Monday, April 11, 2016
On The Econ Beat As Energy Bear Inflicts More Pain; Farmington's Population Plunge; Lea County Licks Oil Wounds, And: Funding APD
There is really no other way to say it--the vicious bear market in energy prices is savaging sections of New Mexico, raising the question of whether it is different this time and if a bounce that would erase the damage will come in the years ahead.
In the Four Corners the slow-motion crash in natural gas prices has been unfolding for a tortuously long 8 years. Of the 381 USA metro areas Farmington's population in the past five years has now shrunk more than any of them.
24/7 Wall St. reviewed population changes in the 381 U.S. metro areas from July 2010 through July 2015.
1. Farmington, NM: Population growth (2010-2015): -8.76%; Total population: 118,737;
Per capita income: $36,197; Unemployment rate: 7.8%
Farmington’s population shrank by 8.8% over the last five years, faster than any other metro in the country. As is common in the nation’s shrinking cities, Farmington has a relatively high violent crime rate and relatively low incomes. There are approximately 535 violent crimes per 100,000 area residents, well above the national rate of 366 incidents per 100,000 people. The area’s annual per capita income of $36,197 is also well below the $47,615 income of the average American.
Realistically, there is little that can be done for Farmington in the absence of a rebound in energy prices. Its economy is overwhelmingly dependent on energy. That's why people are leaving in droves and seeking jobs in ABQ and other metros.
The energy collapse presents less of an existential threat to oil rich Hobbs in SE NM. The oil crowd there says they can make money even with the black gold fetching as little as $40 a barrel, about where it is today. Still, as CNBC reports unemployment in Hobbs has soared and oil drilling has dried up.
The mayor of Hobbs points to healthy cash reserves built up during the boom as a saving grace. Also, they've made some attempts at diversifying the economy there. But no one is kidding themselves. If oil stays in the $40 area for several years, Lea County could be in for it's own version of the Farmington blues.
Of course, the big picture is the impact on state revenues which have already been hammered by the epic downturn. If oil prices mimic natural gas prices and we are in the midst of anything close to an 8 year downturn, the only solution for education funding will be a knock down, drag out fight over eliminating tax exemptions, slowing or repealing the massive tax cuts of the past decade and/or tapping the state's $14 billion Land Grant Permanent Fund. We seem closer to all of those possibilities than current policy makers and legislators may believe.
RUTH'S VS. CHEESECAKE
Ruth's Chris Steak House could break the Cheesecake Factory record?
We speak of the approaching opening of of the upscale restaurant in ABQ's Uptown and its search for about 100 employees.
Cheesecake opened down the street from Ruth's in February and fielded an astonishing 10,000 applicants for the 200 jobs it filled, a number the company said appeared to be a national record.
Remember when the politicos and the economic planners fretted over the state's population getting too old? Now they tout plans to make retiree relocation a major economic plank. And remember when there was concern that the ABQ metro was attracting too many mediocre paying call center jobs and not better paying employment? No more. Now the economic elite says call center jobs are the greatest thing since rolled enchiladas.
Reporting on the transformational economic change in New Mexico and providing the analysis and context of what it means to this state's future. That's why New Mexico Politics with Joe Monahan has the real deal biz coverage you won't get anywhere else. . .
POLICING THE POLICE
NPR takes on the Justice Department ordered reforms at APD and finds a mixed bag. . And from the pages of Facebook, these comments on APD:
ABQ Chief Administrative Officer Rob Perry says the city can't come up with $4 million to help grow APD's depleted ranks. Yet the city can easily find $40 million in taxpayer money to pay APD lawsuit settlements. They also were able to find money to hire new APD majors and pay them over $100,000 a year, not to mention giving the command staff $6,000 to $12,000 retention bonuses. You can also add in the $4 million dollars found to pay for the APD Federal Monitor. . .
Councilor Pat Davis questions an increase of nearly $7 million for APD SWAT and K-9s in next year’s budget. The 2014 Department of Justice (DOJ) report was very harsh on SWAT Unit and K-9 when it found a “culture of aggression” within APD. Davis just found $7 million that should be used for rank and file raises and to grow the department. Let’s hope the council listens .
Albuquerque’s violent and property crime rates have dramatically increased and in 2015, murders spiked by 53%. The council needs to fund a major salary increase of up to 15% for sworn officers (excluding management) to improve recruitment, retention and morale. Sign on bonuses, tuition debt payoff and mortgage down payment bonuses need to be offered to new recruits. Until aggressive action is taken with APD recruitment, violent crime will continue to rise.
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(c)NM POLITICS WITH JOE MONAHAN 2016