Older Boomers Pass Torch to Martinez

For all the talk of change under the Susana Martinez administration, one significant demographic has drawn nary a peep.
The older Baby Boomers have passed the leadership torch in New Mexico’s state government. The Boomers are those born between 1946 and 1965. The older group, say those over 60, were the ones responsible for The Sixties and communes in northern New Mexico.
The torch passing didn’t come without a fight. Diane Denish, age 60+, was the Democrats’ candidate for governor. Outgoing Gov. Bill Richardson is over 60.
Martinez is 51. She’s still a Boomer, but is 13 years younger than the oldest ones.
As of this writing, Martinez has appointed 13 cabinet members. The average age is 51. Jose Garcia is the oldest at 65, which makes him a year too old to be a Baby Boomer. Only one other cabinet appointee, Yolanda Berumen-Deines at Children Youth and Families, is over 60. Two of the appointees are in their 30s, young enough to be children of Garcia, Berumen-Deines, and the several appointees in their upper 50s.
The Boomers in their 60s still have plenty to contribute. But, overall, the demographic switch is good. Maybe this younger group really can change New Mexico.

Richardson Didn't Do It; WNMU Plans Graduate Program Expansion

I was going to post this item yesterday, but it seemed inappropriate to be crabby on Christmas Day.
The week is rife (“Rife” is journalist jargon meaning abundant or abounding.) with year-end and Richardson administration retrospectives. On Christmas Eve, The New Mexican posted an Associated Press interview with Gov. Richardson.
Two comments indicate the depth of delusion as the administration ends.
1. “Richardson contends the deficit isn't his fault and that New Mexico is in much better shape than other states.”
2. Quoting the Governor, "’I think we left the state in good shape. It's upbeat, positive, with more confidence and more possibilities for the future,’ he said.”
Then there is Western New Mexico University in Silver City, also in line for the delusion award. In a recent column I wrote about Western’s seeming proliferation of graduate degree programs in obscure topics. Amazingly, more will appear if the WNMU regents have their way.
A December 16 WNMU news release says, “At its December meeting, the Western New Mexico University Board of Regents approved a five-year academic plan for new degree programs.
“On the list includes six certificate programs, five associate degrees, two baccalaureate
degrees and 11 master degrees that will be proposed over the next five years.
“A doctorate degree (Ed.D.) in Leadership for Rural and Diverse Populations is scheduled for a 2011-2012 proposal. If approved, it would be the first doctorate degree offered at WNMU.”
Western’s total enrollment for the fall of 2009 was about 3,300, less than a large high school. The figure comes from Western’s online fact sheet. Note that the enrollment figures are more than a year old. The main campus had 2,600 students in the fall of 2009 with additional campuses in Deming, Gallup, Truth or Consequences and all of 31 students at the Lordsburg “campus.”
On the face of it, Western seems to offer an excellent example of the nonsensical proliferation among New Mexico’s universities. The University of New Mexico also has a campus in Gallup. The intuitive reaction is that UNM can run the Gallup location far more efficiently Western. For one thing, it’s much easier to get to Gallup from UNM’s main campus in Albuquerque, which is 140 miles from Gallup via I-40. Silver City is over 200 miles from Gallup with much of the route through the mountains.

Wage Jobs Drop 4,400 For Year, 3,700 For Month

New Mexico lost 4,400 wage jobs in the year from November 2009 to November 2010 and 3,700 jobs from October 2010 to November. This brought the number of wage jobs to 808,200 in November, a one half of one percent (0.5%) loss for the year. The performance allowed the Department of Workforce Services to say in its curious doublespeak, “Job growth has gradually improved from a low of negative 4.9 percent posted in October and November 2009.” I guess less negative is better.
The good new about this month’s report is that three critical sectors reported year-over-year gains: mining (+600); manufacturing (+1,600); and leisure and hospitality (+1,400).
Local government overall lost 500 jobs, but what is called “local government education” (the public schools, I think), lost 2,300 over the year, meaning that the rest local government added 1,800 jobs.
Because jumping on my usual “how can that happen” platform, it’s worth noting that some of the movement may be just statistical.
NMSU New Mexico Business Outlook electronic newsletter for December (http://bbrs.nmsu.edu/nmbizoutlook/December2010/article0.htm) puts it this way. “The employment situation statewide is mixed. The establishment survey, which measures job creation, indicates an increase of 0.6 percent in October 2010 compared to October 2009. This is the first positive year-over-year job growth statistic since the start of the recession in October 2008.
“While the establishment survey shows growth, the household survey, which measures employment, was down 0.3 percent. This conflict between the establishment and household surveys is common at the bottom of a recession and indicates that the recession is all but over.”
The December issue of New Mexico Business Outlook also has a dandy explanation of state government retirement plan issues.
While metro Albuquerque did add 700 jobs in November, the Duke City continues as the state’s metro loss leader, as it were, losing 6,700 wage jobs year-over-year. Albuquerque’s big losses were in construction (-3,100) and professional and business services (-3,800).
Santa Fe is the second place metro job loser, down 400 for the year. Santa Fe’s professional and business services sector lost 400 while state government added 100.
Farmington dropped another 200 wage jobs, year-over-year.
The math (6,700 plus 400 plus 200 minus 4,400) indicates that the rest of the state gained 2,900 jobs for the period.
Las Cruces is recovering, NMSU has observed for several months. The gain was 1,500 wage jobs for year with 1,100 of the gain coming in professional and business services.

Neighbors Grow Faster

In Tuesday’s post I messed up the percentage growth in New Mexico’s population between 2000 and 2010. This has been fixed. New Mexico’s population grew 13.2% for the decade and ranks 36th among the states.
The percentage growth for the decade of our neighboring states is: Arizona, 24.6%; Utah, 23.8%; Texas, 20.6%; and Colorado, 16.9%. Of these states, Utah sort of doesn’t count because that state’s growth from citizens following the Biblical injunction about going forth and multiplying. Utah’s “border” with New Mexico consists of one point at the four corners. Oklahoma, which does have a modest border with New Mexico, grew less fast than New Mexico.

Albuquerque 91st Best City for Business, Ties McAllen, Texas.

In the Marketwatch.com fifth annual ranking of best cities for business, Albuquerque tied for 91st out of the 102 cities considered. Albuquerque tied with McAllen, Texas, a border city with a per capita income among the nation’s lowest.
Placing ahead of Albuquerque were these regional and somewhat similarly sized cities: Omaha, 2*; Des Moines, 4*; Oklahoma City, 19*; Tulsa, 27; Boise, 42; Wichita, 44; Colorado Springs, 54*; El Paso, 73; and Tucson, 84.
Marketwatch metrics included tourism GDP, military GDP, economic stability, unemployment, personal income, population growth.
The 102 cities ranked are those with a population of more than 500,000.
* = As does Albuquerque, these cities have teams in the Pacific Coast League.

