Friday, August 21, 2015

Summer In Santa Fe: Bean Counters Confront Commodity Chaos; Jumping Around On A Hot Tin Roof 

The chaos in the world commodity markets has the Santa Fe bean counters jumping around like cats on a hot tin roof, offering estimates on state revenue that could change as fast as the 10 day weather forecast. But Santa Fe and in particular the then-majority House Democrats of 2013 can blame themselves for some of the handwringing over the latest revenue estimates so dependent on where the crashing oil price ends up next year.

It was 2013 when the legislative Dems caved to Gov. Martinez and approved a  controversial corporate income tax. The Dems went on to lose the House in '14 to the R's for the first time in 60 years. In a little noticed section of the latest state revenue report we learn just how far off Santa Fe was back then in estimating the cost of that corporate cut:

House Bill 641 made several changes to the corporate income tax code. The fiscal impact report initially estimated that the changes would result in a revenue loss of $7.2 million in FY14. However, actual revenue in that fiscal year missed its forecast by more than the estimated $7.2 million cost. In FY14, net corporate income tax revenue was subject to a six- month forecast error of $82.2 million (41.8 percent), and an 18-month error of $143.4 million (72.2 percent).

That's a lot of revenue out the door, sports fans.

You probably won't want to tackle it on a summer weekend but when you get a chance the report linked above from the Department of Finance and the Legislative Finance Committee is chock full of such nuggets. Here's a couple from newsman Bruce Krasnow that really bottom line what is happening in our enchanted land:

New Mexico continues to lag the U.S. in the post-recession recovery, and employment in the state remains 3 percent below the pre-recession peak. Data suggests that earlier evidence of job growth was overly optimistic and the economy has begun contracting, notably in the manufacturing and construction sectors,” according to the economists.

And the population trends show that workers are in fact moving to other states where there is more opportunity. The trend of state-to-state out migration from New Mexico has grown, with approximately 25,000 people leaving [between] 2013 and 2014. This is the first net decline in New Mexico’s population in over 60 years.”

Okay, you ate your vegetables. Now go enjoy the pool. That includes the bean counters. They did a pretty good job, despite the commodity chaos.

Thanks for stopping by this week.

Reporting from Albuquerque, I'm Joe Monahan and. . .

This is the home of New Mexico politics.

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