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Tuesday, January 29, 2013

Economy Finally Takes Spotlight At Roundhouse: Dems Come With Baby Step Plan On Jobs Crisis, Plus: New Data Shows Jobs Plunge Not Over, And: The Short-Term & Long-Term Outlook; How To Fix Both? 

They say the first step to solving a problem is admitting you have one, so even though they took only baby steps to address the state's job crisis, state House Democrats get credit for becoming the first branch of the New Mexican government Monday to formally acknowledge what all of us out here have known for several years:

The state is in a pernicious retrenchment and good-paying jobs are going the way of the Dodo bird. However, the cloud of denial that has surrounded it is gradually being blown away by a non-stop onslaught of undeniably negative news.

Before we take a look at the Dem jobs plan, let's glance at the latest batch of that undeniable data Read it, but try not to drop your coffee cup:

The ABQ area lost 2,300 jobs in the 12 months that ended Dec. 31, marking 13 consecutive months of year-over-year negative job growth rates, the New Mexico Department of Workforce Solutions said. The four-county area has been in near-constant recession for four years and now has as many jobs as it did in 2004...“At its highest, employment was around 396,800 jobs (in February 2008). After large losses throughout 2008 and 2009, Albuquerque employment has hovered around 370,00 jobs,” the report said.

Four years of constant recession. It's jarring, even for a state that takes to heart its unofficial motto of "Land of Mañana."

But if that didn't give you a jolt equivalent to a double espresso, here's one that should do the trick:

The construction industry (in the ABQ metro) continued its six-year-long slide, losing 1,400 jobs during the year for a 7.1 percent decline. The industry has not added jobs since September 2006. The sector now employs 18,400, the lowest December employment level since 1992.

1992? That's a 20 year low, Gators. And that's the big "D"--Depression.

No one wants to Californicate New Mexico, but neither do we want to outlaw hammers and nails.

JOBS, JOBS, JOBS

Which brings us to the House Dems jobs plan. (Even though State Senate Dems jumped in on the plan, it's really not theirs. We doubt the conservative coalition of D's and R's that rules that place on all things economic will allow much of it to go to the Guv.).

The jobs proposal calls for fast-tracking about $100 million in state construction projects contained in a $220 million package in an effort to jump-start construction--the hardest hit sector of the state economy.

Not bad. But Santa Fe could easily double that without hurting our financial standing. A $500 million package with half of that fast-tracked is more like it, but with the fiscal austerity hawks still perched on the trees outside the Roundhouse, we'll be lucky to get much of anything.

The proposal to remove the caps on the cash incentive offered the film industry is a no-brainer. Yes, we should do it--like yesterday. But it will cost us. The cap is currently $50 million a year. The legislation to lift the caps needs to be temporary--say three years--giving the industry enough certainty, but making sure we can have a mid-course correction if lifting the caps results in a cost explosion.

Besides sending some love to Hollywood, don't forget the state advertising budget. Why are we stalled out at a $1.5 million increase? At least double that to bring the loose-spending tourists in here.

The Dems also plan a 17 member "interim jobs council" to spark job ideas from reps from state government, universities, the national labs and business and labor. This may sound trite in light of our dire economic dilemma, but it could be the vehicle for creating some passion and urgency and arresting the defeatist attitude that has taken hold in some quarters during this multi-year downturn.

LEFT OFF THE TABLE

The Dems baby steps program left out the big picture moves and concepts that have been a staple of this blog and its readers for several years.

Our operating premise--we have no demand in this economy in the short term and need stimulus to get the ball rolling. And our long-term prospects can only be improved by an all-out attack on the social conditions crisis that plagues the state.

First, the short term. State employees making under $50,000 ought to get a pay raise of at least 2 percent. They haven't had one one in nearly five years and they will spend that money immediately.

Also, Governor Martinez has let the downsizing go far enough. We have shed thousands of state employees. She needs to find 500 positions to fill--needed positions--and start improving services. Those paychecks will be another stimulus.

The austerity crowd in Santa Fe--nominal Democrat and State Senator John Arthur Smith, Finance Department chief Tom Clifford, Governor Martinez and her "Fifth Floor"--need to get on board. They are falling behind the curve. A state reserve of nearly 15% of our $5.9 billion budget in a time of economic decline is a handicap, not a virtue--especially when 5% reserves are considered prudent.