NM Population: Just Released

As of April 1, 2010, the Census Bureau says New Mexico's "resident population" was 2,059,179. The figures were released at 11 a.m. today, Eastern Time, about 90 minutes ago. Ten years ago, our population as 1,855,059. That's an additional 204,120 people in the decade, a 13.2% increase.
Another 8,094 people are considered to be the state's overseas population. The two figures combined to produce the "apportionment population" of 2,067,273.
New Mexico's population was 1,515, 000 in 1990, a 16% hike from 1980. Through 2000, New Mexico;s population added 340, 059 people, a 22% increase, double the growth rate through 2010.
The original estimate for New Mexico's 2009 population was 2,009,671. That estimate was derived from the 2000 census figure and looks to have been on the low side. There's no way the state added nearly 50,000 people in less than a year during a recession. The original 2009 estimate was released in December 2009.

Income Grows, Lab Wages Frozen, Chu Takes Cheap Shot at G.W. Bush.

Personal income in New Mexico showed a one percent increase (seasonally adjusted) in the third quarter of 2010 from the second quarter of 2010. That’s down from 1.9% growth in the second quarter. The third quarter performance was good for 11th place nationally.
Net earnings contributed 60% of the one percent increase with 40% from transfer payments such as unemployment and welfare.
At 0.14%, the farm sector showed the largest increase for the third quarter. Mining and construction earnings both grew 0.07%.
Earnings of federal civilian employees dropped 0.12% during the quarter.
Further earnings growth in the state will be hit by the wage freeze for national laboratory employees announced yesterday. The move affects about 17,000 New Mexicans, roughly split between Sandia National Laboratories and Los Alamos National Laboratory. National laboratory employees often earn more than $100,000.
A previously announced freeze hit 32,000 federal government employees in the state. The two freezes, affect 6.1% of the state’s wage earners.
The announcement of the freeze including a gratuitous cheap shot at former President George W. Bush and demonstrated the Obama administration’s continued unwillingness to accept responsibility for its financial policies after nearly two years in office.
As reported in the Albuquerque Journal, the release from DOE Secretary Steven Chu said, “As our nation continues to recover from these challenging economic times and we work to address the massive deficits we inherited….”
Dr. Chu conveniently overlooks the fact that the Obama administration’s deficit spending makes George W. Bush look like an amateur.

NM Employment Drop Leads Nation

From October to November, the largest percentage decrease in employment occurred in New Mexico with a 0.5% drop. New Mexico showed a seasonally adjusted drop of 4,100 wage jobs during the month, from 807,700 to 803,600.
The figures were released yesterday as part of the monthly Regional and State Employment and Unemployment Summary from the Bureau of Labor Statistics.
For the month, New Mexico’s unemployment rate added a statistically insignificant tenth of a point, growing to 8.5% from 8.4% in October.
Over the November-to-November year, the state lost 4,300 wage jobs.
Government lost 2,600 jobs during November. Construction gained 500 jobs during November after adding 1,500 jobs in October. At 45,400, the construction employment remains below the November 2009 employment of 45,700.

Single Family Homes Sales Up in November.

Maybe it was the warm weather during October drawing people out and about to look at new houses and make deals that closed in November. The metro economy, still well mired in recession, certainly isn’t what kept the October pending sales figure at 655, just two fewer than the 657 sales pending during September.
But the role of pending sales as an indicator of closed sales the following month stayed true for November, normally not a month when the number of homes sold increases from the previous month.
November 2010 broke the rule with the sale of 469 single family homes closed during the month, a 2.8% increase from October. The sale of 589 homes was pending during November, down 10% from October, suggesting a drop in sales for December. January and February usually are the two slowest sales months of the year.
Prices for single family homes in Albuquerque continued to increase on a year-over-year basis during November. The median price was $177,500 during November. The average price was $220,453. The median price improved for the third consecutive month with the average price up for the fifth month on a year-over-year comparison.
For townhomes and condominiums, the median price for October, $155,000, showed an 11% increase from November 2009 and tied May for the highest median price of the year. The average townhouse price was $152,363 during November, and 5,110 homes were offered for sale in metro Albuquerque.

Management: Richardson Administration Style

A conversation today with a Richardson administration cabinet secretary turned to management matters. This secretary makes "happy birthday" calls to staff, any staff, not just management. The call recipients typically are amazed and appreciative.
The situation brings to mind a meeting about workforce issues held in 2005 (I think) at St. John's College. Three cabinet secretaries were part of the meeting. Richardson addressed the group at lunch and belittled the cabinet secretaries, saying they were the least competent people in the room. For one of the three, I suspect Richardson was correct. But I found denigrating them in public to be astonishing and providing of an ugly clue to the character of the now out-going governor.

Richardson Tax Delusion Continues

The delusion is not Bill Richardson cut taxes while governor of New Mexico. The delusion is failing to recognize that he and his helpers raised bunches and bunches of other taxes. Today's Albuquerque Journal headline is, "UNM Fees Up 110 Percent Since '03." Student fees aren't tuition, the article reminds us. Fees go to athletics (ah, smell that football success..), the student union, groups and what the article called "other nonacademic expenses." Fees go to a government institution. By my perhaps expansive definition, taxes are any money going to the government.
Oh, and tuition has "only" increased 74% the past seven years.

LFC Revenue Hearing Quiet, Brief. Deficit is $200 Million or $400 Million

A crowd appeared for this morning’s Legislative Finance Committee General Fund Revenue Projection hearing. All 16 LFC members were there. Eight other legislators had a chair at the front of Room 307 in the Capitol in Santa Fe. The temptation is to say that House Speaker Ben Lujan hovered in the corner. Lujan was in a corner, but not hovering, rather he sat, almost hidden. The corner was dark.
Room 307 wasn’t full, as in wall-to-wall full. The audience, scattered across the room, included lobbyists, state staff, and business types such as Albuquerque Chamber exec Terri Cole.
Some key elements of LFC revenue projection meetings the past few years were missing today. The administration’s presentation lacked the gratuitous claims that Gov. Bill Richardson had built a grandly better economy for New Mexico. There was no defense of the movie subsidies. While revenue shortage estimates from the executive and the LFC remain far apart, the differences come from making reasoned assumptions one way or the other, so there was no need for the presenters to suggest one or the other was smoking something in creating revenue assumptions.
After the presentation, two things did not happen: many questions from LFC members, many of them harsh, and lectures from LFC members to the effect that administration projections were fantasy. For example, after past presentations, Sen. John Arthur Smith (D-Deming) has commonly wondered about the logic behind administration projection. Rep. Don Bratton (R-Hobbs) has repeatedly observed that oil and gas price assumptions had no basis.
The only post-presentation question came from Sen. Sue Wilson Beffort and was about the effect on the state of the federal government raising income tax rates by not extending the Bush tax cut. Wilson’s point was that a huge proportion of the state’s business are very small, either proprietorships or subchapter S corporations and the owners pay taxes as individuals. LFC staff lacked an answer and will do an analysis, but suspected the effect would be nasty.
With just the one question and no lectures, the presentation ended 45 minutes short of the scheduled two hours. Surprise.
The harmony was unexplained. Maybe—speculating here—it had something to do with being in transition to a new administration, which hasn’t yet revealed plans. Brian Moore, incoming deputy chief of staff and legislative director for Gov.-Elect Susana Martinez, did stop by and shake a few hands as the hearing began. Moore was an LFC member during his time in the legislature.
The only laugh-line of the day came with the report that bringing New Mexico’s unemployment down to 4.5% (assuming no labor force growth) would require employing 37,343 people, “the approximate number that would normally attend a football game at the University of New Mexico’s Lobo Stadium.” The chuckles (and more) at this analogy elicited an explanation. “Well, maybe not this year.” (UNM’s stadium has a capacity of 39,224, had held 44,000 and properly is called, “University Stadium.”)
Forecast revenue remains well short of “maintaining current services,” as the wonks like to say. The shortage is around $200 million (LFC), or maybe $400 million (administration), depending on assumptions.
The only annoying item in the executive branch presentation was a comment attributed to UNM’s Bureau of Business and Economic Research. The comment, standard BBER doublespeak as I see it, was “that New Mexico’s economy continued to improve during the third quarter of 2010.”
The truth is that our state’s economy deteriorated at a slower rate during the third quarter. However, that is not improvement and any description of slower deterioration as “improvement” is misleading at best.

