Monday, January 20, 2014

New NM Econ Scare As Intel Layoffs Loom And More Gloom Unveiled On State's Future Prospects, Plus: CYFD Crisis Spotlighted  

With the exception of oil and gas, the economic momentum in our state in 2014 continues to the downside. The announcement that Intel will shrink its workforce by 5,000 worldwide sent shivers through the metro area. Intel laid off 400 at its Rio Rancho plant in 2013.

They won't say how much of a hit--if any--we will take in this latest round but optimists are about as plentiful as vegetarians at a matanza...

These are high-paying manufacturing jobs at risk--the kind that we were supposed to attract when the Legislature pushed through a last minute corporate tax cut earlier this year. But taxes have hardly anything to do with what's going on around here. We are being buffeted by global economic forces as exemplified by Intel and by a shrinking Federal government presence...

State government might be able to give us a reprieve by stoking the economy by increasing the amount of capital outlay projects and filling the many state government vacancies. But the austerity hawks and the recession deniers hold sway...

The WaPo came with a devastating look at the state's economic indicators based on a report from UNM. It should be must reading for the Governor and the 112 legislators who will begin a 30 day legislative session tomorrow. Among its grim highlights:

Population growth has slowed to practially zero, the state is now home to the widest gap between its wealthiest residents and its middle and lower classes; reliance on food stamps and Medicaid continues to rise and the real unemployment rate--including those who have given up is 14.1 percent. The full UNM report is here

It's enough to make a legislator cry in his complimentary martini at the Rio Chama.


Downtown ABQ is faced with a Depression level real estate vacancy rate of over 30 percent. It is death by a thousand cuts. The latest:

Downtown dwellers and workers will have one less dining option come February. La Esquina owner Roy Venaglia said he plans to shut down the 100-seat eatery at the end of this month. La Esquina had been in the First Plaza‚Äôs underground Galeria space since 1979, Venaglia said. He took it over in 1984.

The downtown death spiral shows no end in sight. Gap will abandon its corporate offices there later this year.

We seem to be repeating a cycle of the 60's when downtown was abandoned as shops fled for the NE Heights and the Interstate system replaced Route 66 as the primary traffic route through town.

The Federal Model Cities program helped stop the death march back then and subsequent mayors put their fingers in the leaking dike. Now it's Mayor Berry's turn to come up with something to bring life to the area. We don't envy him. A turn in the economic cycle here might do the trick, but that appears to be years away.


In 2002 the median sales price of a square foot of residential real estate in the city of Santa Fe and Santa Fe County was $150 square foot. And in 2013 a square foot was going for....drum roll please...$150 a square foot. (That excludes the Roundhouse where lobbyists pay a whole lot more for a square foot of the place).


Ortiz y Pino
We talked about upping Governor Martinez's request for $600,000 for new social workers for CYFD to triple that amount in the wake of the tragic abuse death of 9 year old Omaree Varela, but ABQ State Senator Jerry Ortiz y Pino says that's not the issue:

The number of vacancies in that CYFD division (child protective services) approaches 100 (15% of 800, though not all those are social workers; includes some administrators and some support). Conservatively, you can use the figure of $70,000 for each new hire. That's $7 million to be fully staffed in that division. But CYFD actually reverted $6 million back to the general fund this last year as budgeted but unspent personnel costs from the entire department. So we could get real close to full staffing without even adding any new money. 

Senate Finance Committee Chairman John Arthur Smith has already indicated he's willing to add more funding for raises and additional positions, so that's not really an issue. The real problem is CYFD can't hold on to workers once they've been hired because they are hiring non-social workers (degrees in other, related fields) instead of social workers and they are turning over as fast as they get hired because they aren't prepared for the demands of this job. So they hire 100...and 100 leave within six months for less demanding work elsewhere. Morale sinks with each vacancy and it leads to more and more turnover. Raises might attract professionally trained social workers and that should be done. But the management at the top is inexperience, in over its head and can't get out of the deep water.


State Auditor and Dem attorney general candidate Hector Balderas came with his long-awaited audit of NM Expo and the ABQ Downs late on Friday afternoon, just as we entered a holiday weekend. In other words, he wasn't shouting from the rooftops about his findings or calling for a vigorous investigation of that controversial 25 year racino lease awarded to the Downs by the Martinez administration. (The audit is here).

A spokesman for NM Expo took the opportunity to gloat over it all, saying that the awarding of the lease was all above board. But whether the lease deal was a pay to play deal is now in the hands of the Feds. They have plenty of evidence to investigate as reported here and elsewhere over the past several years. Auditor Balderas and Attorney General Gary King have washed their hands of the shadowy deal.

Balderas' report comes just weeks before the filing deadline for statewide political candidates. Speculation that he would get a strong challenge has dwindled as neither east side District Attorney Matt Chandler or former Dona Ana County District Attorney Amy Orlando have made a move. ABQ attorney Jim Baiamonte is the only announced R. Balderas is unopposed for the Dem nomination.

Now we are hearing that Las Cruces district judge Susan Riedel--a BFF of Susana--will be entering the AG race on the R side. All will be clear in early February when the filing deadline comes upon us.


We blogged last week about the hearing the Senate Rules Committee will conduct this legislative session over the administration's awarding of that controversial ABQ Downs racino lease. ABQ State Senator Jacob Candelaria points out the Senate and the House do have the power to subpoena witnesses--if a majority of Senators or Representatives vote for it. Senate Rules Chair and Dem Guv candidate Linda Lopez apparently does not plan to ask the Senate to give her subpoena power. The Governor's office calls the upcoming hearing a "political circus."

A political circus in Santa Fe? Okay. Somebody cue up "Send in the Clowns" and let's get this party started.

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