Tuesday, July 20, 2010
Bear Market Still Bearing Down On State's Largest City; What's The Outlook? Plus: Some Spark Plugs To Get Things Jumping
The most vicious bear market in Albuquerque's modern history continues, seemingly unabated and defying predictions that the second half of this year would see a turnaround.
Throughout the metro area "for sale" and "for lease" signs are even more ubiquitous. Home foreclosure sales take up multiple pages in the newspaper; the unemployment rate remains near 9 percent as the work force here appears to be shrinking and as population growth slows.
Growth in Phoenix, Atlanta, Albuquerque, N.M., Las Vegas and Jacksonville, Fla., slowed by as much as 2.4 percentage points since 2006. Those cities were victims of a foreclosure crisis that made it harder for new residents to move in.
The latest ominous developments are the collapse in public sector jobs and an ABQ office vacancy rate now approaching 20 percent--a level that is associated with depressions. Our reader email tells the tale:
Joe, The only growth industry in this city right now is the people standing with liquidation and clearance signs at every major intersection. Drive down Coors Road and you'll see 10 people hawking different businesses, and not a day goes by that someone doesn't put up something on my door. The other day a financial analyst came by trying to drum up business for their local Edward Jones outlet.
The fact is many people are desperate here--and even the government jobs are going the way of the dodo as the tax base is collapsing.
The hiring freezes in state and city governments and the anemic growth in federal jobs is unprecedented in city history. Government makes up 20 percent of the employment base and has been a reliable career route for thousands of city residents. Making matters worse, these jobs are desirable, providing above-average pay and full health and retirement benefits.
Some of this is welcomed by enviros who saw ABQ growing too rapidly, especially on the sprawling and maze-like West Side. But that doesn't obviate the very real needs of real people to have gainful employment and a decent future.
Where will the new jobs come from for our high school and college graduates? It has always been tough getting good work here, but public policy makers seem especially flummoxed in this cycle.
There are simply no major initiatives on the table--other than perhaps to spark a small-business revival to rejuvenate the ABQ area economy. Everyone seems to be waiting for the economic cycle to turn and restore the thousands of lost jobs and replenish the drained tax coffers.
But this downturn is more secular--more redefining than past recessions here. The failure of large-scale venture capital economics as seen in the collapse of Eclipse Aviation, Advent Solar and others leaves policy makers looking for alternatives that don't send them on more wild goose chases.
We don't see a private sector revival that is going to replace the over 40,000 metro area jobs lost in this quasi-depression. (Well, if we have another housing and credit mania we may see it). What we have excelled at the past sixty years is providing a hospitable and productive environment for all types of Federal government installations. We may need to again look there to ensure a future employment base that is composed of more than store greeters at Wal-Mart. (Not that those Wal-Mart jobs are unwelcome).
SOME SPARK PLUGS
--Give Senator Bingaman some steroids so he can muscle more federal dollars into the metro. More pork and less policy in these troubled times should be the senior senator's watch phrase. (You too, Senator Tom).
--Stop the charade. Just about every major private business in ABQ depends on government contracts. Rather than make long shot gambles on biz proposals that require large taxpayer subsidies, go for those government deals from the feds--with gusto.
--Build a dental school at UNM that would join the successful medical and law schools that have provided great careers for several generations of New Mexicans--right here.
--Find a way to cut the business-inhibiting gross receipts tax now at 7 percent in ABQ. More reliance on property taxes and/or fees? Mayor, you figure it out.
--Let's compromise. We remain unconvinced that the oil and gas industry is getting hurt because of the environmental "pit" rule. But the industry disagrees. If we're wrong, the statewide economy is getting hurt. The compromise? Give the industry a limited tax credit when complying with the rule.
---Service across the board lags for a city the size of ABQ. Business here needs to improve thereby attracting more return customers who otherwise stay away and don't spend.
---The mayor and the city's economic development department need to start addressing this downturn with more than feel-good "one stop shops" to help business cut red tape. We've been there and done that. We need development ideas, aggressive business recruitment and a general engagement of the troubled city economy, not a caretaker attitude.
THE TV AND THE MONEY
We don't get another state finance report until September 13, so how Susana is doing raising the money she needs to catch Di is not readily apparent. Denish appears to be outspending her on July TV, but not by much, according to those monitoring the action. Neither campaign appears to be spending heavily. Martinez's last report had her with a paltry $300,000 on hand, her cash depleted from an expensive primary. Denish reported $2.2 million in the bank.
July is one of the lowest TV viewership months of the year. Martinez can afford to go light, having tied the race up early. But even the most confident campagins are rattled when they get outspent.
Martinez remains on the air with an pro-death penalty ad which confirms her campaign strategy of staying to the right. She wants to win this thing with Republicans and conservative Democrats and independents. The spot is helping consolidate them. The question is: will there be enough of them at the end?
Denish continues with a soft spot that goes after Hispanic women. It is aimed at stopping Hispanic drift to Susana who could go over the top by combining her conservative voters with Hispanics who want to vote ethnically.
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(c)NM POLITICS WITH JOE MONAHAN 2010
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