Doyne Farmer and Knowing the New Mexico Economy

Physicist Doyne Farmer of Santa Fe and the Santa Fe Institute made the first paragraph of a Wall Street Journal Page one story yesterday. He also had the final paragraph of the 54.5 inch story all to himself as well as 11 inches in the middle.
Who is this guy and what the hell is he doing on page one of the Wall Street Journal?
To start, Farmer is local, a New Mexican. He grew up in Silver City with fellow physicist Norman Packard who actually was born in Silver City, according to Wikipedia. I first learned about Farmer from another big time media outlet, Smithsonian magazine. The article, adapted from a chapter in the 1987 book, Chaos, detailed the undergraduate exploits of Farmer and Packard at the University of California at Santa Cruz. Roulette was one focus and behind the game was a set of ideas that became important to the development of non-linear dynamics or chaos theory.
Now Farmer is a professor at the Santa Fe Institute in Santa Fe. The Institute spun out of Los Alamos National Laboratory in an intellectual sort of manner and is the center of a world-wide network of people working on non-linear dynamics.
Maybe Farmer is locally unknown because he never has joined the Santa Fe Chamber of Commerce or the Association of Commerce and Industry. Maybe his work is difficult. Certainly it wouldn’t be due to cluelessness on the part of local media. No. Never.
Farmer has even created jobs and wealth. Sale of Prediction Company to the Swiss Bank UBS, where Farmer was a founding partner, brought him what the Wall Street Journal article called “a small fortune.” Prediction Company (www.predict.com) is still in Santa Fe.
The point of the Farmer history here is that he is part of the intellectual infrastructure around our national laboratories. We do not know the size of this infrastructure, but put it together with the labs and it add to a huge and well-paid piece of the New Mexico economy. To disparage the national laboratories simply because the government provides the money is wrong.
The Wall Street Journal cares about Farmer because he and his “agent based model” are smack in the middle of the search for new economic models in reaction to the global economic mess. And it’s happening in New Mexico. But we don’t know that.

Efficiency Group and the Deck Chairs

Gov.-Elect Susana Martinez has put the Garrey Carruthers efficiency group back in business. Excellent.
In its previous life as the Committee on Government Efficiency, starting in December 2009 and ending with a report dated January 14, 2010, the group surveyed the low hanging fruit and found savings to recommend of $129 million.
The biggest item was $35 million from increasing state coverage insurance premiums. The group also tended to little stuff, finding about $700,000 in savings from eliminating and/or consolidating more than 35 boards, commissions and task forces.
Another ten items were recommended for further analysis including reducing the number of school districts and the number of institutions of higher education.
However, the group didn’t really look at eliminating activities of state government, except outdated boards and commissions.
Efficiency has to go beyond rearranging the deck chairs.
Here are a few thoughts:
First, recommend some actions that might be considered outlandish. How about eliminating Harding County? The latest housing estimates show the county with more housing units than people, clearly a statistical quirk of some sort but yet another indication that paying special attention to Harding County as a county is a waste.
Or eliminate the local government division of the Department of Finance and Administration. Any functions thought useful such as the capital budgeting advisory work can be parked elsewhere.
Opportunities exist in higher education.
Just looking at degree titles, I find New Mexico State University offers two doctoral degrees in educational administration. One is a doctor of education. One is a doctor of philosophy. The college of education at the University of New Mexico offers 11 (wow!) doctoral degrees in education. There is one in just “education” and with one each covering educational leadership, linguistics and psychology.
Consolidation and program reduction opportunities await.
Western New Mexico University offers ten graduate degrees. The listing for education masters degrees is confusing, but there appear to be 11. There are two ways to get a masters degree in social work, two MBA options and three ways to get a masters in “interdisciplinary studies,” whatever that is.
Highlands University has masters degrees in 16 fields including computing, business, human performance and sport, public affairs (absurdly promising “a comprehensive understanding of the social and cultural environment in the public and private sphere”) and social work. The latter, by the way, is well regarded. By contrast, I simply don’t understand how, with five campuses outside its Las Vegas home, Highlands can offer computing and business graduate degrees that are other than a complete waste. And of course, those five non-Vegas campuses should be eliminated.

Abq Loses 6,100 jobs. Rest of NM Gains 10,700 jobs.

The Department of Workforce Services says New Mexico added 4,900 wage jobs (seasonally not-adjusted) during October and 4,600 jobs, or 0.57% (that’s just over one-half of one percent, in case the decimal makes your eyes blur), again not seasonally adjusted, from October 2009 to October 2010. Metro Albuquerque lost 6,100 wage jobs over the year. That means the rest of the state gained 10,700 jobs.
The Bureau of Labors Statistics numbers reported yesterday were seasonally adjusted. DWS released the figures this morning. This is the first year-over-year job growth in 23 months, DWS says. Happy Thanksgiving.
Statewide, the year-over-year losers were: Construction (-1,000); wholesale trade (-900); retail trade (-2,900); transportation (-600); information (-600); professional and business services (-2,000).
The retail job loss suggests consumers are still hiding their wallets, bad news for state gross receipts tax collections and for the deficit-ridden state budget.
The big gainer, as reported yesterday, is state government with 2,900 net new jobs over the year. That’s amazing. Note that not all “state government jobs” are with the state government of New Mexico. That these numbers are seasonally adjusted says that mostly likely real growth has occurred. The other explanation is statistical trouble. The growth is in rural New Mexico. Only 500 of those 2,900 state jobs are in the metro areas.
The Albuquerque job loss was 1.6%. Albuquerque lost 3,700 jobs, year over year, in professional and business services. This sector hosts all sorts of technology companies such as engineering services firms, computer systems design and environmental consultants. However, about 20% of the sector’s employment consists of accountants and lawyers. Construction lost 2,600 jobs, year-over-year, in Albuquerque, which means that the rest of the state gained 1,600 construction jobs. Construction has the fewest jobs in Albuquerque since February 2000.
The beginning of the state’s recovery, such as it is, is driven by Las Cruces (up 2,000 jobs, year-over-year, a very nice 2.9% increase) and the rural areas. Santa Fe lost 100 jobs over the year while Farmington lost 400. Professional and business services leads the Las Cruces recovery with a 1,200 job, one-year increase.

