Via the Associated Press, the Department of Transportation tells us that "structurally deficient," for a bridge, sometimes means, "Old, but OK." So they are only sort of deficient. The Department of Transportation has no plans to do anything about a third of the structurally deficient bridges "that carry the most traffic in New Mexico." The story, printed in today's Albuquerque Journal continued, "Of the 20 busiest bridges that are considered structurally deficient, about 45% are scheduled for construction work or have undergone partial repairs." A arithmetic problem exists here; 45% of 20 is nine. I checked. Using a calculator. So, to say, "about 45%" must mean that 8.6 (or so) bridges on the repair list. Or maybe 9.2.
S.U. Mahesh, DOT spokesman and former Albuquerque Journal writer, assures us that all bridges in the state are inspected every two years. By the college students who inspect the roads?
Thursday, July 31, 2008
Tulsa
That's where I am this evening. I has forgotten, I guess, the mid-summer humidity. It's awesome. And oppressive. Thank God for New Mexico and the privilege of living there.
Wednesday, July 30, 2008
Jobs:Wage Jobs in June
Unemployment always jumps in June as graduates hit the labor force. The seasonally unadjusted unemployment rate, statewide, for the month was 4.5%, up from 3.9% in June 2007. That's an (un)healthy jump, even given the dubious value of unemployment rate numbers. The seasonally adjusted unemployment rate continues up in double digit percentage figures. The June to June increases are:
New Mexico +15.5%; Albuquerque, +18.5%; Santa Fe, +20%; Las Cruces, +13.2%; Rest of the State (NM minus Albuquerque, Las Cruces and Santa Fe), +12.3%.
The seasonally adjusted rate hung under 4% at 3.9%.
Statewide, the labor force grew 11,900 in June, but employment was up only 6,100. Translated, unemployment went 5,800.
For Santa Fe, June should be a month of adding tourism jobs. This year Santa Fe lost 200 wage jobs in June and "employment" dropped 400.
For the Rest of the State, wage jobs grew 2.2% or 6,900. That's 84% of the state's 11,900 new wage jobs created between June 2007 and June 2008.
New Mexico +15.5%; Albuquerque, +18.5%; Santa Fe, +20%; Las Cruces, +13.2%; Rest of the State (NM minus Albuquerque, Las Cruces and Santa Fe), +12.3%.
The seasonally adjusted rate hung under 4% at 3.9%.
Statewide, the labor force grew 11,900 in June, but employment was up only 6,100. Translated, unemployment went 5,800.
For Santa Fe, June should be a month of adding tourism jobs. This year Santa Fe lost 200 wage jobs in June and "employment" dropped 400.
For the Rest of the State, wage jobs grew 2.2% or 6,900. That's 84% of the state's 11,900 new wage jobs created between June 2007 and June 2008.
Monday, July 28, 2008
Infrastructure: Bridges
"Bridging the Gap: Restoring and Rebuilding the Nation's Bridges," is a report released today by the American Association of State Highway and Transportation Officials.(www.transportation.org)
New Mexico has 3,850 bridges with 698 or 18.% "deficient," Of the deficient, 404 are "structurally deficient" and 294 are "functionally obsolete." The count may be a little higher after this weekend's flood in Ruidoso.
White no comfort can be taken from New Mexico's performance, most states are doing worse, though our neighbors, as usual, are doing better. Arizona has 7,350 bridges with 10.6% deficient. Colorado has 8,350 bridges with 16.8% deficient. At the other end, Kentucky has 13,600 bridges with 31.5% deficient. The percentage leader is our nation's capitol, Washington, D.C., which has a mere 245 bridges but with 62% deficient. Take that, tourists!
New Mexico estimates it has some $220 million in bridge needs, but can fund only about $13 million per year, the report says.
The problems are traffic, cost, age, safety and needed new bridges. The report says, "The number of structural
repairs needed on bridges increases
proportionally with their age. Data
from the National Bridge Inventory
demonstrate how structural repair
needs increase as bridges approach
their 40th year. Today, about 50 percent
of all bridges, when measured in terms
of area, are between 35 and 55 years
of age. While 50 years ago the nation
faced an historic period of bridge
construction, today it faces an historic period of bridge repair and reconstruction."
AASHTO's first answer is to spend a lot more money. The money will have to come from tolls and "an overall increase in tax revenues." The other answers are research and development, systematic maintenance and public awareness.
AASHTO, being the state highway officials group, doesn't suggest that somehow along the way state highway officials have messed up. Of course not.
New Mexico has 3,850 bridges with 698 or 18.% "deficient," Of the deficient, 404 are "structurally deficient" and 294 are "functionally obsolete." The count may be a little higher after this weekend's flood in Ruidoso.
White no comfort can be taken from New Mexico's performance, most states are doing worse, though our neighbors, as usual, are doing better. Arizona has 7,350 bridges with 10.6% deficient. Colorado has 8,350 bridges with 16.8% deficient. At the other end, Kentucky has 13,600 bridges with 31.5% deficient. The percentage leader is our nation's capitol, Washington, D.C., which has a mere 245 bridges but with 62% deficient. Take that, tourists!
New Mexico estimates it has some $220 million in bridge needs, but can fund only about $13 million per year, the report says.
The problems are traffic, cost, age, safety and needed new bridges. The report says, "The number of structural
repairs needed on bridges increases
proportionally with their age. Data
from the National Bridge Inventory
demonstrate how structural repair
needs increase as bridges approach
their 40th year. Today, about 50 percent
of all bridges, when measured in terms
of area, are between 35 and 55 years
of age. While 50 years ago the nation
faced an historic period of bridge
construction, today it faces an historic period of bridge repair and reconstruction."
AASHTO's first answer is to spend a lot more money. The money will have to come from tolls and "an overall increase in tax revenues." The other answers are research and development, systematic maintenance and public awareness.
AASHTO, being the state highway officials group, doesn't suggest that somehow along the way state highway officials have messed up. Of course not.
Friday, July 25, 2008
Jobs: June
Sorry about the delay in this post. Google went down (Google went down?) just as I was completing it.
The Department of Workforce Solutions slipped their monthly employment news release onto their Web site (www.dws.state.nm.us/dws-Mnews.html) slightly before the work day ended July 25 and just a day later than promised.
The main movement in the numbers was only a tenth of a percentage point, but in the undesired direction. For June, New Mexico's unemployment rate stands at 3.9%, up from 3.8% in May, continuing a trend of increases. The job growth rate was 1% in June, down from 1.1% in May and reversing a several month strong of increases.
At 4%, the employment rate in the Albuquerque metro area beat the state and increased faster, up two tenths of a percentage point from May, For the June over June year, Albuquerque has added 700 jobs for a growth rate of 0.2%. Educational & health services, hardly a proper pillar of an economy, added 1,500 jobs which means that all the other categories together lost 800 jobs.
