Tuesday, February 03, 2015
Hopskotching Over Campaign '16 And Right Into '18, Tax Cut Fever Cooled By Fading Treasury, More To Flying Star Story? And Predatory Lending Bill Gets High Profile
There's buzz that ABQ Dem Congresswoman Michelle Lujan Grisham is eyeing the Guv's mansion in '18. The R's no longer fight for her seat which has gone deep blue so a tough '16 re-election battle is not in the offing for the two term lawmaker. But the coast will be anything but clear for the '18 Dem nod.
Attorney General Balderas, '14 contender Alan Webber, Santa Fe Mayor Javier Gonzales and a number of others have a long time to assess their chances. And don't rule out the prospect of a political outsider with a big wallet coming from out of the blue. Webber self-financed last year, but we're thinking of something of a much bigger order.
As for Lujan Grisham actually leaving her seat and running for Governor, we can't recall that happening in state history. Do you?
HOW TO PAY?
Gov. Martinez never met a tax cut she didn't like but in this environment she's pushing the envelope. Her tax cut proposal for small business owners would let them deduct their business income from their personal income taxes. It sounds pretty good but how would she pay for this targeted tax cut that would include business owners with less than $200,000 in taxable income and less than $350,000 in total net business income?
The oil price crash hasn't yet been fully factored into the state's revenue outlook for the next year. Does the Governor want to draw down the state's reserves to finance the tax cut? That's doubtful. And so is passage of this tax cut as lawmakers grapple with the new budget reality of reduced oil and gas royalties that are cramping their style.
We took note that a recent business press interview with Rio Rancho Mayor Greg Hull did not ask him about what could be shaping up as one of the big economic stories in the next couple of years. That would be whether Intel shutters its big manufacturing plant in the City of Vision and with it the remaining 2,900 or so employees there. Well, Hull has now been asked:
Do the fortunes of a large economic presence like Intel concern you?
When it comes to Intel, we're going to do whatever it takes as a city to retain them. The city is committed to it, the county is committed to it, the state at every level is committed to it. Everyone understands the value of what Intel brings to the table. I've spoken to Intel and they're committed to staying. New Mexico is still a good site for them.
We also heard KKOB radio's Greg Allen ask Hull about Intel's future. Hull says he has spoken to Intel and the company says it is committed to staying but it probably said that when it had over 7,000 employees out there years ago.
More on big biz and PNM--the only corporation headquartered in NM that's is listed on the New York Stock Exchange.
Reader Mary Ellen Gonzales pushes back against PNM spokesman Pahl Shipley's Friday blog here in which he argues for the big PNM rate increase that will be considered this year by the state Public Regulation Commission:
--Investing in more coal and nuclear is a crazy plan for New Mexican ratepayers and citizens.
--There have been numerous mistakes in PNM's financial runs, and the last biggy of over $350 Million PNM didn't find or admit to; New Energy Economy discovered the fuel cost error. Isn’t it ironic how all the errors have been in the Company's favor?
--The City of Farmington is not buying 65 MWs in San Juan 4 because it is an unreliable plant and there are other more cost-effective generation resources available.
--There is no San Juan partnership agreement, or future coal supply or price. There is uncertainty regarding mine ownership and there is a WildEarth Guardian lawsuit pending against the coal mine.
Seems like too much risk to me. What's wrong with investing in affordable solar and wind? PNM is only at 1% solar and 5% wind. New Mexico has loads of both. We have a long way to go.
PNM says it is "poised to build four more solar centers this year and meet a 15 percent renewable energy milestone."
FLYING STAR STORY
A reader who says they have info about the problems of ABQ's Flying Star restaurant chain which declared bankruptcy last week comes with this:
Besides the economy, Satellite Coffee/Flying Star had some internal management problems that they could not surmount in the current economy. Middle management and store managers knew something was wrong because the pricing of product to the stores from the commissary didn’t make sense. The individual stores had to increase prices but it had a lot to do with the insider problems?
A spokesman for Flying Star says it will have no reaction. An enterprising reporter might want to take a closer look at this one. There could be much more to the story.
We're getting a lot of news about what critics call predatory lending and the efforts in this year's legislative session to rein in the practice. But the payday loan industry has a bevy of lobbyists fighting any reform measure and insiders say the legislation could easily stall. Here's a reader perspective arguing for an interest cap:
NM is one of the few states that doesn’t have an interest rate cap. Rates can go as high as 3,287% for a “tax refund anticipation loan”. Public policy that makes NM a loan shark Nirvana explains why predatory lending franchises outnumber all the Starbuck's, McDonald's and fast-food restaurants in our state combined.
The Legislature could impose a 36% cap on these loans. Still a sky-high interest rate, but a huge improvement. The biggest challenge is many of our politicians took money from this industry. The predatory lenders also have more lobbyists on the payroll than any other Santa Fe special interest. Like the liquor industry used to, the goal is to wine and dine legislators and make certain their racket remains untouched.
Predatory lending reform might not garner the attention other bills do, but this legislation may have more impact on the economic well-being of struggling New Mexico workers and families than any other legislation this session, including the minimum wage."
The payday loan firms say it's imperative that they have the profit margins to provide the loans needed by so many New Mexicans who get by paycheck to paycheck. They say slashing the rate to a 36% cap could put many of their firms out of biz.
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