NM Employment Grows! State Still in Trouble.

New Mexico added 6,300 wage jobs (seasonally adjusted) during October. With the 0.8% increase (to 810,800), New Mexico was second nationally in percentage job growth from September to October. The numbers were released by the Bureau of Labor Statistics today. The state also added jobs on a year-over-year basis, with a 4,600 job increase from October 2009.
The state’s labor force was 957,000 during October (seasonally adjusted), the same as during October 2009.
With 80,800 New Mexicans unemployed during October, the unemployment rate was 8.4%, up from 8.2% in September.
On a year-over-year basis, selected sector during October performance is below:
Construction: 44,400. -1,000.
Manufacturing: 30,400. +1,200. (A crucial, basic economy sector)
Trade, transportation and utilities: 129,000. -4,500.
Professional and business services: 98,500. -1,900.
Education and health services: 124,600. +5,300.
Leisure and hospitality: 86,300. +700. (The proxy for tourism)
Government: 203,100. +3,700. (Gasp! Incredible!)
Reality check: The overall job growth is great news. But, together, government and a semi-government sector, education and health services, added 9,000 jobs. That means the private sector, the real world wealth creating part of the economy, lost a net of another 2,700 jobs. And that means that while the New Mexico economy may be edging toward the door of the intensive care ward, we’re still in big trouble.

This coming Friday, November 26, won’t be a “black Friday” for all. That’s because the Bugg Lights display will start its third year at Menaul School. The lighting ceremony starts at 5 p.m. The lights will be on until 9 p.m. The lights will be on again at sundown the 27th, on Friday and Saturday the next two weekends and then every night from the 16th through the 24th.
There are about 200,000 of the lights, as I remember, in a variety of displays. The display was create by Norman and Joyce Bugg in their northeast Albuquerque front yard. After outgrowing the Bugg’s yard, the display migrated to the now-defunct outlet center between Albuquerque and Santa Fe and then to Menaul School.

For more information about the light display and the school, see www.menaulschool.com.
Menaul School is one of those Albuquerque institutions that is easy to overlook. Located at 301 Menaul Blvd NE since its founding in 1891, the school is small. The buildings are set back from the street, which was named after the school, and far from the flash and dash of the recycled UNM Pit Arena.
The Presbyterian Church ran Menaul until 1972. Now there is what school president Lindsey Gilbert calls “a covenant relationship” with the church. Not that Menaul shies from its origin. Indeed, Menaul embraces its faith base. “You should discuss issues of faith” in a non-dogmatic way. Gilbert was leading the campus tour after hosting a number of community members at the schools monthly outreach breakfast. There is daily chapel, but run by the students.
The faith-based mission is “vital to helping our kids have a sense of identity,” Gilbert says.
The student body is 75% non-Anglo with 60% receiving financial aid. Half the students are the first one in the family to attend college and 70% finish college.
All in all, worth a look.
(Bugg Light photo, courtesy Menaul School.)

Albuquerque Real Estate: Sales Down, Prices Steady, Nonsense Published

The DukeCityFix.com website this morning picked up an item from Memphis and blithely republished a claim that “September price reductions” showed Albuquerque with a 35% decrease.
While it’s unclear exactly the timeframe referenced by the Memphis folks (year-over-year?), the claim is nonsense. I have asked DukeCityFix to publish a correction. Here’s the truth. In September, average ($217,677) and median ($183,000) single family detached home prices were up a bit over September 2009.
Overall the metro price pattern appears to be stable-to-increasing. The median single family detached home price was $180,000 for October. This marked the third month out of the past four with an increase on a year-over-year basis. The average price of a metro home was $225,666, a 7% increase from October 2009 and the second highest average price since August 2008. The highest average price for 2010 was $230,213 in July.
The pending sale of 655 single family detached homes was recorded during October, almost the same as the 657 pending sales during September. During October the sale closed on 456 homes, a 4.8% drop from September.
My quick look at the realtors' website (www.gaar.com) indicated that metro single family home prices peaked in June 2007 with an average of about $262,000 and a median of $215,000. By July 2010, the price peak for 2010 to date, the average price was down 12% and the median down 13%.
I don’t know what the Memphis folks have put in their barbeque sauce, but DukeCityFix does harm if they don’t publish an attention getting correction.
On a year-over-year basis, closed sales continue well below 2009 when sales reflected the first-time buyer tax credit that ended in April. That pending sales during October were essentially the same as September suggests that perhaps November sales may be in the vicinity of the October figure of 456 closed sales. That’s because pending sales are a leading indicator for closed sales in the following month.
On the other hand, as economists like to say, it’s cold. In Albuquerque the winter months, January and February in particular, are the slowest for home sales. So we’ll see.

Wells Fargo Doubles Market Share Lead

Wells Fargo Bank almost doubled its New Mexico market share lead over Bank of America between June 20, 2009, and June 30, 2010, according to figures from the Federal Deposit Insurance Corporation.
Wells has 24.16% of New Mexico’s bank deposits as of mid-2010, a three-point, one-year share increase. Wells added nearly a billion dollars ($972.9 million) to its New Mexico deposits, a 19% increase that brought total New Mexico deposits to $6.2 billion on June 30, 2010. Wells Fargo had 98 New Mexico offices in mid-2010, down one from June 30, 2009.
By major contrast, Bank of America, Wells’ main New Mexico competitor, dropped $434.6 million from its June 20, 2009, deposit total of $4 billion, an 11% decline that took 1.9 points of its 2009 market share. BofA’s New Mexico market share was 14.16% on June 30, 2010.
While the Wells-BofA gap widened significantly during the 2009-2010 year, the gap hasn’t always existed. In 1991, before the mad shuffle of bank ownership in the state began, Sunwest Financial Services, the market leader, had assets of $3.4 billion, about double the assets of United New Mexico. Sunwest morphed into Bank of America while the morphing took United New Mexico into Wells Fargo.
New Mexico had five banks with deposits of more than $1 billion in mid-2010. Bank of the West followed at $952 million.
The top six had 56% of the deposits. So far as I know, only one of the top six, Los Alamos National Bank is truly locally owned.
The next 14 banks had deposits between $217 million and $674 million.
Deposits grew $946 million, or 3.8%, in New Mexico between 2009 and 2010. The deposit total was $25.8 billion on June 30, 2010.
Wells Fargo’s one-year deposit increase, $972.9 million, was more than the statewide increase, meaning that, on net, all the state’s other banks lost deposits during the 2009-2010 year.

