ABQ Councilor Sanchez
Another budget shocker appears to be in store for the state's largest city. ABQ City Hall insiders say business has slowed to a crawl, isn't expected top pick up steam anytime soon and that means a shortfall for the budget year starting July 1 of up to $40 million. That's the first authoritative word that top city planners expect this recession to continue. The city is already grappling with a $20 million shortfall for the budget year that goes until June 30. So far, layoffs from the city's 6,200 member work force have been avoided by not filling many vacant positions, but there could be bad news if this recession continues, says City Councilor and budget chair Ken Sanchez:

"We need to do everything we can to avoid throwing people out of work. That would only add to the economic problem. However, we may have to look at cutting employee hours if the numbers keep coming up short," Sanchez told me during a budget briefing I asked him to give our readers.

The councilor also told us the $40 million shortfall may be the high-water mark. He expects something more on the order of $30 million. The General Fund portion of the budget is about $466 million, so a $40 million shortage in it is a big deal. The West Side Dem councilor, who is up for re-election this year, agreed that the city may want to mimic the recent action of Governor Richardson and cut salaries of highly-paid employees who serve at the pleasure of the mayor. Richardson cut such paychecks for "exempt employees" by two percent in a symbolic measure to show that the budget burden will be shared.

The police and fire department budgets are still considered sacrosanct, but Sanchez told me the continuing overtime problem at those departments could get city council attention as he looks for ways to save money without laying off what he called "critical personnel."

Mayor Chavez will soon send the councilors his proposed budget for the fiscal year starting July 1. The nine member council will start going over it April 1. This may be the most challenging budget since the early 90's when then-Mayor Louis Saavedra laid off employees to make ends meet.

FOLLOWING THE MONEY--AGAIN

Don't let your eyes glaze over, but we have to clarify the story about Hewlett-Packard and its request for capital outlay money to build a customer service center in Rio Rancho. We received conflicting info this week from various sources including news accounts, so we took off our blogger hat and put on our press hat and asked the Governor's office for an official statement:

(The Hewlett-Packard request) is for $12 million in capital outlay for the next fiscal year. No additional capital outlay is requested beyond that. And just to clarify, the capital outlay is no longer split in thirds between the Governor, House and Senate. There are "statewide" and "local" projects. The Governor has pushed hard for "statewide" projects as part of his efforts to reform the capital outlay process, while recognizing that there are still local needs. A project like HP is considered a statewide project, or priority, because it is an economic development project that creates jobs.

Okay, thanks Guv. That being said, let's run some pro and con on this taxpayer money for the computer giant which says the center could eventually employ up to 1,300. To the e-mail:

In the face of Hewlett Packard's cash $10 billion cash hoard, the $12 million for their center is at once corporate greed and corporate welfare. Let 'em eat cake. We are a great place for them to do business. Try San Jose, CA just down the street from HP headquarters or anywhere on the west coast where work ethic went out with Cheech and Chong.

And from the pro-HP side:

With a full blown catastrophe underway nationwide, a $12 million deal to land one of America’s premier computer companies to New Mexico is worth the price of admission. Have you ever taken a look at how some cap outlay dollars have been spent in the past? At least this is on real deal economic development that will create jobs for New Mexicans

The HP funding became more of a hot button because of the recent collapse of state-aided Eclipse Aviation and the general outcry against "corporate welfare" in the wake of the federal banking and other bailouts. One of our insiders says he believes the legislative leadership will line up with the Guv for the HP money and it will pass this session.

WOULD YOU BUY ONE?

Speaking of Eclipse and wondering about those plans to resurrect it from bankruptcy. Remember during the debate on the proposed federal bailout of the car companies how GM and others argued that if they were forced to declare bankruptcy customers would shun their vehicles for fear that they would be defective? So how would prospective customers feel about buying a plane from a bankrupt airline? Somebody needs to be asking....

NO DOMESTIC TRANQUILITY