The unemployment rate the other three metro areas—Santa Fe, Farmington and Las Cruces—increased three tenths of a percentage point from May. The Las Cruces unemployment rate was 4.3% for June with Santa Fe at 3.4% and Farmington at 3.%.
Metro Job growth was:
Albuquerque - 0.2%.
Farmington - 3.6%.
Las Cruces - 1.2%.
Santa Fe - -0.3%.
For the week ending in June 28, 1,104 people filed new claims for unemployment insurance compensation, up 105 from a year ago. For the July 5 week, 960 filed, down 249. (Down for the first time in weeks.) For the July 12 week, 1,273 filed, up 190.
The Department of Workforce Solutions slipped their monthly employment news release onto their Web site (www.dws.state.nm.us/dws-Mnews.html) slightly before the work day ended July 25 and just a day later than promised.
The main movement in the numbers was only a tenth of a percentage point, but in the undesired direction. For June, New Mexico's unemployment rate stands at 3.9%, up from 3.8% in May, continuing a trend of increases. The job growth rate was 1% in June, down from 1.1% in May and reversing a several month strong of increases.
At 4%, the employment rate in the Albuquerque metro area beat the state and increased faster, up two tenths of a percentage point from May, For the June over June year, Albuquerque has added 700 jobs for a growth rate of 0.2%. Educational & health services, hardly a proper pillar of an economy, added 1,500 jobs which means that all the other categories together lost 800 jobs.
The unemployment rate the other three metro areas—Santa Fe, Farmington and Las Cruces—increased three tenths of a percentage point from May. The Las Cruces unemployment rate was 4.3% for June with Santa Fe at 3.4% and Farmington at 3.%.
Metro Job growth was:
Albuquerque - 0.2%.
Farmington - 3.6%.
Las Cruces - 1.2%.
Santa Fe - -0.3%.
For the week ending in June 28, 1,104 people filed new claims for unemployment insurance compensation, up 105 from a year ago. For the July 5 week, 960 filed, down 249. (Down for the first time in weeks.) For the July 12 week, 1,273 filed, up 190.
Thursday, July 24, 2008
Energy: Ethanol is Marginal
An article about ethanol is this subhead, "Shucking the hype yields a kernel of truth—oil will still dominate." No surprise there, but it is a point sometimes lost in the rhetoric about alternative and renewable energy. The article, "Ethanol: Economic Gain or Drain," is in the July issue of The Regional Economist, published by the Federal Reserve Bank of St. Louis (www.stlouisfed.org/publications). The article says,
"Greater use of ethanol would make a dent in the demand for oil, albeit a pretty small dent. (Using all corn grown in the U.S. to produce ethanol would replace only 12 percent of the gasoline used for transportation in the U.S.) Moreover, many experts contend that burning ethanol will lower greenhouse-gas emissions.
"These potential benefits must be weighed against the potential costs of ethanol production noted above. But there might be other costs.
"Furthermore, the long-term benefit from ethanol production depends on its viability when compared to conventional fuels. A repeat of the 1980s’ decline in oil prices would most probably lead to a considerable departure of economic resources from ethanol production. This development could create pressure to extend or increase the federal tax credit and the import tax. Hence, meeting the federal mandates set by EISA might require even larger subsidies and government outlays than are currently anticipated.
"One way to partly meet the federal (ethanol use) mandate would be to remove the federal import tax. This would allow imports of ethanol from Brazil, which is the world’s second-largest ethanol producer. According to a recent report by the Congressional Research Service, Brazilian ethanol enjoys a significant cost advantage relative to U.S.-produced ethanol. Moreover, since Brazilian ethanol is made from sugar cane, allowing increased imports from Brazil would lessen the potential supply pressures on U.S. feed grain production noted above."
"Greater use of ethanol would make a dent in the demand for oil, albeit a pretty small dent. (Using all corn grown in the U.S. to produce ethanol would replace only 12 percent of the gasoline used for transportation in the U.S.) Moreover, many experts contend that burning ethanol will lower greenhouse-gas emissions.
"These potential benefits must be weighed against the potential costs of ethanol production noted above. But there might be other costs.
"Furthermore, the long-term benefit from ethanol production depends on its viability when compared to conventional fuels. A repeat of the 1980s’ decline in oil prices would most probably lead to a considerable departure of economic resources from ethanol production. This development could create pressure to extend or increase the federal tax credit and the import tax. Hence, meeting the federal mandates set by EISA might require even larger subsidies and government outlays than are currently anticipated.
"One way to partly meet the federal (ethanol use) mandate would be to remove the federal import tax. This would allow imports of ethanol from Brazil, which is the world’s second-largest ethanol producer. According to a recent report by the Congressional Research Service, Brazilian ethanol enjoys a significant cost advantage relative to U.S.-produced ethanol. Moreover, since Brazilian ethanol is made from sugar cane, allowing increased imports from Brazil would lessen the potential supply pressures on U.S. feed grain production noted above."
Wednesday, July 23, 2008
Legislature: Special Session Agenda
The material below is the agenda, sent last week, to legislators about the coming special session. The conversation between the Governor and Legislative Finance Committee Chairman Sen. John Arthur Smith has gotten testy. In today's Albuquerque Journal, Gilbert Gallegos, administration director of communications and a former Albuquerque Tribune political reporter, used words such as "ridiculous" and "irresponsible" to describe Smith's questions about whether the state can afford to pay for health care changes proposed by the governor. In the agenda below, note that no dollar figures are attached to the health care package.
Sent: Thu, 17 Jul 2008 6:03 pm
Subject: 2008 Special Session
Dear Legislators:
Today the Governor announced additional items to be addressed during the anticipated special session, most importantly a significant package of measures designed to alleviate immediate economic challenges facing New Mexico’s working families due to high fuel and energy costs, and the rising cost of food staples. He also announced a one-time cash infusion to the GRIP highway package, and touched on the session’s main focus: Health care for all New Mexicans.
The CARE Package: Economic Relief for New Mexicans
The Cash Assistance Relief Effort, or “CARE Package”, amounts to approximately $211 million with the majority of relief going to working families and particularly those headed by single parents. The bulk of=2 0the package is one-time spending funded through the state’s $392 million additional one-time dollars in the most current consensus revenue figures.
The CARE package is comprised of the following components:
Cost of Living Tax Relief. This will be a rebate check sent directly to all residents of New Mexico who filed a 2007 personal income tax return. Amounts are adjusted according to income and household size, and range from a low of $75 for single high-income households to $500 for a family of five making less than $60,000. COST: $162.7 million, non-recurring.