Office and Industrial Real Estate: Little Happening

Jobs are needed to justify building office and industrial buildings. The jobs aren’t there in metro Albuquerque.
What with a three supply of industrial space and a five year supply of office, no reason exists for new, speculative space. This was the outlook presented today to NAIOP, the New Mexico chapter of the Commercial Real Estate Development Association. The occasion was the annual office and industrial real estate update.
Money is the main reason for the expected paucity of new buildings. Lenders want up to 35% equity, backed by pre-leasing.
The industrial vacancy rate was 10.4% in the metro, driven by the GE engine plant closing. The fall 2009 vacancy forecast was 9.5%. As of now, no new industrial projects are in the pipeline for 2011. The forecast hopes 50,000 square feet of new industrial space will materialize.
Office space was 18.1% vacant in the third quarter of 2010, just above the national vacancy rate of 17%. For 2011, one project for 98,000 square feet is known. The little activity that does exist come from government.
For the national economy, Bab Bach, chief economist for Grubb and Ellis, sees 2.2% GDP growth in 2011. New wage jobs will average 125,000 per month in 2011, barely enough to absorb the new entrants to the labor force.

Two Fun Rankings

Fourth is New Mexico’s rank among the states for percentage of forecast revenue promised for annual pension benefits starting five years after New Mexico’s pension assets run out in 2026, says the article in the October 16 issue of The Economist (economist.com/usstatepensons). At about 40% of revenues obligated, New Mexico is behind only Rhode Island, Colorado and Ohio.
The calculations assume 2008 revenue grows by three percent per year and use a “wildly optimistic” assumption of an eight percent annual return on assets reinvested in full.
Thirty-third is New Mexico’s rank for business tax climate for the just completed fiscal year, FY 11, that ended June 30. First is best, 50th is worst. The Tax Foundation (www.taxfoundation.org) produces the annual report.
A more relevant number here might be ten. That’s the number of places New Mexico dropped from FY 10 to FY 11.
Rankings for previous years were: FY 09, 26; FY 08, 29; FY 07, 25; FY 06, 23.
South Dakota, Alaska and Wyoming led the tax climate ranking for FY 11. The clear implication is that while tax climate matters for prosperity and business location, other factors come into play such as having people in the state and being close to major markets.

Election Observations: It Was All About Bill

Gov. Bill Richardson says the results of the governor’s race weren’t about him, that it was a national race. This self absolving comes the guy who lied about being drafted by a major league baseball and then, much more important, stuck with the lie for 35 years until Toby Smith of the Albuquerque Journal told the tale.
Two years ago I was saying that Lt. Gov. Diane Denish had two main problems in her race for governor—Hillary Clinton and Bill Richardson. Mrs. Clinton was proxy for the heir apparent situation, which Mrs. Clinton blew in her presidential candidacy and which I know affected Lt Gov Denish, though I don’t know how.
The Richardson problem was, basically, that every day Richardson remained governor was a good day for the Republicans and a bad day for Denish and the people of New Mexico.
A corollary problem was that Denish was not only the political heir apparent, she was the establishment heir apparent.
My argument and the argument of others was that Denish needed a complete break with Richardson via a news conference to denounce both his “style” (Denish’s word) and as many policy items as could be found. Instead Denish tried to finesse the relationship, saying that everyone knew her style was quite different from Richardson’s. The worker bees in state government weren’t happy.
Denish could not have anticipated that the Republicans would have a real, viable candidate, unlike in 2002 and 2006. Nor could Denish have anticipated that Susana Martinez would reverse the usual demographics—Hispanic woman from the south—that favored Democrats. This meant the general election was Martinez’ to lose in the sense that the person getting the most votes in not necessarily the “winner” of the election. Denish had to “win” the election.
My nomination for the most significant event in the entire campaign was the day that Martinez went to Roswell and got the money, around $250,000 as I remember, from the guys that disliked Allen Weh, former NM GOP chair and self-financed primary candidate for governor. That money made Martinez competitive. Weh proved a poor candidate, successfully overcoming his marketing budget, and the rest is history.

IdeasforNewMexico@swcp.com

I have set up this email address to gather ideas for the coming Martinez administration. The task is to reset New Mexico’s state government. But what to do?
Look around. Tune your observational antennae to the activities and requirements of government. You will see activities and/or rules that should be designed for more efficiency or simply eliminated.
Make notes and share your information. Send your observations to: IdeasforNewMexico@swcp.com. The ideas can be of grand scale or quite specific. The first contribution had to do with regulatory simplification.
I will use your ideas in columns during the rest of the year. (The column runs in ten newspapers around the state.) The best comments will be here.
It's our turn.

Filming Closes Intersection, No Compensation To Drivers

Every time my life is interrupted by filming, I want a place to send a bill for the distraction and time lost. This happen most recently on Sunday, October 31. A traffic safety commercial with a fake accident scene complete with volunteer state police officers was filmed at Girard and Indian School Road NE in Albuquerque, north of the University of New Mexico.
My problem with filming disruption comes from two places. First is the idea that the government grants a privilege, a monopoly, for the use of an area for a while and if I don’t like it, that’s tough. In economics this privilege comes under the idea of rent seeking. Second, I am already subsidizing the private enterprise doing the filming through the state’s 25% rebate. It’s double rent.
The rent idea and the duration of the disruption, hours or days, makes the filming situation different from, say, waiting five minutes for a truck to back into a warehouse dock along Broadway NE in Albuquerque.

In this case, I knew about the filming thanks to a heads-up email from an organization that had vehicle access affected by the filming. Early Sunday afternoon, as I walked from this organization, I saw the crew setting up, noted the situation and continued walking.
Hundreds of others, maybe a few thousand (I don’t have traffic counts), had to have been much less relaxed about the situation. They didn’t know about the filming, which went on into the evening. Driving by, they saw three or four vehicles with flashing red lights and a couple of smashed vehicles. “What the hell was that?” would be the normal reaction.
Also, the film company’s choice of location blocked the usual route of choice into and out of the neighborhood, thereby increasing stress and danger. The intersection is preferred because it has a light, allowing drivers to avoid playing dodge-car with speeders who hit up to 55 mph on Indian School Road.
Thanks to Mark Bralley for the photos and the insight that the offers were volunteers. Their service is appreciated.

