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Wednesday, January 09, 2013

New Year But Same Story: Jobs Crunch Hammers State; Politicos Seem Helpless To Stop It; Bear Market Also Tightens Grip On Four Corners; Legislature To Be Shadowed By Drumbeat Of Grim Jobs News 

Just in time for Legislature '13 the ugliest jobs depression in New Mexico since the Great Depression rears its ugly ahead again, reminding everyone that this stubborn bear market is not done with its devastation--At least not in our state.

The layoffs of 200 at Hewlett-Packard's Rio Rancho customer phone center will ripple through that already hard-hit city, flattening already depressed housing prices, costing the city treasury tax revenue and dampening retail business throughout the area. Some of the jobs paid over the $50,000 mark. But what else is new? The latest:

Dead last. That is New Mexico’s record for job growth over the past three years compared with the other 49 states. The details are not pretty. New Mexico is one of two states still showing negative jobs growth during the 34-month period. New Mexico’s nearby states--Colorado, Texas and Utah--have among the best economic growth in the nation. New Mexico even trails California and Nevada, which have crawled back from recession despite massive problems with home foreclosures.


The plain truth is that New Mexico is regressing. If it were not for continued good fortune in the oil fields of the Permian Basin making our state treasury more flush, we would be in even worse shape.

Up in the Four Corners in Farmington the natural gas bear market that every once in a while you hear is going to loosen its hold is still alive:

City Council members and Mayor Tommy Roberts are looking forward to making improvements to the city in 2013, but flagging revenues could create significant challenges, they say. The most significant will be balancing the city's budget and creating the budget for fiscal year 2014.
Farmington experienced six months of general-fund-revenue collection that was below what was expected, Roberts said. "It's manageable at this time, but with several months of falling numbers, we have to be prepared to deal with a number of different contingencies.

The most chilling prospect for the state now is a severe drop in oil prices. You remember that can happen, right? Back in the 80's oil prices crashed and so did the state coffers. But we were not in as deep an economic hole then as we are now.

With the state's economy flat on its back, the state--always overly dependent on the high price of oil--is now dangerously so.

THE PAIN 

Our short-term pain has turned chronic. The jobs disaster is like a drone flying over the state shooting down victims as policy makers and politicians flee at its sight. There is no consensus on what should be done. Old bromides like cutting taxes and regulations are trotted out regularly by the Governor. The Democrats, in disarray, have a hodgepodge of proposals but also lack a comprehensive plan.

Meanwhile, the labor force shrinks and the state's population growth slows to a trickle. It's clear what's happening--people are giving up and/or heading out. Many of the jobs listed in the paper can't be filled by a work force that is untrained for them. Look at this:

The 36th annual United Van Lines migration study is out...The St. Louis-based moving company tracks the states its customers move to and from over the course of a year...For 2012, the states with the highest percentages of outbound movement were, in order, New Jersey, Illinois, West Virginia, New York and New Mexico...Economist Michael Stoll says the study generally shows a movement of people to Sun Belt states in the South and West.

Looks as though New Mexico lost its notch in that Sun Belt.

The ongoing economic and social conditions crisis of the state just seems overwhelming and will take years to resolve.

The hopelessness and human suffering that is behind the unrelenting bleak headlines of New Mexican unemployment, foreclosures, poverty and poor education reminds us of a country western song made famous by Marty Robbins:

(Lord) this time you gave me a mountain. A mountain I may never climb. It isn't a hill any longer. You gave me a mountain this time..

Good luck, Santa Fe (and Washington).

THE HP PUNCH

The large layoffs at troubled HP in Rio Rancho has reader Stan Fitch writing that enough is enough:

The bleeding in the New Mexico economy continues as companies like HP move jobs to other states.  Governor Martinez and Mayor Berry need to start being part of the strongest advocates for attracting funding and industry to the state and city.  New Mexicans do not deserve being told to shut-up, take their lumps, and adjust to a new reality.  Aren't we already like number 48 or 49 in the nation? Will the R's sit idly by while New Mexico goes to number 50?  My great-grandfather Asa Betts Fitch, who co-founded the New Mexico School of Mines (now New Mexico Tech), would stare incredulously at these events in the state that he worked very hard to improve.

DID SHE SEE IT?

Hey, Susana. Did you see this?
 
Illegal immigrants would be allowed to get temporary driver's licenses under a bill approved Tuesday by the Illinois House. The Senate already has approved the bill, so it now goes to Gov. Pat Quinn, who has said he supports it. If signed by the governor, Illinois would be the fourth state to issue such licenses. Utah, Washington and New Mexico currently issue them. 

That can't help Susana's efforts to repeal licenses for undocumented immigrants here. She'll try again for the fourth time when the Legislature starts meeting next week.

NO STRONG BOX

We blogged how the Dems might put the Guv in a box and make her make a tough decision if they sent her a bill that cut the corporate income tax rate, but also increased rates for those making over $300,000 a year. However, Santa Fe attorney Stuart Bluestone says that's not a box that could hold a Governor:

Joe, I read your speculation about the Legislature passing the corporate tax cut the Governor wants, but only sending it to her with a bill that also includes a Democratic priority, like increasing taxes on the wealthy or a minimum wage hike, as a way to try to tie her hand and get something helpful enacted.  The problem with that approach is that under the NM Constitution the Governor has broad authority to line-item veto parts of revenue related bills.  That would mean she could excise--excuse the pun--the parts of any such tax bill package  that she doesn't like. So I don't think that option will work.

See that. That's why we're not in the Legislature. But the point holds--if the Dems don't start contrasting themselves with the Guv in the session, it will help keep those popularity ratings of hers high.

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(c)NM POLITICS WITH JOE MONAHAN 2013
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