A “Tax Holiday for the Holidays”. Following the popular “Back to School” sales ( gross receipts) tax holiday, the Governor proposes an additional 10-day tax holiday beginning just after Thanksgiving to give relief for the expensive holiday gifting season. This would be a ONE-TIME (i.e. CY2008 only) holiday. COST: $1.9 million, non-recurring.
Lengthening the “Back to School” Tax Holiday. Lengthen the period of the current early-August holiday from three to ten days. COST: $1.15 million recurring, beginning CY09 (special session won’t begin until after the ’08 holiday has already occurred).
Additional funding for LIHEAP and Weatherization Programs. $4 million each in one-time infusions into the LIHEAP and Weatherization programs to help with high home energy costs and energy efficiency measures. COST: $8 million, non-recurring.
Increasing the Working Families Tax Credit. Increase credit by 25%, from 8% to 10% of the federal earned income tax credit (EITC). COST: $7.8 million recurring.
Increasing Eligibility for Child Care Assistance to 200% of Federal Poverty Level. Income eligibility for CCA would increase from current 165%, to 200%FPL. This would cover approximately an additional 2,200 families by FY10. COST: $7.2mm FY09, $11.2mm FY10 recurring.
Supplemental Funding for School Bus Fuel. Additional funding to assist with higher fuel costs, to get us through to the regular 2009 session. COST: $3.2 million non-recurring.
GRIP
The Governor proposes a one-time cash infusion of $200 million into the GRIP program. ($100 million in non-recurring General Fund and $100 million in severance tax bonds.) This would do two things:
1. Complete approximately 90% of the GRIP projects;
2. Create thousands of jobs in communities around the s tate.
Health Care
Health coverage for every New Mexican remains the main focus of the special session. The Governor’s main issues surrounding the package are
1. Establishing a Health Care Authority with Administrative Consolidation of Certain Insurance Pools
2. Small Group and Individual Commercial Insurance Reform
3. Assuring Privacy and Developing Health Information Exchange and Electronic Medical Records.
4. Providing health care coverage for those currently without it
While the Governor remains fully committed to each of these components, he also acknowledged that he is willing to work with leadership and the general bodies to reach a consensus package that is both meaningful to citizens and passable by the legislative body.
Along those lines we will continue to meet with leadership and legislative work groups to come together prior to the special session date.
Sent: Thu, 17 Jul 2008 6:03 pm
Subject: 2008 Special Session
Dear Legislators:
Today the Governor announced additional items to be addressed during the anticipated special session, most importantly a significant package of measures designed to alleviate immediate economic challenges facing New Mexico’s working families due to high fuel and energy costs, and the rising cost of food staples. He also announced a one-time cash infusion to the GRIP highway package, and touched on the session’s main focus: Health care for all New Mexicans.
The CARE Package: Economic Relief for New Mexicans
The Cash Assistance Relief Effort, or “CARE Package”, amounts to approximately $211 million with the majority of relief going to working families and particularly those headed by single parents. The bulk of=2 0the package is one-time spending funded through the state’s $392 million additional one-time dollars in the most current consensus revenue figures.
The CARE package is comprised of the following components:
Cost of Living Tax Relief. This will be a rebate check sent directly to all residents of New Mexico who filed a 2007 personal income tax return. Amounts are adjusted according to income and household size, and range from a low of $75 for single high-income households to $500 for a family of five making less than $60,000. COST: $162.7 million, non-recurring.
A “Tax Holiday for the Holidays”. Following the popular “Back to School” sales ( gross receipts) tax holiday, the Governor proposes an additional 10-day tax holiday beginning just after Thanksgiving to give relief for the expensive holiday gifting season. This would be a ONE-TIME (i.e. CY2008 only) holiday. COST: $1.9 million, non-recurring.
Lengthening the “Back to School” Tax Holiday. Lengthen the period of the current early-August holiday from three to ten days. COST: $1.15 million recurring, beginning CY09 (special session won’t begin until after the ’08 holiday has already occurred).
Additional funding for LIHEAP and Weatherization Programs. $4 million each in one-time infusions into the LIHEAP and Weatherization programs to help with high home energy costs and energy efficiency measures. COST: $8 million, non-recurring.
Increasing the Working Families Tax Credit. Increase credit by 25%, from 8% to 10% of the federal earned income tax credit (EITC). COST: $7.8 million recurring.
Increasing Eligibility for Child Care Assistance to 200% of Federal Poverty Level. Income eligibility for CCA would increase from current 165%, to 200%FPL. This would cover approximately an additional 2,200 families by FY10. COST: $7.2mm FY09, $11.2mm FY10 recurring.
Supplemental Funding for School Bus Fuel. Additional funding to assist with higher fuel costs, to get us through to the regular 2009 session. COST: $3.2 million non-recurring.
GRIP
The Governor proposes a one-time cash infusion of $200 million into the GRIP program. ($100 million in non-recurring General Fund and $100 million in severance tax bonds.) This would do two things:
1. Complete approximately 90% of the GRIP projects;
2. Create thousands of jobs in communities around the s tate.
Health Care
Health coverage for every New Mexican remains the main focus of the special session. The Governor’s main issues surrounding the package are
1. Establishing a Health Care Authority with Administrative Consolidation of Certain Insurance Pools
2. Small Group and Individual Commercial Insurance Reform
3. Assuring Privacy and Developing Health Information Exchange and Electronic Medical Records.
4. Providing health care coverage for those currently without it
While the Governor remains fully committed to each of these components, he also acknowledged that he is willing to work with leadership and the general bodies to reach a consensus package that is both meaningful to citizens and passable by the legislative body.
Along those lines we will continue to meet with leadership and legislative work groups to come together prior to the special session date.
Tuesday, July 22, 2008
Infrastructure: Highways
Today’s Albuquerque journal had a lovely photo of a couple of college guys evaluating the pavement on N.M. 36 near Fence Lake. In fact, the story said this is the third summer students have traveled the state highways checking out things. The students are paid, starting at $12.50/hour plus expenses for lodging and meals.
Two things may be happening here, neither good. First the jobs may be make-work. Well, OK, that happens. As a student, before computers stepped in, I spent a month putting 10,000 pins into a map at the Land Office to locate oil wells.
The second possibility is that the Department of Transportation really needs the information. In other words, DOT has no other system of tracking the condition of our 27,000 miles of state highways.
I’m reminded of when the fire department came to my son’s Cub Scout meeting maybe 17 years ago. Somebody asked what would happen if there was a fire in the meeting place. The fireman said the first task would be to hook the hose into the fire hydrant in the next block because the hydrant nearest the building didn’t work. Never in my wildest dreams about infrastructure management would I have thought that a fire hydrant would not work. Of course, I also don't have dreams of any sort about infrastructure management.