NM Economy: Recession Continues, Says KC Fed

A dozen days ago Mark Snead came to Albuquerque with the traveling road show of the Federal Reserve Bank of Kansas City. Snead is branch executive and regional economist with the KC Fed’s Denver branch. Snead talked about the New Mexico economy.
New Mexico and Colorado are the poorest performers among the KC Fed’s seven states. Both lag the economic cycle, stuck in a last in/last out situation. All in all, though, New Mexico “is progressing through the cycle nicely,” Snead said.
New Mexico entered the recession late, had a sharp contraction and, as yet, shows no recovery. We’re in the first severe recession of the post World War II period with 51,000 jobs lost. Continuing unemployment claims are a complication for New Mexico. The claims continue to continue, meaning that folks aren’t going back to work.
The metro situation is “no bottom” in Albuquerque and Farmington, a possible bottom in Santa Fe with Las Cruces bouncing back and adding jobs.
New Mexico has seen a 20% employment drop in the good producing sectors. State and local government employment stood above the fray until around June and since then has fallen steeply. New Mexico has lost 7,100 jobs since December 2009 including 5,000 in state and local government.
Proprietor’s income is the technical name of what self-employed people earn. This fell off a cliff in 2009, especially in the construction and energy sectors. Earning and compensation also fell, but much less, and now show a slight increase. Proprietor’s income, though increasing again, remains well short of the peak.
Real estate and construction are “your Achilles heel,” Snead said. Construction employment, seasonally adjusted, picked up a little during the summer and is now headed back down.
Home prices here, down 8.5% since 2007, show the largest drop of the KC Fed states. Existing home sales dropped 60% from peak to trough, but have recovered a bit. Mortgage delinquencies may have peaked here and nationally.
Some evidence exists of stabilization in commercial construction employment.
One good note is that New Mexico is seeing a strong rebound in drilling.

Work Force Services Claims Recovery; Jobs Lost

The Department of Workforce Services claims, “We are now several months into a slow recovery.” Yet New Mexico lost jobs, 2,400 of them, in the year between September 2009 and September 2010. Yes, we did gain 13,400 jobs between August and September as noted last week from the presentation of Mark Snead of the Kansas City Federal Reserve. It’s the year over year performance that counts, but the monthly change counts too. How DWS can cite the year of year loss of 2,400 jobs as “recovery” is beyond me.
Still, four employment sectors gained jobs in September. They are:
o Educational & Health Services – 3,300 jobs.
o Leisure & Hospitality – 2,400 jobs.
o Manufacturing – 1,700 jobs.
o Mining – 800 jobs.
The further good news from this situation is that three of the sectors provide what economic developers call “basic jobs,” those jobs paid for by money from outside the state and which products outside the state or local market. These gains aren’t large, but they suggest future good news. The “basic job” sectors are leisure & hospitality, manufacturing and mining. These sectors, along with professional and business services, are central to any economic recovery.
The September job performance for the four metro areas is:
Albuquerque: Monthly +3,300. Year over year -4,800.
Farmington: Monthly +400. Year over year -1,300.
Las Cruces: Monthly +1,300. Year over year +1,700.
Santa Fe: Monthly -600. Year over year -300.
Las Cruces has added jobs for several months. Las Cruces is out of recession.
By another measure, we’re down to “only” four counties with more than 10% unemployment. The counties are Mora, Luna, Guadalupe and Grant. In September, all four showed a lower unemployment rate that the previous month.

NM Adds Jobs During September!

Nationally, the largest over-the-month percentage non-farm payroll employment increases during September were in the District of Columbia (+2.3 percent), New Mexico (+0.9 percent), and New Hampshire (+0.8 percent).

This means 7,100 job increase to 804,500 seasonally adjusted jobs in New Mexico.

This isn’t a year-over-year increase, which is what really counts, but then we shouldn’t quibble.
New Mexico’s unemployment rate was 8.2 percent during September, the same as August and down a tenth of a point from August.

Some Good News For the NM Economy. Really!

First to the headlines. The Albuquerque Journal reported this morning that the Chino (copper) Mine in the Silver City area will reopen. Eventually there will be 570 employees. It’s not exactly accurate to say “new jobs” because these jobs existing until the mine closed in early 2009.
The second story reported that hotel occupancy and revenue have been increasing, on a year over year basis, since March. This ratifies anecdotal evidence mentioned here since July.
The two stories reflect the main argument last night from Mark Snead, branch executive and economist with the Denver branch of the Federal Reserve Bank of Kansas City. Snead was the warmup for his boss, Tom Hoenig, at the KC Fed’s New Mexico Economic Forum in Albuquerque.
Overall, Snead said, New Mexico is “progressing through the cycle nicely.” New Mexico and Colorado got into the recession game late, were hit hard, and both are still in recession.
But there are a few glimmers with a number of sectors bouncing along the bottom and a couple of key sectors adding a handful of jobs. Las Cruces has added jobs for several months, as has been reported here.
Snead is sending his presentation. When it arrives I’ll do a more detailed report.

Bernalillo County Wage Drop Rate Doubles State Rate

Bernalillo County is New Mexico’s only member of the group of the nation’s 327 largest population counties.
We know the county is performing poorly economically. Not that we need any reminder, today the Bureau of Labor Statistics posted some numbers on the performance of those 327 largest counties. The numbers are for the first quarter of the year. Things are better now, as UNM’s Bureau of Business and Economic Research might put it. For those of us in the real world, BBER’s “better” means “less bad.”
In any case….
For the first quarter of 2010, Bernalillo County had 17,400 business establishments which employed a total of 309,500 people. Employment dropped 2.1% from the first quarter of 2009 to the first quarter of 2010. The employment performance ranked 161 among the 327, a little above the middle.
Those 309,500 people earned an average of $760 each week, a year over year decline of 1.3%. The wage performance ranked 237, toward the top of the lowest one-third of the counties.
As compared to the state, the recession has hit Bernalillo County harder. Employment dropped two percent, year over year. The average wage statewide, $716 in the first quarter of 2010, dropped 0.8% from the first quarter of 2009 to the first quarter of 2010, less than half the Bernalillo County rate of wage decline.
A business establishment is a place where business is done. A firm such as a fast food franchise or a bank can operate several establishments.

Albuquerque Home Prices Stable, Sort Of. That's the Only Good News.

For single family detached homes in metro Albuquerque, prices appear fairly stable, actually up a little. That’s the one nice thing to be said about the residential real estate market around here. And note that the price comment applies only to detached homes. For town houses and condominiums, prices are drifting down on a year over year basis.
Median condo prices peaked in June at $155,000 and were $142,00 in September.
During September, the average detached home sales price continued ahead of 2009 in metro Albuquerque. For the 479 single family detached homes with sales closed during September, the average price was $217,677. That was 3.7% above the average price during September 2009, though down from August and July 2010.
September was the third month in a row with the average price of a metro area home higher than the same month a year before. The median single family detached home price, $183,000 for September, increased from August and from September 2009.
Homes are selling faster in Albuquerque. The average detached home that sold during September was on the market for 74 days, two days less than September 2009. It took an average of 67 days for a townhouse or condominium to sell during September. That was a week less than a year earlier. During all nine months of 2010, single family detached homes have sold more quickly than during the same month of 2009.
There were 479 closed sales of single family detached homes during September. That was a 6.3% drop from August. Closed sales peaked in May at 731, the month after the first time homebuyer tax credit ended. Sales have declined every month since, evidence of the folly of such programs. Condo sales also peaked in May, at 103, and have dropped every month since. Closed condo sales were 47 in September.
Sales were pending for 657 homes during September, down 14% from August.
In addition to the end of the tax credit, factors in play for September include the number of foreclosed homes not yet on the market, the end of the summer “peak” selling seasons and Albuquerque’s poor economy that still is losing jobs.

