Wednesday, March 30, 2011

Economic Turmoil Continues: Rio Rancho Bond Goes Down, Plus: The Rich Get Richer & Santa Fe's Black Hole, Also: Susana's Competition For VP 

The economic turmoil in the Land of Enchantment continues with voters in the state's third largest city turning down a $22 million bond issue for road improvements. As a result Rio Rancho property owners will see their taxes rolled back by about $68 for every $100,000 in value. That's not a fortune but it signaled the Great Recession is not over here and far from going away as the dominant political issue.

Only about 6 percent of the city's registered voters turned out Tuesday, but those that did crushed the bond issue by a better than two to one margin---2,160 for and 940 against.

The vote came amid soaring prices at the gas pumps and the grocery stores. Home values in Rio Rancho have cratered and unemployment has soared as the city confronts an ugly construction depression and a stagnant job scene. Combine it all and voters--especially the more conservative ones who dominate a special election--were in no mood to tax themselves more--even if it meant their SUV's cruised on newer streets and encountered fewer potholes on existing ones.

Rio Rancho Mayor Tom Swisstack and the city council opted last year to raise the gross receipts tax to balance the city budget. The rebuke of the big bond is a message to them that voters want them to do more with less before coming to them again with open palms.

The vote also signals that the economic heyday of the city of 87,000 is in the rearview mirror for the foreseeable future.

The city of ABQ will ask voters this October to approve over $150 million in bond issues. We usually pass them, but Tuesday night's vote in near by Rio Rancho means city fathers are going to want to do some hard selling.


A reader writes on the decision of corporate giant First Solar to locate a new $300 million solar manufacturing facility in Mesa, AZ and not ABQ:

When companies are looking for a new home or say they want to relocate, they often will pit communities against each other to get additional incentives. I am guessing First Solar never planned to move to NM or Texas: they just wanted a sweeter deal from the Mesa officials.

Mayor Berry is now asking the city council for a $20,000 study to compare the business incentives offered by ABQ and the state with neighboring states, saying he is worried that we are not competitive. However, the mayor was silent during the recent legislative session when the tax rebate program benefiting the film industry was trimmed back.

Speaking of our neighbors, Texas is now looking at legalizing gambling in order to conquer an immense budget shortfall estimated at over $20 billion over the next two years. Doesn't sound like we have much to envy about the Lone Star State.

When ABQ Chamber of Commerce head Terri Cole was asked by the newspaper what is the one thing our state could do to improve its efforts in attracting jobs, she said: "Create a K-16 education system that gives every child -- regardless of socio-economic background -- a world-class education."

Maybe this will help:

Governor Martinez has signed Senate Bill 427 into law, creating a transparent A-F school grading system for New Mexico’s schools. The measure....received overwhelming bipartisan support throughout the legislative process....


While Cole and her colleague Beverlee McClure of the Association of Commerce and Industry had a warm relationship with former Dem Governor Big Bill, insiders say that is not the case with Governor Martinez. Despite having a lot of GOP members, Cole and McClure's ties to Richardson have cooled their relationship with Susana and their ability to get access. Martinez is so far ignoring their pleas to sign a bill that would raise the tax on employers to rescue the state's unemployment fund, but insiders expect her to eventually ink the measure.

Cole publicly supported many of Richardson's initiatives. McClure served as Richardson's first Sec. of Higher Education. There have been rumblings that Cole, in her position for decades, could be on shaky ground with the Chamber. But she says that the board of directors remains supportive.


Susana is not giving any signs that she is about to dump Darren White. She defends her controversial pick to the state Judicial Standards Commission.


What has been the biggest economic change in the USA in lifetime of your blogger/reporter and maybe yours, too? Bob Herbert, in his final column for the New York Times, has the story:

There is plenty of economic activity in the U.S., and plenty of wealth. But like greedy children, the folks at the top are seizing virtually all the marbles. Income and wealth inequality in the U.S. have reached stages that would make the third world blush. As the Economic Policy Institute has reported, the richest 10 percent of Americans received an unconscionable 100 percent of the average income growth in the years 2000 to 2007, the most recent extended period of economic expansion.

Americans behave as if this is somehow normal or acceptable. It shouldn’t be, and didn’t used to be. Through much of the post-World War II era, income distribution was far more equitable, with the top 10 percent of families accounting for just a third of average income growth, and the bottom 90 percent receiving two-thirds. That seems like ancient history now.

The current maldistribution of wealth is also scandalous. In 2009, the richest 5 percent claimed 63.5 percent of the nation’s wealth. The overwhelming majority, the bottom 80 percent, collectively held just 12.8 percent.

Hebert notes all this is a recipe for future social unrest. If you look around the world today you would be shortsighted to say, "It can't happen here."


The endless economic black hole that is the city of Santa Fe these days has claimed another victim:

Keith Toler, director of the Santa Fe Convention and Visitors Bureau, resigned Monday, citing differences of opinion with City Manager Robert Romero.

Alfred Matter, managing director of the Eldorado Hotel & Spa — one of the city's largest hotels — said Toler's resignation might have been because of the lack of group business for the city's new convention center, which opened in the fall of 2008 and has tens of millions of dollars in capital debt to repay.

The city's financial situation is so dire they're asking for a rare property tax increase to fill city coffers, but the peanut gallery is getting surly toward Mayor Coss. A city columnist is an example:

Before the city raises our taxes, I would like to see pay cuts — not for rank-and-file workers — but for top bosses. That's a signal that the big shots take our shortfall seriously. Further, the city needs to stop big payouts for retiring workers cashing in their sick leave. That was a too-generous perk even in good times.

Coss appears to have the council votes to get the property tax increase passed. It would generate $4 million of the $8 million shortfall projected for the budget year that starts July 1, but the Santa Fe County Republican Party is demanding that he take the issue to a vote of the people.

With Coss and his allies reluctant to really dig in and make more dreaded cuts, the R's have a point--let the people decide if they want to scale back their city government some more before slapping on a property tax hike that would hurt the poor and middle class much more than the wealthy.

Sen. Rubio
Susana's' brief trek across state lines last Friday to speak to Colorado Republicans renewed talk that she is positioning herself for the VP spot on the 2012 GOP Prez ticket. But if she is, she has some stiff competition--from a fellow Hispanic. He's Florida Senator Marco Rubio. From ABC News:

After persistent questioning, Rubio ruled ruled out a run for president; at least in 2012. "I am not running for president in 2012."

Rubio, however, was less definitive in his response to media speculation that he is the odds-on choice to be the GOP vice presidential nominee.

Like Martinez, the 39 year old Rubio was elected to office this past November.

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