I also figured DOT knew the condition of the state’s roads. Silly me.
While amazing on its face, this ignorance may be background for one item on the expanding agenda for the coming special session of the legislature—paying for 13 “badly needed” rural bridge and highway construction projects. Why only 13?
I was introduced to the state’s highway project list in March. The list is, dare I say it, “gripping.” And long. One metro Albuquerque project is to fix roads in Willard. (Yes, Willard is in the metro.) There are the sidewalk improvements in Lovington and Gonzales Road in Questa.
The recently released 2008 Government Performance Project of The Pew Center on the States ranks New Mexico's road infrastructure a D plus.
Courtesy of the Federal Reserve Bank of Atlanta, here is what infrastructure means. “A sound infrastructure supports economic growth and activity; increases in productivity are in turn linked to higher living standards, rising levels of employment and incomes, and lower prices for goods and services. Infrastructure also supports business investment and innovation and allows customers and products to reach each other ore easily; better roads foster faster and more efficient delivery of goods.”
The comment is from an Atlanta Fed magazine, “Econ South.” Find it at http://www.frbatlanta.org. The current issue is an infrastructure special.
Two things may be happening here, neither good. First the jobs may be make-work. Well, OK, that happens. As a student, before computers stepped in, I spent a month putting 10,000 pins into a map at the Land Office to locate oil wells.
The second possibility is that the Department of Transportation really needs the information. In other words, DOT has no other system of tracking the condition of our 27,000 miles of state highways.
I’m reminded of when the fire department came to my son’s Cub Scout meeting maybe 17 years ago. Somebody asked what would happen if there was a fire in the meeting place. The fireman said the first task would be to hook the hose into the fire hydrant in the next block because the hydrant nearest the building didn’t work. Never in my wildest dreams about infrastructure management would I have thought that a fire hydrant would not work. Of course, I also don't have dreams of any sort about infrastructure management.
I also figured DOT knew the condition of the state’s roads. Silly me.
While amazing on its face, this ignorance may be background for one item on the expanding agenda for the coming special session of the legislature—paying for 13 “badly needed” rural bridge and highway construction projects. Why only 13?
I was introduced to the state’s highway project list in March. The list is, dare I say it, “gripping.” And long. One metro Albuquerque project is to fix roads in Willard. (Yes, Willard is in the metro.) There are the sidewalk improvements in Lovington and Gonzales Road in Questa.
The recently released 2008 Government Performance Project of The Pew Center on the States ranks New Mexico's road infrastructure a D plus.
Courtesy of the Federal Reserve Bank of Atlanta, here is what infrastructure means. “A sound infrastructure supports economic growth and activity; increases in productivity are in turn linked to higher living standards, rising levels of employment and incomes, and lower prices for goods and services. Infrastructure also supports business investment and innovation and allows customers and products to reach each other ore easily; better roads foster faster and more efficient delivery of goods.”
The comment is from an Atlanta Fed magazine, “Econ South.” Find it at http://www.frbatlanta.org. The current issue is an infrastructure special.
Monday, July 21, 2008
Construction Outlook
NAIOP New Mexico, the Albuquerque centered commercial real estate developers group, had two lunch speakers today. One provided useful information. The other provided information that was interesting, though especially useful in the short term, and was different than promised.
Ken Simonson, chief economist for AGC of America, brought the value. In particular, at least for this industry observer, his observations about highway construction costs help frame the nasty transportation problem facing New Mexico. Construction costs are up 70% in the last five years. That is mostly because petroleum is the number one ingredient in building highways. The petroleum turns into asphalt and the diesel that fuels the big and small machines. Diesel fuel has nearly doubled to $.76/gallon since the beginning of 2007. Other petroleum-based construction materials are getting pressure. These include PVC pipe and vinyl pipe—basically anything made from petroleum.
For commercial construction, the producer price index is up 41% in the last five years as compared to 19% for the general CPI.
Non-residential construction comes under 11 categories, Simonson said. In dollar volume, all were up in 2007. All are expected to be up in 2008, but only by four to-eight percent. These dollar increases reflect materials cost.
Simonson chairs the forecast committee of the National Association for Business Economics. That post puts him in the top handful of economists nationally. A summary of NABE's latest quarterly outlook, released today, is available at http://www.nabe.com/publib/indsum.html.
Speaker number two was Lisa Martinez, director of the New Mexico Construction Division. Her topic was supposed to be, "Impact of Governmental Codes." She made repeated reference to "Governor Richardson's executive order" when one reference would have been fine. In so doing, perhaps she provided a clue to the administration's management approach.
Martinez's topic, other than the executive order, was a very general summary of the administration's green building goal, which, basically, is to be an early adopter of "advanced energy codes" from anywhere, but with modifications for New Mexico. Spending the two to-five percent more on green building approaches in new buildings will bring a ten-fold return over the building's life cycle, Martinez claimed, without explanation. Given the the artifice of accounting has little to do with life cycles, how exactly the accounting would work, she also did not explain.
Lobbyists be advised. Martinez mentioned, somewhat in passing, that "'point of sale' legislation may be considered in New Mexico." Such rules, she explained in no detail at all, require energy-related modifications in structure at the time of sale. Scary.
Ken Simonson, chief economist for AGC of America, brought the value. In particular, at least for this industry observer, his observations about highway construction costs help frame the nasty transportation problem facing New Mexico. Construction costs are up 70% in the last five years. That is mostly because petroleum is the number one ingredient in building highways. The petroleum turns into asphalt and the diesel that fuels the big and small machines. Diesel fuel has nearly doubled to $.76/gallon since the beginning of 2007. Other petroleum-based construction materials are getting pressure. These include PVC pipe and vinyl pipe—basically anything made from petroleum.
For commercial construction, the producer price index is up 41% in the last five years as compared to 19% for the general CPI.
Non-residential construction comes under 11 categories, Simonson said. In dollar volume, all were up in 2007. All are expected to be up in 2008, but only by four to-eight percent. These dollar increases reflect materials cost.
Simonson chairs the forecast committee of the National Association for Business Economics. That post puts him in the top handful of economists nationally. A summary of NABE's latest quarterly outlook, released today, is available at http://www.nabe.com/publib/indsum.html.
Speaker number two was Lisa Martinez, director of the New Mexico Construction Division. Her topic was supposed to be, "Impact of Governmental Codes." She made repeated reference to "Governor Richardson's executive order" when one reference would have been fine. In so doing, perhaps she provided a clue to the administration's management approach.