Wall•E Look Alike At White Sands

Wall•E has returned to New Mexico. The amiable trash-compacting robot first appeared in the state in a movie trailer that debuted at The Walt Disney Company’s annual meeting held in Albuquerque in 2008.
More recently Wall•E has been roaming White Sands Missile Range. Actually, it’s not Disney’s computer animated Wall•E that is at White Sands, but perhaps a three-dimensional cousin with a remarkable physical resemblance.
The Army Evaluation Task Force, based at Fort Bliss, has been testing a variety of gear for battlefield reconnaissance to see if technical matters from tests during 2009 have been resolved. The equipment includes The Wall•E resembling Small Unmanned Ground Vehicle and a Class I Unmanned Aerial System, which looks a little like one of those barrels for cooking turkeys in oil and can fly up to eight kilometers from its operator.
The objective is to link these devices via roving digital command posts that will become a secure mobile network to provide soldiers a detailed, real time view of the battlefield.
This report appeared in the September 15 Wall Street Journal.

UNM vs. NMSU vs. UTEP: A Suggestion

Photo by Mark Bralley
We need to continue investing our tax dollars in the attempt to play big time football at the University of New Mexico and New Mexico State University. All this investment is absolutely required to provide sports journalists with the opportunity to create tacky headlines. Case in point: from the Albuquerque Journal, Saturday, October 9. “Battle of the Beatens Scheduled Tonight.” Nice.
At the end of the story, NMU coach DeWayne Walker posed the unthinkable. Stating the obvious, he said NMSU has never had a winning program, “and when you look at the resources we have compared to New Mexico, it’s not even close what they have to what we have.
“I just think everybody, from the administration to the community, at some point we’re going to have to make a decision on how bad we want a legitimate football program.”
Lack of resources and all, Walker’s Aggies beat UNM 16-14. Walker’s two-year record is now 4-14. With the loss, UNM’S Mike Locksley brought his record to 1-17.
A few weeks back, UNM’s football boosters made a market decision on Locksley. They decided to not come up with the big bucks needed to buy out Locksley’s contract. After all, there’s still a recession in Albuquerque.
Here’s a suggestion. Have the Lobos, the Aggies and the University of Texas at El Paso drop their respective conferences, which amount to little on the scale of things anyway. Recruit some other area schools such as Eastern New Mexico and Adams State and form a “Rio Grande Conference.” Follow the Ivy League example and emphasize the social aspects of football afternoons while keeping the game itself at a level where fans could enjoy the competition without embarrassment.
Besides, more locals would be able to play.
My friend Mark Bralley suggests adding more New Mexico schools to the proposed conference—St. John's in Santa Fe, New Mexico Tech, Central New Mexico (which is a community college so that probably wouldn't work). Such a group should include University of the Southwest in Hobbs which actually competes in intercollegiate athletics, though not football, in a conference, the Red River Athletic Conference. University of the Southwest is one of two non-Texas schools in the conference. The other is from Louisiana. The existing RRAM schools don't play football, but surely that detail could be solved along the lines suggested above.
St. John's only intercollegiate athletics competition that I know of is an annual croquet match in Annapolis with the Naval Academy. Tech's alphabetical topic list on the website lack an entry for athletics but Tech is offering a club-level, it appears from the website, women's rugby team named the Pygmy Queens. The notion of an athletic contest between Tech and St. John's offers all sorts of delightful notions, Socrates and Kant vs. string theory. Or something.
Mark's photograph is of UNM's Locksley speaking to the New Mexico State Senate early in 2009. That year Locksley coached in Senate basketball team which beat the House for the first time in nine years. Bralley wonders that if Locksley became the permanent Senate basketball coach, then maybe the government reorganization task force could find something to cut that would actually save money.

Uranium Reports: Balance, Sanity and Outrage

Three recent published reports dealing with uranium provide unexpected balance from a hugely unlikely source, an unexpected note of sanity from another surprising source and a new entrant in what I call the uranium-genocide genre.
The New Yorker magazine is the hugely unlikely source. In the September 13 issue it provides have a thorough and balanced consideration of having a uranium mill in the neighborhood around communities in western Montrose County, Colorado, near Utah. At eight pages, the article isn’t the issue’s longest, but it appears first, indicating the editors think it is important.
For one seeking balance, the title isn’t promising, “The Uranium Widows: Why would a community want to return to milling a radioactive element?” But Peter Hessler, the writer, starts with a resident of Paradox, Colorado, who has been around the local uranium all her life and is just fine with a proposed new mill. “For outsiders, this reaction is puzzling,” Hessler writes.
The area’s uranium history is nearly 100 years long. Through the 1950s, “there was essentially no regulation. Most mines lacked proper ventilation,” Hessler says. Then very high radon concentrations were discovered and Hessler makes a key point. “Miners liked their cigarettes underground, where radioactive particles attached to the smoke and were drawn deep into the lungs.”
Hessler mentions the late Stewart Udall, father of present New Mexico Senator Tom Udall. “Udall represented, among others, families of Navajo Indians who died after mining in terrible conditions in New Mexico; in Udall’s words, the government ‘has needlessly sacrificed the lives of (the Navajo miners) in the name of national security.’” The Udall statement begs to be taken apart because the victimization has become the received wisdom. Were the miners really “sacrificed?”
In Colorado, the widows don’t see the men as victims, rather that they chose a high risk, well paying occupation. And they smoked.
Hessler talked to environmentalists opposed to the mill proposed for Paradox. In the conversations, he says, “I noticed a vagueness with regard to scientific issues.”
Fascinating. Find an abstract at http://www.newyorker.com/reporting/2010/09/13/100913fa_fact_hessler. To get the full article online, you will have to subscribe.
Sanity came from The New Mexican in late August. The August 224 story began, “Nature, not Los Alamos National Laboratory, is currently the biggest source of uranium contamination in water around Española, Pojoaque, Nambé and Santa Fe.” The next day an editorial noted that uranium in the water was a known situation and said, “Nor is there any cause for alarm; caution, yes; panic no.” If a resident has a concern, get the water tested.
Panic or at least outrage over history is the contribution from a new book, “Yellow Dirt, An American Story of a Poisoned Land and a People Betrayed.” Judy Pasternak is a Los Angeles Times reporter who attended a 2003 meeting in Albuquerque of environmental agencies on the topic uranium related health and environmental issues. Pasternak was outraged at what she heard. A series of articles and the book resulted. The headline on the Albuquerque Journal’s September 26 book review said, “Deadly Earth. Book details uranium mining’s poisoning of the Navajos and their land.”
You get the idea of why I put this one in the uranium / genocide genre.

