Monday, August 06, 2012

ABQ's Anemia: Flat-Lined City Economy Hits Revenues; Berry Blames National Scene, Plus: The Panic At PERA; Why It's Misplaced, And: State Of The Dems: Gonzales Leadership Defended 

The stagnant, anemic economy in the state's largest city--the subject of numerous blogs here from readers, businessmen and women and yours truly--has now burst into full public view with the release of official records showing that for the budget year ending June 30 the city of Albuquerque's tax collections grew by only 1.9 percent, or basically at the rate of inflation.

Mayor Berry says his no growth, dead-in-the-water-economy can be blamed on the sluggishness of the national economy, but cities and states surrounding New Mexico have started to resume more solid growth, while we languish. Arizona, Colorado, Utah, Oklahoma, Texas and Nevada all experienced year-over-year job growth for the month of June. New Mexico was the only state in the region losing jobs.

The latest state figures show the Albuquerque metro was down 4,000 jobs in June 2012 compared to June 2011. It has been a mostly relentless decline in job losses here the past several years. The unemployment rate has come down only because job seekers continue to flee or give up and are no longer counted.

Like Berry, the nine member ABQ city council seems completely unperturbed by the disturbing trend that has taken hold here--stuff leaving and not much coming in. The four Dems on the panel seem to be suffering from a severe case of burn-out and the five R's are content to wait for the "invisible hand" of the market to revive our moribund economy.

The city still comes alive on Friday nights, with the restaurants and other venues jammed, but the rest of the week the town can barely stay awake past 8:30 p.m. (This weekend's back to school tax holiday also had the cash registers' humming).

The city's economic development department grows cobwebs--no announcements of anything significant or any hope for anything significant. The mayor touts "ABQ, The Plan," a minor league checklist of bike paths and the like that make for talking points at neighborhood meetings, but little else.

The city's business community, its political leadership and its media are not in a fighting mood. They take whatever comes their way as the new, downsized ABQ takes shape. That the flat tax collections are enough to keep what we have seems good enough.

The long, slow grind of the great Bear Market has returned ABQ to its past--a nice enough place to raise your kids--but not so nice when they start thinking about building a life here.

And dial down your expectations for the city's economic future, says one of our more informed City Hall Alligators. From downtown:

The economy does not show any signs of improvement. We need to change our revenue predictions for the next 5 years because the base will be lower. The city's economists thought tax collections would grow by 2.9% in 2012. They assume growth to be 3% in 2013 and if we do, that will be growth of 3% from a smaller number. The downward revisions are unavoidable. We are also going to be hit with tax cuts for manufacturing and construction in 2013. It is possible that revenue might be flat in 2013. If the mayor wants to pay for his "ABQ, The Plan," he will need to take money from all other departments including public safety. The only way to do that is reduce the number of employees or forgo services provided by contractors. Consumers are not going to spend enough to finance a bike loop or kayaking on the Rio Grande.

Mayor Berry is more than head strong about his ABQ Plan, but the way the Alligators see the city's biz scene, he would be well-advised to come up with a "Plan B."


On the state scene, the losses continue to far outweigh the wins. Here's another:

Holloman Air Force Base will not become the Air Force's new F 35 pilot training center, the Pentagon announced. Instead, the schoolhouse for the stealthy, fifth generation fighter will be Luke Air Force Base in Glendale, Ariz...The training center, which is expected to provide an estimated 1,000 jobs to Luke, will train pilots for the F 35 Lightning II joint strike fighter. In a statement, Air Force officials said Luke was chosen because of facility and ramp capacity, range access, weather and capacity for future growth.

The Arizona win also speaks to the muscle of Senator McCain, and when Senator Bingaman leaves next year the seniority of our congressional delegation plummets. Brace yourself.....


While today's state economy stumbles and struggles, some in Santa Fe seem to be more concerned about the citizens of 2041 than those living in the here and now. 2041, you say? Yep. That's the year the Public Employee Retirement Board has targeted to have its giant retirement fund cover 100% of present and anticipated future retirement checks for state workers eligible under PERA.
Trouble is, covering 100% of all liabilities would, among many other things, mean slashing cost of living adjustments for retired state workers (over 64,000), increasing by 1.5% the amount taken from  employee paychecks and upping by the same amount what the state contributes to the PERA fund.