Martinez's topic, other than the executive order, was a very general summary of the administration's green building goal, which, basically, is to be an early adopter of "advanced energy codes" from anywhere, but with modifications for New Mexico. Spending the two to-five percent more on green building approaches in new buildings will bring a ten-fold return over the building's life cycle, Martinez claimed, without explanation. Given the the artifice of accounting has little to do with life cycles, how exactly the accounting would work, she also did not explain.
Lobbyists be advised. Martinez mentioned, somewhat in passing, that "'point of sale' legislation may be considered in New Mexico." Such rules, she explained in no detail at all, require energy-related modifications in structure at the time of sale. Scary.
Tuesday, July 15, 2008
Population: Abq & Grenville
Albuquerque's population—this is the city, neither Bernalillo County nor the four-county metro—was 518,271 on July 1, 2007, according to Census Bureau estimates recently released. Grenville's population was 21. The two are, respectively, the largest and smallest of New Mexico's 105 incorporated municipalities. If you have driven U.S. 87/64 from Raton to Clayton, you've been to Grenville.I haven't. But then I haven't been to Clayton either. Or Jal. Grenville's population was 25 in 2000. It took four years to drop to 21, a level maintained since 2004.
Albuquerque's population ranks number 34 among cities of more than 100,000 population, between Atlanta (the city) and Fresno. (Note: Finding Atlanta and Fresno in the same sentence has to be something of a surprise.) El Paso is 21st on the over 100,000 list with a 2007 population of 606,913.
Albuquerque had 449,380 people for the April 2000 census. The growth since then—68,891 new folks, net—puts Albuquerque at 50th on the seven-year growth list with a 15.3% increase. However, the city's 1.7% growth from 2006 to 2007 ranks 65th, suggesting the growth rate is slowing.
Over the seven years, McKinney, Texas, north of Dallas, had the fastest growth with a 112.5% increase. North Las Vegas, NV, and Gilbert, AZ, a Phoenix suburb, were second and third with increased of 83.8% and 82.3%. These were the only three cities with population growth of more than 80% for the period. McKinney started from a low base, a population of just over 21,000 in 2000.
Las Vegas and Phoenix, it should be mentioned, are two of the cities deepest in the real estate tank.
Albuquerque's population ranks number 34 among cities of more than 100,000 population, between Atlanta (the city) and Fresno. (Note: Finding Atlanta and Fresno in the same sentence has to be something of a surprise.) El Paso is 21st on the over 100,000 list with a 2007 population of 606,913.
Albuquerque had 449,380 people for the April 2000 census. The growth since then—68,891 new folks, net—puts Albuquerque at 50th on the seven-year growth list with a 15.3% increase. However, the city's 1.7% growth from 2006 to 2007 ranks 65th, suggesting the growth rate is slowing.
Over the seven years, McKinney, Texas, north of Dallas, had the fastest growth with a 112.5% increase. North Las Vegas, NV, and Gilbert, AZ, a Phoenix suburb, were second and third with increased of 83.8% and 82.3%. These were the only three cities with population growth of more than 80% for the period. McKinney started from a low base, a population of just over 21,000 in 2000.
Las Vegas and Phoenix, it should be mentioned, are two of the cities deepest in the real estate tank.
Sunday, July 13, 2008
Entrepreneurial Activity
New Mexico is toward the top of the bottom 18 states when it comes to entrepreneurial activity, accord to the Kauffman Index of Entrepreneurial Activity, 2007. (See http://www.kauffman.org/pdf/KIEA_041408.pdf). The bottom 18 have from eight (that's West Virginia) to 26.2 entrepreneurs per 100,000 people. New Mexico has 25. One might be tempted to put a nice face on this rank, saying, we're sort of in the middle, except for one thing. Seven of the 16 states in the top entrepreneurial group are among the 11 western states. Another, Oklahoma, borders New Mexico.
The other three Four Corners states out-perform New Mexico economically. Entrepreneurship looks to be one more reason.
The other three Four Corners states out-perform New Mexico economically. Entrepreneurship looks to be one more reason.
Energy: The Real Policy World
Every so often a group of stories illustrates a broader truth about a topic. So it was yesterday with the Albuquerque Journal metro page offered, one after the other, three small items about energy policy. Soothing words from politicos aside, these three bring a look at the real world.
First, there was a report that New Mexico Attorney General Gary King wants in the legal fight over whether the federal Environmental Protection Agency can move ahead with issuing an air permit for the proposed Desert Rock coal-fired generating station on Navajo Nation land. King opposes the move. Gov. Bill Richardson approved of King's intervention in the matter. The Gallup Independent carried a long story on July 7. (http://www.gallupindependent.com/2008/07july/071208.html)
The second story said the Bureau of Land Management (BLM), another federal outfit, on July 7 dismissed environmentalist protests of an oil and gas lease sale.
In the third story, the BLM has a request from Richardson to designate the Otero Mesa south of Alamogordo an area of critical environmental concern, whatever that means. The request appears to be another ploy in continuing efforts to prevent renewed oil and gas drilling in the area.
First, there was a report that New Mexico Attorney General Gary King wants in the legal fight over whether the federal Environmental Protection Agency can move ahead with issuing an air permit for the proposed Desert Rock coal-fired generating station on Navajo Nation land. King opposes the move. Gov. Bill Richardson approved of King's intervention in the matter. The Gallup Independent carried a long story on July 7. (http://www.gallupindependent.com/2008/07july/071208.html)
The second story said the Bureau of Land Management (BLM), another federal outfit, on July 7 dismissed environmentalist protests of an oil and gas lease sale.
In the third story, the BLM has a request from Richardson to designate the Otero Mesa south of Alamogordo an area of critical environmental concern, whatever that means. The request appears to be another ploy in continuing efforts to prevent renewed oil and gas drilling in the area.
Saturday, July 12, 2008
Population: Municipalities
New Mexico's 105 incorporated municipalities, by size. as of July 1, 2007. Source: Bureau of the Census. Released July 10, 2008. For the census Bureau's news release, see http://www.census.gov/Press-Release/www/releases/archives/population/012242.html. Analysis to come.
