Monday, November 29, 2010

Balancing the Checkbook: Can Susana Start At The Top? Plus: A Post-Holiday Blog Special; This Economy Of Ours; A Way Forward 

The first round of key appointments by Governor-elect Martinez are drawing mostly good reviews. Mr. and Mrs. New Mexico are aware that a budget bloodbath could be in store, but they don't want--or need--a legislative train wreck to go with it. The appointment of experienced state legislators to top staff positions is seen as a sign that compromise with the Legislature is not entirely out of the question. And that's a good thing.

While Martinez is getting kudos for the selection of Roswell Rep. Gardner as chief of staff and former Clayton area Rep. Moore as deputy chief of staff, the crowd gathered at the gates awaiting the "bold change" the Guv-to-be promised is still waiting for the first act.

For example, when Republican RJ Berry was elected ABQ mayor in '09, he trimmed back the salaries of his department directors, getting many of them below $100,000 year. He also claimed significant savings in reorganizing the mayor's office.

Can't Martinez do the same? What about reducing the number of employees in the Guv's office which has swelled under Big Bill? What about trimming the salaries up there? Bill's chief of staff is now making north of $140,000 a year.

Gardner and Moore are on the state retirement system so the higher their salaries, the higher their eventual retirement checks. This and every other potential vulnerability in the new administration will be pointed out if cuts are proposed that would throw people out of work or cut services.


With headlines again screaming of that federal probe into pay-to-play allegations at the State Investment Council, it has been Big Bill's legal future that has been figuring into the most recent water-cooler conversations. But the Guv gets a reprieve from the speculation about his legal problems as the national press reports his name is back in the mix for that $1.2 million a year job as the DC lobbyist for the Motion Picture Association of America. His name has surfaced repeatedly as this plum job has been vacant since May.

$1.2 million a year? That ought to be enough to pay for legal fees back in New Mexico.


How about this for a cogent mission statement for the new administration, coming from a Senior Alligator of a conservative bent:

I think blockbuster performance from state government is reorganizing higher education, taming the teachers' unions, putting learning into public education, downsizing government, reducing the intrusion of government, and taming the government employee unions. Nothing liberals find sexy. Just nuts and bolts work to make government work for voters from the private sector who pay the bills and not for the leeches who suck from the government teat...

Well, we don't see the economic structure of the state quite that way which leads us to....


They call these "15 Mind-Blowing Facts About Wealth And Inequality In America."

It really is the story of our time, isn't it? How so much wealth became concentrated at the top of the American pyramid as the middle class languishes.

For New Mexico, there are some solutions right in front of us--adjust personal income tax rates upward on the most wealthy taxpayers; create new well-paying middle class jobs by encouraging development of the Spaceport and opening a dental school at UNM; work to maximize the large federal presence in the state which has provided the most reliable and secure jobs for the past seventy years and has spun off millions in contracts and hundreds of small businesses; shrinking or eliminate dubious tax credits that cost our treasury needed tax dollars; escalate marketing of our state's agricultural products in the global economy; be mindful of the importance of oil and gas even as we pursue renewable energy.

What New Mexico doesn't need to do is erode through neglect the fundamental pillars of the state economy. The bromide that "government doesn't create jobs" flies in the face of the entire state's history and has no connection with reality. The latest numbers show that 25% of New Mexico's work force is now employed by government. When you add in the contractors and indirect government jobs, you can pretty much conclude that about half the state's employees toil for government.

That's not an inherent evil. It is who we are. To build a modern day economy, generations of state and national political leaders--both Republican and Democrat--worked to establish New Mexico as the premier host for the nation's national security programs and a myriad of military installations. It worked brilliantly as our isolated geography, tiny population and other challenges were simply too Herculean to attract private capital.


Those who yearn so desperately to have us compete with Silicon Valley or the Massachusetts Miracle seem unable to comprehend our limitations and blame taxes, regulations and other bogeymen as the reasons for our private sector under performance. Yet in the past decade we have provided millions in tax incentives and put out an unregulated red carpet to literally dozens of private enterprises, most of which have failed to take hold.

Which takes us back to Governor-elect Martinez and the opportunity for a fresh start. If there is any lesson from the lost decade of trying to lure business, it's that we have failed to invest adequately in our human capital. We lack the educated and entrepreneurial work force that is needed to compete in private enterprise. And we now know it.

This is why we think Martinez's campaign pledge not to cut funding for public education resonated so loudly. The continued and depressing lag in performance by Hispanic and Native American students--who comprise the majority of the state's public school students--is the primary barricade to developing a more robust private sector. You can cut taxes to the bone and eliminate the entire regulatory code, but if you don't have people who can do the work, the work can't be done. It's that simple.


The new Governor does not need a diversified agenda. We had that the past eight years. Besides, we no longer have the money for one. Martinez's best bet--perhaps her only bet to deliver fundamental economic change--is to finally put the state on the path to public school success among the population groups that perennially under perform.

That's going to cost money. You would be cutting your nose off to spite your face if you started slashing pre-kindergarten and child nutrition and health programs. And what of the parents and the value system that does not put a premium on education? How do we get at that? If you are Governor, maybe you act like a wartime president, immersing most of your time and energy in this singular effort whose outcome is central to the way we look ten years from now.


If, as we argue, that New Mexico won't attract the next Apple or Cisco until we get our education house in order, the immediate economic future means protecting and enhancing what we have. The last thing we want to do is turn up our noses and sneer at the thousands of "government jobs" that are providing a badly needed anchor in this Great Recession.

Apart from high oil and natural gas prices, the previous bull market that took the state's jobless rate down to record low levels was an illusion. It was a real estate bubble that added thousands of construction and retail jobs--now mostly all gone and that are not coming back.

Our leaders need to hold Washington's feet to fire to honor the commitments it has made to this state as the nation's national security colony. Our military bases and national labs need a strong defense against the budget cutters. And we should protect and enhance the private sector we have.

Our agricultural economy needs support as it competes in the global marketplace; the health care industry has been a presence here since the days of TB. It continues to grow and provide jobs. The oil, gas and mining industries are integral, providing hundreds of millions annually in royalties. The ongoing argument over the "pit rule" detracts from the cordial relationship the state has had with oil and gas. It is time to move on.

The moral repulsion that is fashionable in some quarters toward what has been built here is perplexing. We're not talking about the morality debate over nuclear weapons research here, but the repulsion expressed over any type of government employment.

Sure, a more thriving private sector with better paying jobs is the end game. But local Silicon Valley seekers keep putting the proverbial cart (taxes, regulation etc.) before the horse. First, we must wholeheartedly embrace the advancement of the youth who will ride the horse--only then the cart will get moving. Let's get on with it already.

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