These and numerous other proposed PERA changes are aimed at achieving a goal birthed in the soup of the new austerity and have little to do with fiscal prudence. They have much to do with an unfounded panic, or worse, an envy that there is still someone out there who can collect a monthly pension check.

PERAs own consultants admit that without any changes at all, the current fund of over $11 billion will be able to deliver retirement checks undisturbed for half a century:

Cavanaugh Macdonald recently completed a projection on the long-term solvency of the PERA Fund. Under the current plan, the PERA Fund will have enough assets to pay pensions until 2061.  

You mean the PERA board wants us to panic over who will be receiving PERA checks in the year 2062? It sounds like some kind of Woody Allen script.

Half the PERA fund is invested in the stock market and when it crashed in 2008 the fund crashed with it. That meant that the fund was projected to be able to cover only 70% of its far in the future liabilities instead of 93%. But with the market recovering, that percentage has gradually increased.

Rather than being so eager to downsize the living standards of current and future generations of New Mexico retirees, PERA needs to take a long and close look at how much it has in the stock market, the management of those funds and the fees we are paying for that management.

All of this imaginary economic panic simply confirms that Santa Fe is still lost in a fog--even after four years of economic pain. As neighboring states begin to add jobs and see at least some recovery from the devastating recession, we are looking at problems that don't even exist and that effect folks who have yet to be born.

New Mexico's legislators, who must approve any PERA changes, would be well-advised to entertain minor tweaks to PERA--if that--and get busy on solutions for the citizens of today and the next generation. We have faith that New Mexicans of 2062 will be able to chart their own course. It's the direction we are headed in 2012 that causes us to worry.


Former Sandoval County Democratic Party Chairman David Montoya panned the performance of the state Democratic Party here last week, saying Mayor Berry's 62% approval rating and Governor Martinez's 59% approval--as shown in our exclusive July polls--is a sign that the state Party is falling down on the job. In 2010, Montoya unsuccessfully challenged current chairman Javier Gonzales. Dem party Executive Director Scott Forrester says Montoya is jumping the gun and defends the performance of the party and Gonzales:

Let’s not get ahead of ourselves. Before we get to the 2013 Mayor's race or the 2014 Governor's race, we've got one of the most competitive US Senate races in the country. Also, we've got to hold New Mexico for the president this year and we have 3 Congressional races to win--one of which is a seat that was Republican for 40 years before Martin Heinrich won it. In addition, we've got to hold our House and Senate majorities in NM.

We are three months away from a make or break moment for NM Democrats, and that is and will remain the primary focus of Chairman Javier Gonzales and the Democratic Party. Any suggestion that we should be doing anything else at this point in the election cycle is reckless and ill-informed.

The truth is that the party...is as strong as ever under Javier's transformational leadership. He took over a party that had become heavily dependent on (former Governor) Bill Richardson and he built a strong, statewide fundraising base, recruited a slate of candidates that even you have given a great chance to win in November, and won 4 redistricting trials to stop the Governor's efforts to rig elections for Republicans.

We have built one of the strongest coordinated campaigns in New Mexico history, with a robust budget and large staff...We have helped keep Heather Wilson's negatives near 50 percent, and the state House and Senate are more organized than ever and fully integrated into our effort to keep and grow both majorities...

We are also well-positioned to hold the ABQ congressional seat--which many seem to have forgotten was a Republican seat for over 40 years--hold Jeff Bingaman's seat and keep New Mexico Blue for the President.

These aren't minor accomplishments, these are exactly the things that should be the priority of the party right now; they are a reflection of the strength of the Democratic infrastructure that Javier continues to improve. Anyone who doesn’t call it a strong party is using a different measuring stick or just plain doesn’t understand what the party does.


A reader writes of our mention of the selection of Taos County Commissioner Andrew Chavez as president of the NM Association of Counties:

Surely Andrew Chavez was not put in the position of NMAC president by Taos county voters. He only received 13% of the primary vote and will leave office at the end of the year.

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