Thursday, November 17, 2011
Radical Consolidation Plan Threatens NM Labs Funding, Plus: Berry's Paseo Problem, And: Hangin' At The Pit
Maybe the worst will come last. After three years of bone-crushing recession the final body blow to the New Mexican economy could come with a radical restructuring of the federal Department of Energy. You know that one. Nearly $5 billion a year from that agency is pumped in here to run Sandia and Los Alamos national labs, among other things. But is the 65 year funding party--begun at the end of WWII--about to be busted up by the fiscal police? The latest news from DC is grim and a reminder of how dependent our state is on Uncle Sam:
...The (Energy) department's inspector general, Gregory H. Friedman, issued a report calling for a wholesale restructuring of the department's far-flung laboratories and other operations. He warned that "painful" staff reductions were certain to come as Congress sought deep federal budget cuts in the months ahead....The department spent nearly $13 billion a year to run 16 separate laboratories but that only about half of that money went toward actual research, with 49 percent paying for overhead and capital spending. That ratio is "out of sync," he said, and could be improved by combining some operations. The inspector general warned that changes in the department's organization could "have a significant impact" in states like Idaho, New Mexico, South Carolina, Tennessee and Washington...
This "restructuring" talk is a shot across the bow of the state's congressional delegation and policy makers in Santa Fe and ABQ. Sandia Labs alone has a budget of some $2.5 billion and over 8,000 employees.You chop that by even 10 percent and that ABQ house you own is going to look even more over priced. And up in Los Alamos, where nearly 10,000 toil, the impact of a shrinking Los Alamos would be nightmarish.
Things have been going pretty well for NM with DOE. The Prez recommended major increases in funding for the labs. That is not panning out but small increases are seen for the next budget year.
The senators and congressmen from the impacted states--including our own--are sure to try to kill this consolidation proposal in its crib, but this is a new world order. The guarantee of fiscal tranquility that New Mexico has enjoyed from the feds since the first atomic bomb was set off here is no more. It will take vigorous and engaged political leadership to maintain the funding that has served as the cornerstone of the economy of the ABQ metro and El Norte.
The delayed and expensive rebuild of the Paseo del Norte/1-25 interchange has turned into a political roadblock for ABQ Mayor Richard Berry. That became especially so when the mayor's $25 million bond proposal for the project was overwhelmingly defeated by city voters Oct. 4. It's not that they didn't want the rebuild, it's that Berry and the city council tried to pull a fast one. They joined the Paseo bond with one for an unpopular sports complex and both blew up in their faces.
Berry did not own Paseo and its associated problems until that ill advised "logrolling" with the bond issue. But he does now and he is throwing a Hail Mary to try to recover from his election fumble. Berry and the council have now approved $3 million that could be leveraged into a $50 million bond for Paseo. They are hoping that will entice the Legislature and the Feds to come with matching money. The overhaul is ultimately going to cost at least several hundred million. By they way, that $3 million is the same money city voters thumbed their noses at October 4.
Odds for a legislative match of any city Paseo money are not good. And we all know what is happening with federal money these days. That has Berry's critics putting the heat on. One of them is former ABQ Public Works Director and Republican Bob Gurule who minces no words:
The Berry administration's ineptness to put together an effective political strategy to jump-start this project is amazing. A political strategy is needed before a coherent funding strategy can be accomplished, and you don't do that by issuing news releases.
I wonder how many trips the mayor has made to Deming, Santa Fe and the South Valley to visit with legislators (not to mention the congressional delegation), whose support he will need? Does he even know whose lead responsibility it is to reconstruct the Paseo interchange?
Why not involve the feds, state and local governments initially and get the project designed and shovel-ready with the money they have available? And with administrators running out his ears, you would think the mayor's strategy would be more coherent!
Before he pushed his "Berry Bonds," Paseo was just one of a number of difficult issues piled up on the mayoral desk, but by singling it out and failing to win at the ballot box, Berry created an opening for his political foes. They will make realization of Paseo a litmus test for failure or success of his administration. If Berry can somehow get dirt turned on the rebuild in the next two years, he can escape their clutches. If not, the path to his re-election could get as cluttered as rush hour at the now famous Paseo interchange.
We're not among those having panic attacks over the state of the state's pension fund for retired educators. The Educational Retirement Board fund rises and falls with the stock and bond markets and while it may be a smidgen underfunded, in our view raising the age at which an educator can start drawing a retirement check--say 60 or 62--will insure the fund will be able to keep sending those checks long into the future.
Reader Bill Croft has some more for us on this:
I attended one of those ERB listening sessions, where I raised a question about the six options given us, one of which will be presented to the next session of the Legislature. It was suggested that I go back to the original 42 options the ERB considered if I didn't like the six they chose. I did, and guess what? There's an option called "Study #2" which I think is the best, and is what you advocated in your Nov 3rd blog: "One change is needed to ensure the fund's long-term stability and one change only--a minimum retirement age."
You're right. The minimum age needed is 62 for the ERB's solvency goals, and nothing else has to change--no reduction of cost of living increases, no increase in employee contributions and no lowering of the final salary pension calculation. I don't understand why the ERB didn't include this among the final six options....
Thanks, Bill. The ERB may not have made it one of its final options, but the Legislature is sure to.
HANGIN' AT THE PIT
Mayor Berry & Blogger
We headed out to the pit with a posse of Alligators Wednesday night and took in the Lobo-Aggie game in one of the new spiffy sky boxes that go for $40,000 a season. (Hey, these were Republican Gators).
Mayor Berry was fresh from delivering his state of the city address when we bumped into him. When we asked him about re-election plans in two years, he said, "we worry about today." He admitted the city economy is "still tough" and believes a study he is having done on business competitiveness will help.
UNM is well into its search for a new president and it was announced Wednesday that a new football coach has been hired to clean up the program. There is an air of hope that after several years of disappointment on most fronts that the university can regain its footing. It has been around for well over a hundred years so we would not bet against a revival.
The packed Pit was its usual rockin' self but arch rival NMSU managed the win, 62-53. That was in spite of an intimidating crowd that sported flashing eyeglasses that sent dots of Lobo red dancing everywhere and roars that echoed loudly and deeply into the late autumn night....
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