?
The vision to build lasting funds for future New Mexicans from the money generated by our land and natural resources was one of the great legislative achievements in state history. But the SIC, created in the 1950's by legislative heavyweights like Senators Fabian Chavez (Santa Fe), Jack Danglade (Lea) and Horace DeVargas (Rio Arriba), has never seen anything like this.
You can only hope federal investigators can sort it out and restore confidence. The day will come for heads to roll, but for now we can think of only one thing to say: It's a damn shame.
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(c)NM POLITICS WITH JOE MONAHAN 2009
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