Friday, January 13, 2012
Friday Clippings From Our Newsroom Floor: Tax Talk, Energy Prices, ABQ Housing Bear And Plunging Tourism, Plus: What's An Alligator, Anyway?
Let's start our clippings session with this one sent in from Santa Fe:
A wall-leaner comments on our views on the Guv's proposal to nix the state gross receipts tax for small businesses that pay less than $200 month in tax:
You are absolutely correct. The state's gross receipts tax (GRT) is a major impediment to business growth. However, the issue is much bigger. Local retail business cannot compete with out-of- state and international Internet sellers who pay no GRT, no local property taxes, no state or federal income tax, no corporate tax, do not hire local people and they are reaping billions from our local economies. We should eliminate GRT and find other tax resources for government spending.
The idea of subjecting all Internet sales to state gross receipts tax has been floated a number of times but gone nowhere. Gov. Martinez has said she will not approve any tax increases of any kind during her four year term.
IN THE CELLAR
The state is reaping royalty benefits from high oil prices. They are around $100 a barrel, but natural gas prices are at a ten year low, depriving New Mexico of another energy bull market that would fill state tax coffers:
Natural gas is cheaper this winter than it's been in a decade. Prices have dropped by more than 10 percent in the past week, including a plunge of almost 6 percent on Wednesday, as mild temperatures cut into heating demand and a production boom pumps up supplies.
The state says it pulls in about $4 million more for every $1 increase in the oil price, but gets $100 million more for every $1 boost in natural gas prices.
THE ABQ BEAR
The bear market in ABQ real estate means dramatically lower housing prices and in turn lower property taxes. That is cramping the city of ABQ. The bond issues to be put before voters next year will total just $110 million, down from $164 million that made the ballot last year.
These bonds are used to repair streets and such and with ABQ an aging city requiring more fixing up, this is concerning news. What will reverse it? Bringing good-paying jobs into the city would restore demand for housing and bump up its value, along with it property taxes that back the bonds.
Mayor Berry says part of the problem is the city siphoning money away from the capital budget for the general budget, but there's no denying that plummeting housing values are an anomaly in post-WWII ABQ and present policy makers with tough choices.
The WSJ this week took on the subject of New Mexico's collapsing tourism market:
Overnight tourist trips in New Mexico have dropped by nearly 10% in the past three years, and spending on everything from souvenir magnets to turquoise jewelry fell by hundreds of millions of dollars. When state tourism officials convened focus groups in Chicago, Houston and Los Angeles to ask prospective travelers about their perceptions of New Mexico, the same depressing descriptions kept cropping up: "Arid." "Barren." "Dull."
Shortly after that article hit the state announced it has picked a Texas firm to come up with some new ideas to advertise the state.
Tourism Secretary Monique Jacobson hopes to rebrand the state and make it more attractive to visitors, but we continue to pound the table over the ad budget to promote whatever new theme we come up with. At $2.5 million we are low. (And can't we deal in a New Mexico company or two to help out?)
Since statehood, tourism has been a prime driver for economic development. That is not the case for most other states and why it is misleading for policy makers to assert we can't step it up. And don't worry about being overrun with tourists. Have you seen Santa Fe lately? You can go bowling on the Plaza and not hit anyone.
Tourism doesn't provide that many high-paying jobs, but it does give thousands of working class New Mexicans a regular paycheck. We can't put out an extra couple of million to promote our attractions and boost their chances of staying employed? Come on, Santa Fe. This is low-lying fruit. Pick it up.
WHAT IS AN ALLIGATOR?
A new reader writes:
Dear Joe, I just started reading your blog today and need to know what you are referring to when you mention alligators. Thanks, Christy.
Thanks for tuning in, Christy. And the answer is:
Alligators are what I call my anonymous (and very well-informed) political sources. We find it an an apt description for the rough and tumble world of La Politica. An Alligator is someone steeped in New Mexico politics and who has a demonstrated track record of providing us accurate info on the stories that you can't get anywhere else.
We've been in this space since 2003--and covering politics in general for eons. We're now playing to a new generation of readers, Christy among them. We welcome them aboard in this new year--and maybe some fresh-faced Alligators as well.
Thanks for being with us this week.
Reporting from Albuquerque, I'm Joe Monahan
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