Friday, January 29, 2010
Hammered Again: Jobless Spike Shakes Political Landscape, Plus: Digging Out Of This; Brace for A Long Climb, And: Reader Mailbag Bulges
The Great Recession is not done with New Mexico. Not by a long shot. The floundering economy here took another hit as official stats put the jobless rate for December above the psychologically important 8 percent mark. In the ABQ metro, observers were stunned that the unemployment for December soared to 8.7 percent, another modern day record. No wonder city government is grappling with a projected $54 million deficit for the budget year that starts in July.
Even the government town of Santa Fe is plumbing new jobless depths. The rate there has skyrocketed to an unheard of 7.2 percent.
Retail, manufacturing and construction--in other words the NM private sector--is especially getting hammered--while the feds add jobs here for the census.
The political impact of all of this is obvious. If you are in power, you are in dangerous waters. Lt. Governor Denish, the soon-to-be Dem Guv nominee, will be the top target of the R's who will try to stimulate populist anger to move independents and some Dems to their column. With each uptick in the jobless stats, their chances improve.
Denish will have to plead the same case as Big Bill--that the unemployment debacle is a national problem and present a forward looking job creation platform. But anger and negativity could be difficult to assuage.
New Mexico Catholics pray to Saint Anthony when seeking a job. Di is hoping those prayers start getting answered--and soon.
THE R POSITION
For the Republicans, the value of their Guv nomination goes up with the number of unemployment checks mailed out. How will they react? By trying to clear the field for one strong challenger? Or with an orgy of cannibalism that could weaken their chances ala the Wilson-Pearce US Senate '08 primary?
THE LONG VIEW
The state reports "it will be a number of years" before unemployment here returns to pre-recession levels of 3.5 percent. A number of years? How about a number of decades?
That point was driven home when Governor Bill announced this week that a $1 billion solar plant would be built by a a Spanish company in Guadalupe County. And how many permanent jobs will result from that plant when it is up and running in a couple of years? Try 75.
We are trying to get the total number of jobs lost since we reached the pre-recession low, but the state says comparing December '09 to December '08 we lost over 25,000. The point is that while 75 jobs are more than welcome, solving this unemployment dilemma is going to be like using a step ladder to climb out of a hole that's a mile deep.
Not to pooh-pooh the plant. For a change, the state says it is not giving away the store with cash incentives to get it to locate here, but in this economic environment we would be remiss not to express concerns about the company being able to secure all the necessary financing for the project.
WORKING A WAY OUT
Let's not throw in the towel on the private sector's ability to regenerate itself and get the jobs meter pointing up again faster than expected, but the systemic collapse is of such severity we aren't counting on it. That's why the comments of NM Dem US Senator Tom Udall following Obama's State of the Union struck a chord.
Remarking on the president's proposal for a three year freeze on all discretionary federal spending, Udall said:
Federal spending can have a big impact on New Mexico. I want to see the details. We're going to scour this budget when it comes out and make sure New Mexico's protected.
We touched on this briefly in a past blog, but it bears repeating. While working for and waiting on a revival in the private economy, our state may want to reexamine its strategy for attracting federal dollars. The national labs and military establishment are the foundation of the modern state economy. We are a natural for more of that, but we are also right for renewable energy investment and as a location for more federal offices and installations that our lobbyists and congressional delegation might be able to identify.
As Udall indicated, protecting the labs and military from steep cuts will be job one for our federal congressional delegation, but playing offense and going after additional federal dollars is becoming more urgent as thousands of New Mexicans descend into the misery of unemployment, or just give up and get out of here.
BULGING READER MAILBAG
The Rail Runner evokes a lot of emotion--both pro and con--as we've been finding out all week as readers debate the news that only a small amount of the cost of running the commuter train between Belen and Santa Fe comes from fares.
Reader Walter Lamberson, who grew up in NM and now lives in San Francisco, is up first today, responding to lobbyist Domonic Silva of Las Cruces. Silva took issue with bicyclist and Rail Runner supporter Diane Albert and pointed out how much he was paying in gas taxes for his lengthy commutes to Santa Fe. Here's Lamberson, one of many disagreeing with Dom and defending Di:
Domonic says he spends $100 per trip from Cruces to Santa Fe on gas and of that, $40 are gas taxes. This can’t be right. The current average price of “regular” gas is $2.70, and only 37.2 cents of that is tax (24.4 cents being federal, and the rest state tax, one of the lowest state fuel taxes). All told, to drive nearly 600 miles and burn 37 gallons of gas into our air, Domonic pays only $13.78 in taxes, not $40.
Thirty-seven cents a gallon does not pay for the network of roads or the highway patrol much less the cost of time lost in traffic and contribution to pollution...Moreover, each year Domonic spends thousands of dollars on gas, and what is not taxed flows to Saudi Arabia and other oil-producers. Diane, on the other hand, saves thousands of dollars, cash she can spend in New Mexico on something that doesn’t pollute...Her commerce can create jobs outside the gas station. I think Domonic should be grateful!
And reader Marc South is back with a second bite out of this apple:
Joe, not to rain on the parade twice in one week, but anyone who thinks that their gas tax covers the costs of road construction and maintenance is not to be trusted with either motor vehicles or sharp objects. That the gentleman in question is a lobbyist only makes it scarier. There is a ton of research out there (USDOT, Texas Transportation Institute, even NMDOT) that has talked about how the funding generated out of the gas tax isn't remotely adequate to do what needs to be done.
