Thursday, April 14, 2011
Lost Coss: Santa Fe Mayor Caves On Tax Hike; Voters Clamp Down There & Elsewhere, Plus: Big Money Is Still On "Hill" And: Susana 0 For 2 With Supremes
New Mexico public officials continue to feel unprecedented pressure to clean up their backyards and bring their budgets into line with the new economic reality. That pressure was simply too much to bear for Santa Fe Mayor David Coss (pronounced "cause") and his city council allies. They proposed raising property taxes to solve an $8 million shortfall for the budget year that starts July 1. Coss cracked and is now backing off. Instead of the property tax, he and his council allies, one of whom an angry electorate has started a recall effort against, are going for a one time raid of the city's Wastewater Fund. That fund pays for servicing sewer lines and the like. They take $4 million from there and combine it with other cost savings and get to the $8 million.
Chris Calvert, the city councilor who is being threatened with a recall election for his initial support of the property tax hike, is now running from it like a cat facing a fireman's hose.
Mayor Coss, a former labor organizer, has simply not had the stomach to do what needs to be done--a restructuring from top to bottom of the employee heavy city government. Santa Fe has one government employee for every 43 residents in contrast to ABQ which has one city government worker for every 83 residents, says the Census.
The Wastewater Fund raid is a one time fix and if the economy doesn't take off Santa Fe will be back in the red for yet another year. And just what are the chances the Santa Fe economy will boom with new tourism and increased state government employment? The mayor would be better off betting on the roulette wheel at Buffalo Thunder.
Santa Fe voters join their Rio Rancho brethern in a taxpayer rebellion. Last month voters there rejected a $22 million bond issue for street repair and construction. They will see a property tax decrease as a result. ABQ Mayor Berry didn't dare propose a tax increase when he came in, but instead let the city payroll dwindle through attrition and he ordered pay cuts.
The voting public doesn't want to see blood in the streets, but they want to see the government budgets treated like they have had to treat their own. And that means some real pain.
TAKING THE PAIN
What most voters instinctively know and the political classes are hesitant to accept is that we are in a new era. The long-term outlook is not for a brand new bull market, but for slow growth that will necessitate downsizing. Coss is kicking the can down the road with the $4 million raid. It may see him through another year, but by forcing him to reject a property tax hike voters are telling him they are ready for a city that provides fewer services and has fewer employees.
The problem is that the liberal electoral base of Mr. Coss doesn't support that view. When His Honor gives voters outside of his political base a plan they can believe in, then and only then will a tax increase get a serious hearing.
For the state it can be argued that income taxes were chopped too much by Big Bill during the bull market and when he was looking to put points on the board for his 2008 presidential run. That has meant--by some estimates--at least $300 million less coming into the coffers each year. On the other hand, the gross receipts tax--now 7% in ABQ and over 8% in ABQ--is what our cities mostly depend on to finance local government and raising it further can be a business killer.
It's natural for the politicos to look to the more stable and still low property tax to pick up the slack, but with the Rio Rancho bond defeat and the Coss cave-in in Santa Fe they are now 0 for 2. Add to the mix Governor Martinez's popular pledge not to raise taxes during her four year term.
As a sluggish economy, high unemployment and higher prices bedevil them, New Mexico voters are clamping down on the revenue streams going into government at all levels.
The party may be long over but the hangover is going strong. Just ask Mayor Coss.
REAL ESTATE BEAT
Part of Santa Fe's problem is the aftermath of the housing bubble. The latest:
Santa Fe city and county home sales fell slightly from 275 in the first quarter of 2010 to 272 in the first quarter of 2011. The overall median price of homes in the city and county during the quarter fell slightly to $355,000 from $365,000 in the same quarter of last year.
Sure, there's a bunch of Texas millionaires buying property up there and that keeps the median price high, but $355,000? You drive around the City Different and you can tell the guy making money is the one who makes the "For Sale" signs. Sellers in Santa Fe still haven't sobered up and the real estate sits there like a too expensive necklace in the window at Tiffany's--available to the few but not the many. Look out below, Santa Fe.
While Santa Fe struggles, New Mexico's government-rich Los Alamos County maintains its spot on the top ten list of wealthiest counties in the USA. Forbes has the county--home to Los Alamos Labs--coming in at #6 in the latest data:
Decades of government money spent on nuclear weapons resulted in a bonanza for the local economy. Most of the 18,000 residents of the county (New Mexico's smallest) live in Los Alamos
The median annual household income for the county is listed at $100,423.
With all that cash floating around "The Hill" you would think they would have a couple of good restaurants around there. Or are we missing something?
Then there's the downside of the nuclear industry. From Capitol Hill:
Congressman Ben Ray Luján led the effort to introduce legislation today in the House of Representatives that expands compensation for those exposed to radiation while working in uranium mines or living downwind from atomic weapons tests. Luján’s bill is the companion to legislation introduced in the Senate today by Senator Tom Udall and cosponsored by Senator Jeff Bingaman....
Sam Bregman, who is seeking to unseat Dem Party Chairman Javier Gonzales at an April 30 party election, has been riding Javier hard, saying the party needs "a rapid response team" to keep the R's on the defensive. Well, maybe he's listening. The Dems were quick to jump on a state Supreme Court ruling that went against the Governor and for state employee labor unions. The Supremes said her firing of two members of the Public Employee Labor Relations Board was against the law and ordered her to reinstate board members John Boyd and Doug Westbrook:
"In barely more than 100 days in office Susana Martinez has yet again lost in the state supreme court for overstepping her authority," said DPNM Chairman Gonzales. "First she was caught making a back-room deal with lobbyists to weaken clean-water protections, now she has been soundly rebuked for attempting to take away employees' rights by dismantling the board assigned to hear worker complaints. Clearly Governor Martinez has a troubling agenda and it appears she is willing to run afoul of state law to do it."
One Republican wag chimed in on the Guv's second loss before the high court in her young administration:
I hear Susana was a good district attorney, but she hasn't won a case since being Governor....
BINGAMAN ENDORSES JAVIER
Back on the Dem state chair race, Javier Gonzales supporters are celebrating a big name endorsement--that of senior Senator Jeff Bingaman who is also one of the over 400 state Dem central committee members who will decide the contest. Says Jeff:
I will cast my vote for Javier Gonzales for state party chair. Javier has the state party on the right track, laying the groundwork for candidate recruitment, fundraising and party building to make sure New Mexico helps re-elect President Obama, elects great Democratic candidates in both open U.S. Senate and House seats, and equally capable Democrats up and down the ballot in 2012....
The Dems decide their chairmanship April 30. Letitia Montoya of Santa Fe is a third candidate.
THE BOTTOM LINES
Dem US senate candidate and ABQ Congressman Martin Heinrich has been endorsed by the Teamsters union. He is the only major announced candidate for the 2012 Dem senate nomination....Bernalillo County has a new web site. It cost $245,000 and took almost two years to complete. We'll let you be the judge on whether it was worth it....
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(c)NM POLITICS WITH JOE MONAHAN 2011
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