Heck, take it up to 8% or 9% but not 15%. Get our money working to improve the economy and the lives of our people--now.

THE BIG PICTURE

The big picture is that wheelbarrow full of woes we all know so well and that was amplified over the weekend when it was reported that seven out of ten births in New Mexico are paid for by Medicaid.

We are a welfare state.

A constitutional amendment that would be submitted to voters for their decision is aimed at reversing this decades-long trend but it continues to languish in the Roundhouse. It would finance programs to get to children and their parents soon after birth. It needs a majority vote in the House and Senate to make the '14 ballot. The Governor could not veto it.

Look, if 70% of the babies coming into the world here already need government help to get here waiting to see how they are doing when they are five or six makes no sense.

New Mexico needs a change in values and culture when it comes to bringing up kids. You have to instill it before they get their first lunch pail. The amendment would allow limited funds from the state permanent fund to be used to finance these programs, We currently have $16 billion in our permanent funds and rank nearly 49th or 50th in most social condition standings. If not now, when?

DEBATING BIG PICTURE

Despite the existential threat to the state's outlook, three top business leaders are digging in their heels on that amendment, arguing that it is actually unconstitutional. They argue in an op-ed piece:

The appropriate way to address funding needs for early learning and childhood initiatives is through continued support for the current system by which the state, through its budget process, provides funding based on rigid criteria. Funds to address early childhood education including early reading and other early childhood assistance programs have already been proposed by the Legislature and the governor.

But haven't we been using that "current system" for years? Does anyone think it has worked? A constitutional amendment would let the people decide if they want a "peace corp" type of attack in an effort to reverse the decline that makes living in much of New Mexico akin to a third world experience.

It was Larry Langley of the Business Roundtable, Terri Cole of the ABQ Chamber of Commerce and Beverlee McClure of the Association of Commerce and Industry (Et tu, Beverlee?) who penned the hit piece on the amendment. We'll let former Dem. Lt. Governor Diane Denish supply the rebuttal:

These three, highly-paid folks obviously are completely out of touch with the challenges of raising children in New Mexico, the depth of the impact of poverty on our families and have no willingness to take a rational look at what it is going to take to close the achievement gap and make our kids and state more competitive.    

In fact, their op-ed didn't even really acknowledge the children, only the money. Ironic that this op-ed ran in the same edition where a local businessman was bemoaning the most recent statistic--70% of births are Medicaid funded--a reminder of why our children are 49th in child well-being. Keep the permanent fund permanent and our kids permanently in poverty is their message.    

Also, where are the jobs? Aren't business groups and their executives supposed to concentrate on job creation and economic development? 

Instead of leading with a vision for lifting New Mexico out of the doldrums economically, they are spending their time denying thousands of New Mexico children the opportunity to have a good start and a chance to succeed in school and life.

Yes, the rhetoric is getting harsher and it probably needs to. Otherwise, our generation is just managing the decline of this state--not building it for the future.

SPACEPORT BLUES

Speaking of the future, is that the Spaceport we hear starting a long flush down the toilet? Say it ain't so, Susana:

Virgin Galactic says it will start paying New Mexico rent on the nearly quarter-billion dollar Spaceport the state built for Richard Branson's space tourism business, but the company is doing so under protest and without waiving its right to walk away from the project. 

According to letters obtained by The Associated Press, Virgin Galactic says the state has not finished the work necessary to trigger activation of its $1 million-a-year rent. And it says if the work is not complete by March 31, it may stop paying or give notice to terminate its lease. Spaceport Authority Executive Director Christine Anderson says the state's obligations have been met. She has requested a meeting with the company.

House Dems also included liability legislation for the Spaceport in its jobs package. But with news like the above, we are wondering if we get a Spaceport even if we get the bill.

THE BOTTOM LINES

Another Chavez for mayor? Her ex-husband Marty Chavez held the job for three terms before being defeated by Richard Berry in 2009 and now Margaret Aragon de Chavez is telling friends she is taking a look at running for the job this year. Meantime, Terry Brunner of USDA in NM says he won't run for mayor. Hey, maybe he can manage Margaret's campaign.

La Politica is nothing if not entertaining....

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