Wednesday, September 16, 2009

Bill's Big Foot Comes Down On Special, And: The Econ Beat: How's Your House? Plus: A Light Guv Candidate With TV Spots--Already? 

Big Bill is back playing hardball with key legislators. He deep-sixed for now their hopes that he would call a special session of the Legislature to deal with the huge budget shortfall for October 9. And he described the two sides as "far apart" in their efforts to agree on a way out of the mess that has left state coffers short by over $440 million for the budget year that started July 1. Richardson told KOB-TV the special will be in mid to late October, starting no earlier than October 15. Many lawmakers were hoping for an October 9 start because an inter-governmental meeting is scheduled for Santa Fe that week and many of them will already be in town. Well, boys and girls, maybe if you behave yourself and agree to the budget deal Bill wants, he will call the special for October 9. But not now.

Experienced negotiator Richardson played hardball in his TV interview, saying no layoffs, no furloughs, no tax increases and no cuts to education. He reiterated that he believes a three percent across-the-board cut in agency spending, combined with several other measures, will slay the budget monster. Lawmakers negotiating with the Guv think a four percent slash that does not exclude education is needed. Each percent is big money in a budget of $5.5 billion or so.

One lawmaker called the talks "extremely fluid" as each side games out their positions. The Guv has tangled with the state Senate repeatedly in recent years. There is no guarantee that there will be an agreement prior to the special. That would expose the fault lines in the state's majority party, setting off yet another standoff and perhaps giving the R's an opening.

Richardson sees his legacy at stake. The unraveling of the state's finances after an epic bull market is painful, but his relatively pain-free cuts fall short of what key lawmakers say is needed if they are to avoid having to go through yet another round of budget cuts down the road. But Bill could be gone from the road by then. His eye is on the next year, if that.

(On Tuesday he was again talking about Cuba, saying he's offered to help arrange secret talks between the Cuban government and prominent Cuban-Americans. But don't believe that speculation about Richardson maybe becoming a special envoy to Cuba. Got it?)

It's understandable how Richardson (and Denish) want to avoid alienating the Democratic base of labor, educators and other state employees. But are they setting expectations too high? Furloughs were barely avoided in the Bernalillo County court system Tuesday as the state came with an emergency cash infusion. And in this Great Recession furloughs have been standard operating procedure in literally dozens of states.

For now, Richardson and Denish seem to be saying "this too shall pass," that the spending party is only being temporarily interrupted. Where they see future punch bowls, others see dry holes. Stay tuned.


How's your house? Don Padilla, chairman of the Greater ABQ Association of Realtors, sees a city housing market that "looks like" it has hit bottom when it comes to pricing.

Housing is driven by jobs. The good news is that the large-scale layoffs that hit us during the heart of the recession appear to have subsided. But that doesn't mean we are adding good-paying jobs.

The increase in recent housing sales has been spurred in part by a generous federal tax credit for home buyers, by continued rock bottom interest rates and by declining prices that have created bargains. But the long-term health of the city housing market is going to closely track the job market as it always has. The official city jobless rate has hovered at around 7 percent, a high we haven't seen in decades and unusual for a town so insulated from the "real" economy by its plethora of government jobs. Many of the nearly 14,000 jobs we have lost in the past year or so--at Eclipse, Intel and in the crowded retail sector--are not coming back. Ever. We will need to rebuild from the ground up.

While Mr. Padilla's optimism about housing prices finding a floor may be on target, it does not mean prices are going to rise significantly anytime soon. And matching the peak prices and the number of homes sold in the metro area during the housing bubble, could be many years away. That means no easy home equity loans to use to go shopping. Then there's the more depressing matter of commercial real estate. You see the "available" and "for lease" signs everywhere. The unwinding of that bubble seems only to be getting started.


A development in the ABQ housing market you may not have heard about is how home sellers are having to reduce the listed price to attract buyers.

Trulia, Inc. announced that 25 percent of homes currently on the market in the United States as of August 1, 2009 have experienced at least one price cut.

Cities experiencing significant increases in percentage of listings with price reductions from June 2009 to August 2009 include:

Colorado Springs, CO – 27% increase in price reductions
Kansas City, MO – 25% increase in price reductions
Oklahoma City, OK – 24% increase in price reductions

Albuquerque, NM – 22% increase in price reductions

ABQ real estate sellers have been a tough bunch over the years. The steady increase in federal dollars and a slow, but steady growing private sector have provided a base of buyers that has protected real estate prices. It turns out that the law of gravity does apply to ABQ housing, even if it has been defied for most of the past fifty years.


Never mind that most of the candidates for the Dem nomination for lieutenant governor won't survive the pre-primary convention next March, there's already a forum scheduled for those who have announced or are considering--about seven in total. The group photo-op takes place tonight (Wednesday) in Santa Fe. The details: 6:30 to 8:00 p.m. at the NEA building 2007 Botulph.


One of the light guv candidates is already on TV. No, Lawrence Rael, head of the Mid-Region Council of Governments, has not bought political spots, but he is being spotted on ABQ cable TV promoting Rail Runner safety. Rael is featured prominently in the commercial with his name flashed on the screen. Will Rael take any heat for being on the spot when the race for light guv heats up? Maybe, but it's all legal and by the time anyone raises a fuss the scheduled spots will probably have all run.


The Rail Runner PR is not a free ride for Rael. Worries are popping up about how long it takes the commuter train to make it between ABQ and Santa Fe. We're already at an hour and a half and with more stops scheduled for the future It could hit two hours. The fear is that the Rail Runner will suffer passenger losses as drivers stay in their cars to beat the clock. If it happens, expect it to become an issue in the race for the state's #2.

Bea Sheridan
Speaking of light guv contenders, we have our third for the GOP nomination. Longtime party activist and registered nurse Bea Sheridan of ABQ has announced her candidacy. An excerpt:

...It is hard to bring good paying jobs to New Mexico when businesses feel we are not educating the workforce. This has got to change. We have to expect our children to succeed and give them every tool necessary to do so. We also have to make New Mexico’s business environment friendlier.

Sheridan says she is the author of two books on medicine, and is a registered nurse who runs the Pain Clinic at Lovelace Rehabilitation Hospital. The mother of three has been a resident of Albuquerque for 38 years.

We had fun speculating that the R's could have an all-female ticket by picking Guv candidates Susana Martinez and Janice Arnold-Jones. But one of them would have to agree to the number two spot. That's no longer the case with Sheridan in the contest. Brian Moore and JR Damron earlier announced their GOP Light Guv candidacies.


From the AP:

Former Gov. Bruce King is back home at his ranch in Stanley after surgery to adjust the leads on his pacemaker. A spokesman...said the 85-year-old former three-term governor is doing well after being released Tuesday from an Albuquerque hospital. Family members said King had been experiencing health troubles recently, due in part to the need to adjust the electrical impulses from the pacemaker, which regulates heart function. He underwent the surgery Sunday.


Mayoral candidate Richard Romero would not hire an additional 143 police officers to fight city crime, but would get the 143 on the streets by shifting existing police personnel. He says there are too many cops behind the desk. A campaign spokesman explains: "The department currently has about 1,100 officers. Richard would grow the percentage of cops on the street from 42 percent to 55 percent." In our Tuesday blog, we left the impression that Romero wanted to hire additional officers.

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