Albuquerque city 518,271
Las Cruces city 89,722
Rio Rancho city 75,978
Santa Fe city 73,199
Roswell city 45,569
Farmington city 42,425
Alamogordo city 35,607
Clovis city 33,182
Hobbs city 29,602
Carlsbad city 25,033
Gallup city 18,802
Deming city 15,277
Sunland Park city 14,225
Las Vegas city 13,539
Los Lunas village 12,115
Portales city 11,992
Artesia city 10,485
Silver City town 9,977
Lovington city 9,793
Espanola city 9,549
Ruidoso village 8,899
Grants city 8,876
Socorro city 8,518
Corrales village 7,865
Belen city 7,159
Bloomfield city 7,129
Bernalillo town 7,121
Aztec city 6,810
Truth or Consequences city 6,689
Raton city 6,584
Los Ranchos de Albuquerque village 5,480
Taos town 5,265
Tucumcari city 5,123
Bosque Farms village 4,002
Tularosa village 2,865
Lordsburg city 2,665
Eunice city 2,654
Ruidoso Downs city 2,651
Santa Rosa city 2,534
Milan village 2,481
Bayard city 2,376
Mesilla town 2,195
Clayton town 2,100
Jal city 2,062
Edgewood town 1,994
Questa village 1,870
Columbus village 1,846
Santa Clara village 1,826
Moriarty city 1,769
Hatch village 1,644
Estancia town 1,529
Capitan village 1,445
Hurley town 1,366
Pecos village 1,354
Loving village 1,295
Elephant Butte city 1,265
Dexter town 1,244
Hagerman town 1,174
Chama village 1,167
Springer town 1,164
Angel Fire village 1,118
Mountainair town 1,054
Texico city 1,035
Carrizozo town 1,029
Fort Sumner village 983
Logan village 952
Magdalena village 859
Cimarron village 832
Cloudcroft village 762
Tatum town 722
Melrose village 711
Cuba village 632
Tijeras village 495
Red River town 485
Williamsburg village 472
Vaughn town 463
Lake Arthur town 437
Jemez Springs village 396
Wagon Mound village 345
Reserve village 326
Eagle Nest village 278
San Ysidro village 254
Maxwell village 248
Willard village 247
San Jon village 239
Roy village 218
Elida town 180
Corona village 164
Des Moines village 147
Dora village 129
Virden village 112
Hope village 105
Grady village 95
Encino village 89
Mosquero village 87
Floyd village 77
Folsom village 62
House village 61
Causey village 60
Taos Ski Valley village 56
Grenville village 21
Albuquerque city 518,271
Las Cruces city 89,722
Rio Rancho city 75,978
Santa Fe city 73,199
Roswell city 45,569
Farmington city 42,425
Alamogordo city 35,607
Clovis city 33,182
Hobbs city 29,602
Carlsbad city 25,033
Gallup city 18,802
Deming city 15,277
Sunland Park city 14,225
Las Vegas city 13,539
Los Lunas village 12,115
Portales city 11,992
Artesia city 10,485
Silver City town 9,977
Lovington city 9,793
Espanola city 9,549
Ruidoso village 8,899
Grants city 8,876
Socorro city 8,518
Corrales village 7,865
Belen city 7,159
Bloomfield city 7,129
Bernalillo town 7,121
Aztec city 6,810
Truth or Consequences city 6,689
Raton city 6,584
Los Ranchos de Albuquerque village 5,480
Taos town 5,265
Tucumcari city 5,123
Bosque Farms village 4,002
Tularosa village 2,865
Lordsburg city 2,665
Eunice city 2,654
Ruidoso Downs city 2,651
Santa Rosa city 2,534
Milan village 2,481
Bayard city 2,376
Mesilla town 2,195
Clayton town 2,100
Jal city 2,062
Edgewood town 1,994
Questa village 1,870
Columbus village 1,846
Santa Clara village 1,826
Moriarty city 1,769
Hatch village 1,644
Estancia town 1,529
Capitan village 1,445
Hurley town 1,366
Pecos village 1,354
Loving village 1,295
Elephant Butte city 1,265
Dexter town 1,244
Hagerman town 1,174
Chama village 1,167
Springer town 1,164
Angel Fire village 1,118
Mountainair town 1,054
Texico city 1,035
Carrizozo town 1,029
Fort Sumner village 983
Logan village 952
Magdalena village 859
Cimarron village 832
Cloudcroft village 762
Tatum town 722
Melrose village 711
Cuba village 632
Tijeras village 495
Red River town 485
Williamsburg village 472
Vaughn town 463
Lake Arthur town 437
Jemez Springs village 396
Wagon Mound village 345
Reserve village 326
Eagle Nest village 278
San Ysidro village 254
Maxwell village 248
Willard village 247
San Jon village 239
Roy village 218
Elida town 180
Corona village 164
Des Moines village 147
Dora village 129
Virden village 112
Hope village 105
Grady village 95
Encino village 89
Mosquero village 87
Floyd village 77
Folsom village 62
House village 61
Causey village 60
Taos Ski Valley village 56
Grenville village 21
Friday, July 11, 2008
Uranium, The LFC and Environmentalists
Within ten years, uranium mining and milling activity in the Grants Mineral Belt of Cibola and McKinley counties could employ 3,400 annually. The projection comes from a new economic and fiscal analysis of uranium industry impacts. An outline of a coming 100-page report was presented to the Legislative Finance Committee in Chama yesterday.
A bit of drama came first. An environmentalist group sought a place on the agenda, presumably to counter the industry briefing in some way.
Without even generally identifying the group, LFC Chairman Sen. John Arthur Smith, a Deming Democrat, said: If you want to play, you must play nice and play by the rules. You haven;t done that, so today you don; get to play. Rules for appearing before the LFC, which Smith pointed out is a budget preparation group, include no advocacy, and requesting an appearance before the committee by contacting the chair, namely Smith, and contacting him in a timely manner. "There is a process," he said.
Being a committee chair, especially during the interim, has much to do with herding cats. Smith's was statement was extraordinary.
Smith is becoming more and more known for speaking his mind. The previous day, in reaction to a revenue forecast that high oil prices will bring the state an extra $400 million during the current fiscal year, Smith suggested a tax rebate. Gov. Bill Richardson, claiming, according to the Associated Press, that "New Mexico's economy is performing well" wants to spend the one-time money on a major recurring expense, expanded health care.
The industry presentation was led by Jon Indall, a Santa Fe attorney who works with the uranium industry. Bill Brancard, director of the Mining and Minerals Division of the Energy, Minerals and natural resources Department, gave a regulatory perspective. Dr. Anthony Popp, economics professor at New Mexico State University, presented the economic report. which was prepared under a contract with The Arrowhead Center Office of Policy Analysis at NMSU.
A new perspective on being a citizen legislator came from the LFC meeting place in Chama. The restrooms were maybe 50 yards away across the parking lot. This is dedication.
A bit of drama came first. An environmentalist group sought a place on the agenda, presumably to counter the industry briefing in some way.
Without even generally identifying the group, LFC Chairman Sen. John Arthur Smith, a Deming Democrat, said: If you want to play, you must play nice and play by the rules. You haven;t done that, so today you don; get to play. Rules for appearing before the LFC, which Smith pointed out is a budget preparation group, include no advocacy, and requesting an appearance before the committee by contacting the chair, namely Smith, and contacting him in a timely manner. "There is a process," he said.
Being a committee chair, especially during the interim, has much to do with herding cats. Smith's was statement was extraordinary.
