Monday, November 30, 2009
Topics Du Jour: Santa Fe Pork, Tax Hikes & Lost Jobs. Plus: Even More Economy Blogging, And: Picking A Sheriff; The Way It Was
Voices are starting to be heard against any tax increases unless the Legislature cancels a huge pot of unspent pork money--or capital outlay--and uses it to reduce the immense state deficit. There's some $1.4 billion of unused pork money in Santa Fe. It's been set aside since 2003 for construction projects that were either never started or started and stalled. How much of this unused cash will legislators use to solve the budget shortfall?
Many of them don't want to give up the money because the projects help them get elected and re-elected. All 70 House members are on the ballot next year. But talk about resinstating the gross receipts tax on food and medicine to raise the hundreds of millions needed to plug the state deficit is going to look hypocritical if that pot of pork is left largely untouched.
The argument will be made that the pork represents one-time money and won't give us the recurring revenue we will need to solve our long-term revenue problems. But if the pork money was transferred to the general fund--say $600 million--major tax increases could be delayed for a year or two (The Legislature has been using some of the capital outlay to cover the deficit).
It will be of interest to hear where Senate Dem leaders John Arthur "Dr. No" Smith and Tim Jennings stand on this. Are these self-described fiscal conservatives willing to dig deeper into the pork barrel before they weigh tax hikes?
Santa Fe wants to have its pork and eat it to, but voters may be of a mind to end this giant chicharrones party. Stay tuned.
Along those lines, how about voters up in Raton turning down a school bond that, if passed, would have raised property taxes there? And there was also a recent no vote on a tax increase for the Santa Fe county fire department. Sounds to us like a couple of warning shots across the bow to those who think raising taxes in times like these is going to be a snap.
WHERE IT'S HITTING
Many New Mexicans--and we mean many--are somewhat, but not totally isolated from this raging recession by comfortable government jobs they have held for years. The national labs, the military bases and all the federal agencies continue to chug along. There have been some Sandia Labs layoffs and it appears employment growth is over there and at Los Alamos Labs, but not the military bases. There are hiring freezes at many local levels of government and most state workers will be furloughed for five days in the current budget year. However, the bulk of the pain remains in the private sector.
The state's jobless rate continues to soar and is now approaching 8 percent statewide (it's at 7.9). That level has been breached in the ABQ metro and now stands at a multi-decade high of 8.2 percent. (We give our customary caution that the actual rate is much higher when people who have given up looking for work are included as well as those who have settled for part-time jobs.)
Construction workers and retail employees have been especially hammered. Other jobs that also don't require a college education are also disappearing at a faster pace.
The state's lower middle class has been roiled by this deep downturn. You can see that in the long lines that form for any job fair and when TV news shows the increasing popularity of food banks.
The pain is now spreading more into the middle class, with the furloughs of state government workers. The chopping in half of the work force at Rio Rancho's Intel, the demise of Eclipse Aviation, and the closure next year of the ABQ GE plant are also direct hits on the state's private sector middle classes.
The relatively small strata of upper class professionals here have had their stock portfolios and real estate values take a major hit. The ongoing financial troubles at the New Mexico Symphony are one tell-tale symptom. Retirees are feeling the pain because many of them rely on stock dividends that have been reduced or suspended and there are steadily rising health care costs not covered by Medicare.
We seem boxed in. If housing is going to be more or less flat for the next decade and retail is going to be at best on a subdued growth curve, the jobs lost in those sectors won't be coming back. If more hi-tech is moving overseas, those jobs are also gone.
One should hesitate before throwing in the towel on the private sector's ability to generate another go-go era, or for a new bull market in oil and natural gas prices or for small businesses to eventually pick up the slack, but the challenges are steep.
The modern New Mexican economy--the one that gave us the decent paying jobs-- was built by the federal government--Sandia, Los Alamos, Kirtland and White Sands--and it remains the main driver here.
The boom in Clovis because of the renewed military presence at Cannon AFB and the small but steady growth at ABQ's Kirtand AFB as well as White Sands are bright spots on an otherwise dark landscape. Critics may call it a war economy, but someone's got to do it and New Mexico has excelled.
Would it be surprising to see policy makers start to look to that old model for the future? In other words, position the state more aggressively to win a larger share of the federal jobs pie? Given the current outlook, New Mexico as a natural home for more of the same will look increasingly attractive to the economic development crowd here.
THE NEXT SHERIFF
Who will be the next sheriff of Bernalillo County and fill out the remainder of Darren White's term? That question will be answered later today as the five member county commission meets at 5 p.m. to make a pick from a list of over 20 applicants, most of them with law enforcement experience.
White, who is becoming the city's public safety director, officially resigns today and starts work with the city tomorrow. His second, four year term runs until the end of 2010. Whoever gets the job today is eligible to run for election next year, but there's been talk of the commission looking for a "placeholder," someone who pledges to just fill out the term and not seek election.
That's the last thing the Democratic Party wants to see. With Republican White leaving, they see a realistic chance of taking back the high-profile office. Some of the Dem commissioners have been antsy about making enemies, thus the talk of a placeholder. We'll keep you posted on the action.
THE WAY IT WAS
Some memories are rekindled in thinking about today's decision from the Bernalillo County Commission to name a replacement for Sheriff White.
It's been a long time since a sheriff's term was interrupted. In fact, it was around 1975-76. Then-Sheriff Joe Wilson, a Democrat, was the subject of an extensive investigation by KKOB-AM radio news. That reporting and a grand jury probe led to a most rare event--a civil removal trial of a sitting sheriff on charges of misfeasance in office.
The trial was a sensational event of its time. We recall that the presiding judge was Rosier Sanchez, the brother of then Catholic Archbishop Robert Sanchez. We don't recall there ever being another such trial of a Bernalillo County official.
In those days we filed our reports for KZIA-AM radio from a telephone booth in the old Bernalillo County Courthouse. To send interview sound back to the station, we had to unscrew the mouthpiece of the phone and hook up what were known as "alligator clips." That's not where we got the term "Alligators" from, but in retrospect it is a bit ironic.
In any event, Wilson was found guilty at that trial, removed from office and the county commission named Tommy Richardson, then the county fire chief, to replace Wilson. Tommy had a heart condition and did not seek the office when it came up for election. Sheriff Wilson died not long after being removed from office.
KKOB--then known as just KOB--received national recognition for its investigation. And one of the radio reporters from that era--Diane Dimond--went on to bigger things as a well-known national TV reporter. Today she writes a syndicated column on crime that is carried by the ABQ Journal.
I was there and that's the way I remember it.
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(c)NM POLITICS WITH JOE MONAHAN 2009
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