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Friday, January 27, 2017

Notes On the Great Downsizing Of New Mexico 

Of all the people you would have expected to be flocking to New Mexico as the baby boomers enter their 60's and 70's, it's the retirees. But the word is out and the gray-haired set is being warned away:

New Mexico ranks 45th in the country as a place to retire, according to the financial website WalletHub. The state’s ranking was especially hurt by its property crime rate, ranking 49th in that category, ahead of only Hawaii and Washington D.C. New Mexico ranked highest for its adjusted cost of living (23), cost of in-home services (25) ‘taxpayer ranking’ (26). Florida, Wyoming and South Dakota took the top three overall slots in the report. Rhode Island was at the bottom of the list. 

What would it take to improve the ranking? A massive investment in early childhood education, a complete revamping (and full staffing) of the ABQ police department, a continuation and strengthening of the most effective programs combating drug and alcohol abuse and a rebuild of the Children,Youth and Families Department emphasizing more and better social workers. That's for starters.

The Great Downsizing of New Mexico will include all of our higher education institutions and it is well underway at CNM in ABQ:

Like most higher education institutions across the state, CNM has faced budget woes. (The CNM president) said the school’s highest employee count had been around 3,000, and it’s now at 2,100. She added they have eliminated 24 senior level positions.

IN THE PITS

Over at UNM more signs that the Great Downsizing is still nowhere from being finished. The famous Pit will never again be what it once was, for a variety of reasons:

UNM’s average (basketball game) attendance ranks No. 27 in the country, according to the NCAA. That means the program’s oft-referenced streak of ranking in the Top 25 in attendance for the past 50 years could end in the 51st season of the Pit’s existence.
 

Many of us warned that the $60 million remodeling of the Pit should have been scotched in favor of a brand new facility for the new generation. Now with its awkward skyboxes, low quality junk food and young people with so many more entertainment options, we have an aging facility that gets half-filled with an aging audience. In this case sentimentality trumped sensibility.

LESS GRAND

Finally, we don't see a dysoptian future for our beloved state, just a less grand one. But there is reason for concern that we could be a bit optimistic. Here's our take:

The one subject verboten at the legislative session this year is Farmington. Let's explain. Over ten years ago natural gas prices peaked at around $13. That was the start of a horrific bear market that devastated the Four Corners region where so much natural gas (and oil) is produced. Today the bear continues to maul the region with gas prices in the low $3 range. Since 2010 San Juan has lost nearly 9 percent of its population, suffered devastating budget cuts and low tax collections. Drive around there and it looks like the Great Depression II.

But it's not something policy makers or legislators really want to think about repeating when it comes to the oil crash. It is inconceivable to most of them that oil prices could mimic natural gas and stay low for the next decade. But they need to rethink that. Oil prices peaked in the $120 barrel area in the middle of 2014. We have stabilized in the low 50's for the time being. But that drop has decimated the state budget giving us multiple budget cutting legislative sessions because about a third of the state's roughly $6 billion general fund budget comes from energy royalties and taxes.

Sure, oil could rebound to $100 a barrel, but this oil bear market is already one of the longest we've ever seen. New Mexico needs oil prices well north of $65 a barrel and for a good long time to replenish its coffers and to grow the budget to keep up with inflation. What do we do if prices stay stuck? No wonder Santa Fe doesn't want to talk about Farmington, but they need to.

Thanks for stopping by this week.

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