Smith is becoming more and more known for speaking his mind. The previous day, in reaction to a revenue forecast that high oil prices will bring the state an extra $400 million during the current fiscal year, Smith suggested a tax rebate. Gov. Bill Richardson, claiming, according to the Associated Press, that "New Mexico's economy is performing well" wants to spend the one-time money on a major recurring expense, expanded health care.
The industry presentation was led by Jon Indall, a Santa Fe attorney who works with the uranium industry. Bill Brancard, director of the Mining and Minerals Division of the Energy, Minerals and natural resources Department, gave a regulatory perspective. Dr. Anthony Popp, economics professor at New Mexico State University, presented the economic report. which was prepared under a contract with The Arrowhead Center Office of Policy Analysis at NMSU.
A new perspective on being a citizen legislator came from the LFC meeting place in Chama. The restrooms were maybe 50 yards away across the parking lot. This is dedication.
Wednesday, July 9, 2008
Jobs: Wage Jobs in Rural NM
Just when we thought the Bush administration was spending all the money, something was stopped. That something is the production of detailed job numbers for some small metro areas including Farmington. This required some shuffling here. Further shuffling was required because the Department of Workforce Solutions annoyingly did not including the Las Cruces and Santa Fe wage job figures in their Labor Market Review publication.
Whine. Whine. Whine.
Having completed the shuffle, there appears the surprising news that rural New Mexico, including Farmington, is increasing wage jobs at a 1.9% rate (for 5,900 new jobs) from May 2007 through May 2008. This is faster than the state and the other three metro areas, Albuquerque, Santa Fe and Las Cruces. "Employment" grew 0.9% for the May-to-May period, faster than everyone except Las Cruces. Farmington, statistically a "city," probably explains a good bit of the rural performance because Farmington has been doing well in the recent past when its performance wasn't a secret. Even so, it's nice to see the folks out in the country on the up side of the numbers once in a while.
Note the one percentage point difference in rural growth of wage jobs and employment. As noted before, the numbers come from somewhat different places. Wage jobs everywhere grew faster than employment.
In percentage terms, the May-to-May increases in unemployment aren't good. The increase are:
New Mexico: 9.4%.
Albuquerque: 13.3%.
Santa Fe: 9.2%.
Las Cruces: 4.1%.
Rural: 6.9
Whine. Whine. Whine.
Having completed the shuffle, there appears the surprising news that rural New Mexico, including Farmington, is increasing wage jobs at a 1.9% rate (for 5,900 new jobs) from May 2007 through May 2008. This is faster than the state and the other three metro areas, Albuquerque, Santa Fe and Las Cruces. "Employment" grew 0.9% for the May-to-May period, faster than everyone except Las Cruces. Farmington, statistically a "city," probably explains a good bit of the rural performance because Farmington has been doing well in the recent past when its performance wasn't a secret. Even so, it's nice to see the folks out in the country on the up side of the numbers once in a while.
Note the one percentage point difference in rural growth of wage jobs and employment. As noted before, the numbers come from somewhat different places. Wage jobs everywhere grew faster than employment.
In percentage terms, the May-to-May increases in unemployment aren't good. The increase are:
New Mexico: 9.4%.
Albuquerque: 13.3%.
Santa Fe: 9.2%.
Las Cruces: 4.1%.
Rural: 6.9
Sunday, July 6, 2008
Unemployment
Initial claims for unemployment compensation continue to increase in New Mexico. For the week of June 7, claims were up 17 from the year before.
Week of June 14: +173.
Week of June 21: +202
Week of June 14: +173.
Week of June 21: +202
The Tesla Motors Plant
The disappearance from Albuquerque of the much ballyhooed planned Tesla Motors electric car manufacturing plant drew a question from an apparently unlikely source at last week's Economic and Rural Development Committee meeting in Albuquerque. What happened to the plant, asked Rep. Andy Nunez of Hatch, a farmer. Staff of the New Mexico Partnership, the state's contract recruiting group, gave a sort of a non-answer, mentioning the California-based Telsa is going through reorganization and adding, "We don't win them all."
Nunez then explained his curiosity. He said $5 million of the state infrastructure money promised Telsa had been plucked from a water trust fund and now he hoped the money would be returned.
Economic Development Secretary Fred Mondragon was a bit less generous to Telsa, mentioning the "recent instability of its management" the the New Mexico Business Weekly.
There is more, however. Telsa is a startup company with a brand new technology. This is called "high risk." When they work, such firms are the stuff of legend. Then there was the money that California's state government threw at Telsa.
Nunez then explained his curiosity. He said $5 million of the state infrastructure money promised Telsa had been plucked from a water trust fund and now he hoped the money would be returned.
Economic Development Secretary Fred Mondragon was a bit less generous to Telsa, mentioning the "recent instability of its management" the the New Mexico Business Weekly.
There is more, however. Telsa is a startup company with a brand new technology. This is called "high risk." When they work, such firms are the stuff of legend. Then there was the money that California's state government threw at Telsa.
Personal Income: 2008 First Quarter
During the first quarter of this year, personal income of New Mexicans grew 0.78% over the fourth quarter of 2007. The growth rate was the lowest in a year. Personal income grew 2.3% in the first quarter of 2007. The performance ranked 37th nationally and was the lowest in our four state region that also includes Arizona, Oklahoma and Texas. In Arizona, economically trashed by the real estate crash, income grew 1.1%. Personal income grew 1.2% in Colorado and Utah during the quarter.
Even worse for New Mexico, the growth of transfer payments such as social security and welfare led earnings and dividends by a big margin.
Even worse for New Mexico, the growth of transfer payments such as social security and welfare led earnings and dividends by a big margin.
Thursday, July 3, 2008
Job Growth: That Unemployment Rate
Yesterday I happened to visit with one of the state's senior economic development officials. During the chat, the official expressed comfort in New Mexico's unemployment rate remaining low. I offered the notion that like the emperor in the parade, the rate wears no clothes. Prudence, however, suggested checking with a real wizard, so I did. Tucker Hart Adams is the economic knowledge guru of Colorado. She said, the unemployment whether in Colorado or New Mexico "is a worthless statistic. You are only unemployed if you've looked for a job in the past four weeks and I am convinced that fewer people fall into that category. I think all of the people who found jobs for the first time during the boom of the 1990s and were the first to lose their jobs in the 2000s quickly said, 'I knew it was too good to be true' and didn't look for very long."
Wednesday, July 2, 2008
Political Notes: Participation
This article was written for the May issue of Capitol Report New Mexico. As has been mentioned here before, production of Capitol Report as a magazine was suspended due to slow advertising sales. For information on the possible re-leaunch of Capitol Report, email: hmorgan3@mac.com.
