Tuesday, November 25, 2014
Oil Makes For The Wealthiest Man In New Mexico As State Frets Over Boom's Possible End, Plus: Right To Work Isn't Fairy Dust
That $910 million was before the oil price tumbled from over $90 a barrel to the $75 range, but Chase, 83, probably isn't losing much sleep over it. . .
But many others are losing sleep over the oil price nosedive. It's going to mean many fewer dollars flowing to the state in the form of taxes and royalties. The first round of estimates predict it will mean a $50 to $100 million loss for the budget that begins July 1, 2015. But it may be much more as bear markets have a way of surprising on the downside just as bull markets surprise on the upside. . .
Little is mentioned of the possible loss of high-paying oil field jobs in the SE. According to the industry, those jobs pay 40% more than others in the state. . .
For travelers through oil boom country there should be a bright spot--those $200 a night hotel room rates should be history. . .
We hear much about the state's dependence on the federal government but not much about the state's dependence on the oil industry. Nearly 20% of the NM budget comes from oil and gas taxes and royalties. What if--as we suspect---the bull market in oil is over and the next bull market is years away?. . .Right-to-work is back as a New Mexico political catch phrase as the GOP takes control of the state House and will offer up the controversial legislation, but a veteran government official writes in that right-to-work is hardly a panacea for economic development:
Back in the early 80's the federal budget was being cut by the Reagan administration and at the same time oil prices were crashing. Democratic Gov. Toney Anaya rammed through tax increases to make up the millions in lost revenue. In this era tax hikes of any kind are immediately demonized and any lawmaker out in front of one risks getting his neck cut off on the campaign trail.
Interestingly, this time around it could be a Republican governor who in a few years might have to grapple with a revenue dilemma similar to the one confronted by Gov. Anaya.
When a journalist abandons ship to take a PR job with the government he's covered it's known as going to the "dark side." So it is for veteran Associated Press correspondent Barry Massey who after 35 years with the news service--21 of the them in Santa Fe--will become legislative liaison and PIO for the Administrative Office for the Courts. The AP has been decimated by budget cuts in recent years and Massey has of late been the sole Capitol presence for the legendary wire service.
Massey was known for his quality coverage of state government but his passage is a reminder of a perennial problem with journalism, especially in a job-starved state like this. With state government jobs beckoning, does the public get the aggressive and adversarial news reporting it should expect? Or do journalists who might have their eye on the "dark side" hold back? Remember how Big Bill seemed to hire half the press corp as state PIO's when he took over? Journalists, you can now begin your navel-gazing.
NO FAIRY DUST
I've talked to dozens of businesses in the last 5 years-some that are expanding and some that are relocating. Not once has Right to Work come up in our discussions. What has come up is the need for capital/financing, infrastructure, higher quality education and a better-trained workforce. Right to Work is not some fairy dust sprinkled on states that magically saves their economy. It's a convenient excuse some politicians use to steer our attention away from their ability to get at the tougher real issues holding back our economy and satisfy the interest groups that support them.
Why aren't business leaders talking about that? Maybe because it is going to take money--investing in ourselves--and that means government spending, something the neoconservative business community can't stomach. But, hey, it's their businesses getting killed. Maybe we should pass a right-to-die bill for them along with right-to-work.
IN THE SPOTLIGHT
When NM Rep. Ben Ray Lujan was named head of the Democratic Congressional Campaign Committee we blogged that you could soon expect him to join the talking heads on the cable news networks. Well, it didn't take long. Here he is making his MSNBC debut as DCCC chair with the network's Rachel Maddow. As expected it was a friendly interview but it revealed that Lujan can handle the spotlight as he dished up Democratic boilerplate with ease. The heat will be a notch higher if and when he enters the lion's den at Fox News. . .
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(c)NM POLITICS WITH JOE MONAHAN 2014. Not for reproduction without permission of the author