And we have this from a reader identifying themselves as "Gator Al Schue." Clever. He says the bicyclists have it right:
This is Gator Al Schue. Cars and trucks in this country don't even come close to paying for themselves when one considers the real costs of the US power projection into oil rich parts of the world that keep our gas 'cheap.' We only think $5 a gallon is expensive because half the state is two paychecks away from welfare. That, and we insist on tooling around the state 15-20,000 miles a year in behemoths that get crappy mileage.
By contrast, we don't need a trillion dollar military operation--or the blood of our brave young men and women in uniform--to keep the price of bicycles down.
Paul Gessing of the conservative Rio Grande Foundation sent us this link that asserts 90 percent of highway costs have been paid by highway user fees. He said this of Albert's blog:
While I too would like to see broader use of toll roads, what she fails to mention is that user fees (gas taxes, licensing, registration, etc.) pay more than 90% of the cost for roads....
FINAL TRIP AROUND TRACK
Let's give the last words on this latest Rail Runner debate to the man in charge of the train. Dewey Cave, interim director of the Mid-Region Council of Governments (MRCOG), blogs in with a defense of the criticisms of the Rail Runner heard here this week:
All forms of transportation are heavily subsidized. The Rail Runner...was put to the ultimate test when it was placed on the ballot for voters in the four-county area to decide whether they wanted to increase their taxes to pay for the operations of the train...The voters overwhelmingly it...When was the last time New Mexico voters got to weigh in on whether to spend money on a road project?
(Our Rail Runner) investment pales in comparison to other southwestern cities that are working to provide the very same thing. In Utah, like Central New Mexico, they too will end up with about 100 miles of train service, but at a cost of $1.6 billion dollars and it will take 17 years to complete...
The MRCOG was the lead agency on the Rail Runner and delivered the fastest start-up of a commuter rail project in the country in the last 20-years. From the get-go, we made a decision that the service was going to be privatized and that is exactly what is happening, Herzog Transit Services provides maintenance of equipment and track as well as operations, including fare collection...
Speaking of fare collection, the recent blog accounts citing 13-percent of revenue from fare box collection only gives part of the story...BNSF and Amtrak are paying for the use of the track, which means that actual revenue generated to offset operational costs is closer to 20%. Again, when you look at other young commuter rail systems, we are headed in the right direction.
We cannot however, predict and always account for a downturn in the economy. The tax is not generating what it traditionally had provided in the past, but hopefully will rebound with the economy...
With regards to fare collections, we have been very aggressive in making adjustments; we've added ticket agents; our conductors now assist agents where needed; discounted tickets can be purchased on the web site, and MRCOG conducts random audits to verify that every rider has a valid ticket..Our audits have demonstrated that abuse is not widespread, and moreover that our agents are efficiently performing their duties. With the help of State Police, this week we are pursuing prosecution of a few people who were producing fraudulent tickets.
...The Rail Runner benefits New Mexico families, giving them an alternative form of transportation during these hard economic times. And don’t underestimate the benefits of having fewer vehicles on the road; a better quality of life, a cleaner environment, and a safe way to travel...Perhaps this is why we have more and more communities wanting to know when we’ll extend Rail Runner service north and south, so that they too can enjoy the economic value the train brings as well as the positive impact on their lives...
ONE FOR THE ROAD
A reader who is an economics professor writes to us of the forced closure by federal regulators of of NM-based Charter Bank:
It is unfortunate and unfair that the small banks are now being held to (rigorous) standards while the big ones get off easy because they are 'too big to fail' and with executives laughing all the way to the bank.
Well, with the confidence in banks these days, maybe the bankers are laughing all the way to their mattresses where they hide their bonuses. But seriously, it is unfortunate about Charter failing, but stopping the bleeding early is better than having a gusher later.
EX-REP ERIC YOUNGBERG DEAD
Upset friends and colleagues of former ABQ State Rep. Eric Youngberg sent our blog cell phone ringing Thursday night as they reported the death of the lawmaker who served three terms in the state House. Details of his passing were sketchy at blog press time, but several callers said he was found dead at his ABQ home. (Here's a report from the Saturday newspaper.)Youngberg celebrated his 43rd birthday this past Tuesday. He represented Dist. 23 on ABQ's West side and parts of Sandoval County.
The affable Youngberg was well-liked on both sides of the aisle at the Roundhouse. Fellow ABQ GOP State Rep. Janice Arnold-Jones was elected the same year as Eric--in 2002--and had this reaction to his passing:
Eric will be remembered as a legislator for his great intellectual capacity. He was both an attorney and a CPA. Very impressive. I am shocked by the news.
Democrat Ben Rodefer, who defeated Youngberg in 2008, emailed this remembrance late Thursday:
I learned of Eric Youngberg's death with great sadness. What a tragic loss. Eric was a man of tremendous intelligence, warmth and ability. A man who cared deeply about his community and his state. A man who will be sorely missed by the so many who knew and loved him.
Even after his defeat by Rodefer, Youngberg was still attracted to the political life. We last saw him at the Rio Chama restaurant across from the Roundhouse during the '09 session. We hung out with him and veteran lobbyists Leland Gould and Bob McBride for several hours talking La Politica. Despite having lost his House seat, the gleam in his eye remained as he discussed the game. We imagine that's how many will remember him.
This is the home of New Mexico politics. From Albuquerque, I'm Joe Monahan reporting.
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(c)NM POLITICS WITH JOE MONAHAN 2009
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