The author, Dr. Lonna Atkeson, is Professor and Regents Lecturer in the Department of Political Science at the University of New Mexico. We thank her for being part of Capitol Report New Mexico.
by Lonna Atkeson
In 1968 the Democrats nominated Hubert Humphrey, a man ultimately seen as an illegitimate party nominee because he did not compete in a single primary. The tumultuous events of that year, including the nomination of the Vice President, resulted in dramatic change in how we select the party nominees. Four years later, the Democratic Party, dragging the Republicans with them, went from a system that relied heavily on elites and party insiders to choose the party standard bearer to one that placed that decision primarily in the hands of primary and caucus participants –the rank-and-file of the party. The purpose of these reforms was to provide meaningful participation by creating a more open and democratic process allowing nearly all interested persons to participate in the selection process.
The parties, however, have always tinkered with the process, manipulating the process to advantage specific candidates or the economic or regional interests of some states over others, which influences voter turnout and consequently representation in terms of meaningful participation. One way to manipulate the process is through frontloading or the moving of a nominating event earlier in the nomination campaign. Since 1988 frontloading has become more prominent and in 2008 it was the most frontloaded ever with 22 nominating events scheduled a mere one month after the process began.
The effects of frontloading over time has been an erosion of meaningful participation as candidates have been chosen earlier and earlier in the process leaving many voters with only a mythical election to participate in. The GOP contest in 2008 is typical of what we have seen with the advent of frontloading.
There was a steady decline in Republican turnout as the incentives provided by a competitive contest decreased due to candidate winnowing and delegate accumulation for McCain approaching the magical number.
Something different happened as the Democratic Party came out of Super Tuesday, February 5, with a close, exciting, 2-person race. At first the turnout followed that of the GOP, declining sharply with each event past New Hampshire and as delegates begin to accumulate. But, with no clear winner after nearly 50% of the nominating events complete, Democratic turnout reverses course, surging upwards.
This is not what many party insiders want. They prefer the termination of potentially millions of voters’ meaningful participation in the process, as has happened in the Republican Party. They fear the power of competition and its potentially negative and divisive effects. Perhaps, however, these are unnecessary fears.
Although it is true that nomination campaigns tend to divide the party, general election campaigns help to rebuild party coalitions. The changing context from a within party race to a between party race creates a high information environment in which voters can reevaluate both party candidates based upon the more important general election contest about who is going to run the country. The general election campaign helps to unite the party around the party nominee and research has shown that in presidential contests divisiveness has very little affect in general election outcomes.
Competition and increased turnout also have other benefits for the party, in addition to the increase in meaningful participation for voters later in the process. Nomination campaigns are an environment in which the party has the opportunity to expand its base of support. Research shows that those involved in the nomination campaign, even for a losing candidate, often work for the party or party nominee in the general election campaign. Thus, the advantages of party building during presidential nomination campaigns outweigh the potential costs of an intraparty fight that is a natural part of a candidate centered process and offers a unique opportunity for new entrants to come into the party. With a shorter campaign, party expansion and recruitment may be less likely as voters do not have the time or inclination to become involved in a candidate’s campaigns before the race is essentially over. Thus, perhaps the lengthy, but exciting Democratic contest, as seen by the unexpected and unprecedented mobilization of millions of Democrats young and old, may hold additional benefits for Democrats as they turn to the interparty contest and the differences between the two major party nominees.
The author, Dr. Lonna Atkeson, is Professor and Regents Lecturer in the Department of Political Science at the University of New Mexico. We thank her for being part of Capitol Report New Mexico.
by Lonna Atkeson
In 1968 the Democrats nominated Hubert Humphrey, a man ultimately seen as an illegitimate party nominee because he did not compete in a single primary. The tumultuous events of that year, including the nomination of the Vice President, resulted in dramatic change in how we select the party nominees. Four years later, the Democratic Party, dragging the Republicans with them, went from a system that relied heavily on elites and party insiders to choose the party standard bearer to one that placed that decision primarily in the hands of primary and caucus participants –the rank-and-file of the party. The purpose of these reforms was to provide meaningful participation by creating a more open and democratic process allowing nearly all interested persons to participate in the selection process.
The parties, however, have always tinkered with the process, manipulating the process to advantage specific candidates or the economic or regional interests of some states over others, which influences voter turnout and consequently representation in terms of meaningful participation. One way to manipulate the process is through frontloading or the moving of a nominating event earlier in the nomination campaign. Since 1988 frontloading has become more prominent and in 2008 it was the most frontloaded ever with 22 nominating events scheduled a mere one month after the process began.
The effects of frontloading over time has been an erosion of meaningful participation as candidates have been chosen earlier and earlier in the process leaving many voters with only a mythical election to participate in. The GOP contest in 2008 is typical of what we have seen with the advent of frontloading.
There was a steady decline in Republican turnout as the incentives provided by a competitive contest decreased due to candidate winnowing and delegate accumulation for McCain approaching the magical number.
Something different happened as the Democratic Party came out of Super Tuesday, February 5, with a close, exciting, 2-person race. At first the turnout followed that of the GOP, declining sharply with each event past New Hampshire and as delegates begin to accumulate. But, with no clear winner after nearly 50% of the nominating events complete, Democratic turnout reverses course, surging upwards.
This is not what many party insiders want. They prefer the termination of potentially millions of voters’ meaningful participation in the process, as has happened in the Republican Party. They fear the power of competition and its potentially negative and divisive effects. Perhaps, however, these are unnecessary fears.
Although it is true that nomination campaigns tend to divide the party, general election campaigns help to rebuild party coalitions. The changing context from a within party race to a between party race creates a high information environment in which voters can reevaluate both party candidates based upon the more important general election contest about who is going to run the country. The general election campaign helps to unite the party around the party nominee and research has shown that in presidential contests divisiveness has very little affect in general election outcomes.
Competition and increased turnout also have other benefits for the party, in addition to the increase in meaningful participation for voters later in the process. Nomination campaigns are an environment in which the party has the opportunity to expand its base of support. Research shows that those involved in the nomination campaign, even for a losing candidate, often work for the party or party nominee in the general election campaign. Thus, the advantages of party building during presidential nomination campaigns outweigh the potential costs of an intraparty fight that is a natural part of a candidate centered process and offers a unique opportunity for new entrants to come into the party. With a shorter campaign, party expansion and recruitment may be less likely as voters do not have the time or inclination to become involved in a candidate’s campaigns before the race is essentially over. Thus, perhaps the lengthy, but exciting Democratic contest, as seen by the unexpected and unprecedented mobilization of millions of Democrats young and old, may hold additional benefits for Democrats as they turn to the interparty contest and the differences between the two major party nominees.
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