Susan La Tejana Ad, Parochialism Reigns Supreme

Mostly I stay out of the she said/she said back and forth of the race for governor. I’m more interested in the ideas, the serious talk about the future of New Mexico.
When sniping began (in the north, as I remember) about Susan Martinez’ birthplace, I felt the whole thing was silly, emblematic of a distasteful parochialism. The context, I remember, was some nonsense claim that Martinez might make pro-Texas water policy decisions as a result of her birthplace. It was enough to make one think that Val Kilmer meant exactly what he said when he made those tacky comments about his neighbors in San Miguel County.
Today things got a bit different. I saw a bumper sticker saying something to the effect of, “No to Susana La Tejana.” The parochialism has traveled south to Albuquerque, I thought. How annoying.
Then I happened to check http://roundhouseroundup.blogspot.com, the informative and often delightful blog from Steve Terrell, political writer at The New Mexican. He has posted two new Denish commercials, one featuring Brian Colón, Denish’s running mate. Colón says of Martinez, “We know Susana Martinez is from Texas. We know she’s bought and paid for by a Texas billionaire.”
I don’t know Martinez’ relationship with the rich Texas guy, other than she got boatloads of money. Had I been able to interview Martinez, I would have asked. But Martinez manager Ryan Cangiolosi said no interview, so that’s a problem for Cangiolosi and Martinez.
Comments:
1. This notion that birthplace matters is insulting to all New Mexicans. I choose to take the issue personally because, by chance, I was born in Oklahoma. Even though my parents had the good sense to get out of Oklahoma more than 50 years ago, the Colóns of the New Mexico world cast me as an inferior New Mexican.
2. Martinez invites the birthplace issue by finessing her birthplace. Her website says, “Susana was born and raised in the Rio Grande Valley.” We have learned that she was born in the El Paso portion of the Valley. Big deal. Why the paranoia, Ms. Martinez? See www.susanamartinez2010.com/about-susana.
3. Denish was born in Hobbs, all of five miles inside New Mexico from Texas. She understands that people born in other states just might have something to offer. In my August 26 interview with her, she said, “You know half of the people in this state are not people who grew up here. There’s lots and lots of valuable expertise available to us now….”
This comment is in the interview transcript that was posted September 21. The comment is toward the bottom of the transcript.
The Colón ad suggests desperation.
4. A small potential exists that Martinez' birthplace and, much more important, growing up in the three state, two nation La Frontera environment might lead to better public policy decisions. New Mexico politicos have a not-so-grand tradition of ignoring the south. The complex reality is that we have around 2.5 million people in the three state, two nation area. Adding to the complexity is the drug war in Juarez. Just by living her life, Martinez knows this complex reality.
We can’t continue to make “only New Mexico decisions.” Water is just one policy arena where regional decisions are necessary. Basins don’t pay attention to political borders. In this area, basins wander across all the political borders.

Cato Gives Richardson a B. Very Strange.

Today a definitely conservative outfit, the Cato Institute, issued a new report about state governors. The title is, “Fiscal Policy Report on America’s Governors: 2010.” See www.cato.org/pubs/pas/PA668.pdf. Bill Richardson gets a B, which has to seem very strange to those of us who have watched the state’s rolling revenue/spending saga and disaster since 2007.
One comment makes me wonder all the more. “The tax credit disease is best illustrated by the explosion in film production incentives.”
The report says it grades “success at restraining taxes and spending since 2008.” Therein lies the explanation. That was about when New Mexico’s fiscal situation hit the fan. Since then we have watched the heroic efforts of the Legislative Finance Committee and the continued evasions of the administration.
Maybe, also, Cato is bound by its methodology. New Mexico’s film subsidy isn’t a tax credit. It’s a direct cash rebate, so perhaps it doesn’t count for Cato. Still, the B is weird.
Richardson’s horse sanctuary is not even the latest example. My new champ in the “Doesn’t Get it” category is the entire administration.
The LFC’s September newsletter, distributed yesterday, says,
“State Agencies Seek 23 Percent Increase.
In budget requests submitted September 1, state agencies seek a 23 percent increase in appropriations from the general fund, a $493 million jump. The largest increases were in the budget requests for the Human Services and Health departments, mostly to replace the federal Medicaid dollars. The federal match had been increased for the last two years but the enhanced rate is scheduled to expire.”
Cato’s Richardson evaluation follows:
“Bill Richardson, Democrat
“Legislature: Democratic
“Grade: B
“Governor Richardson has carried through on phased-in income and capital gains tax cuts he put in place seven years ago. The top income tax rate fell from 8.2 percent in 2003 to 4.9 percent in 2008. Richardson has supported other modest tax cuts, but they have not been pro-growth reforms like his income tax cuts. In 2009, for example, he signed into law energy tax credits and one-time income tax rebates. The governor has supported some tax increases. In 2010, he signed into law an increase in the gross receipts tax rate, a broadening of income and sales tax bases, and a cigarette tax increase. On spending, Richardson allowed the budget to balloon during the middle of the decade, but he has cut back recently. Between FY03 and FY09, the general fund budget increased 49 percent. However, Richardson's proposed spending for FY11 is down 11 percent from the peak in FY09.”

Patricia Diaz Dennis: The Cowgirl (and Girl Scout) Way

Patricia Diaz Dennis: The Character of Our Community

She spoke today, September 28, 2010, to the annual Hispanic Heritage Luncheon of the Albuquerque Hispano Chamber of Commerce. The meeting was at the Albuquerque Hyatt.

Dennis chaired the Girl Scouts of USA from 2005 until 2008 and was a board member starting in 1999. As Girl Scout chair, she was responsible for a massive reorganization. The local result was folding the Santa Fe council into the Albuquerque council.

Professionally, she is an attorney who retired in 2008 as corporate counsel for AT&T in charge of a host of important matters including corporate litigation. Before joining AT&T Dennis, a Republican, was in government as a member of the National Labor Relations Board, the Federal Communications Commission and as an assistant secretary of state. Her government appointments were by Ronald Reagan and George H.W. Bush.

Dennis was born in Santa Rita, NM, and has family in southern New Mexico and in Rio Rancho. She lives in San Antonio (Texas).

Dennis gave what might be called her Girl Scout leadership speech. She could have talked about immigration, which she told me we just have to fix, or Mexico or telecommunications. In addition to her insights, she was funny and articulate. My transcribed notes follow. Her topic for the day was to “talk about what we need to do for our communities.”

“Girl Scouts has always been about creating leaders.”

“It has become very clear to me” that the values in the Girl Scout law serve our country better than anything else. “The most important life lessons” can be boiled down to essentials. Cowboys and cowgirls know that there are “lines between right and wrong.” Dennis has adapted Girl Scout law to five points she calls “The Cowgirl Way.”

“Lasting change has to come from inside us.” Thus,

(1) “Lead your life with intentionality and purpose,” making purposeful decisions.

“We’re each the product of all the choices we’ve made” throughout our lives.

“Leaders… take control.”

“Genuine leadership requires character.” All great leaders have in common a set of principles like those in the Girl Scout law.

(2) Blazing your own trail. “It takes a great deal of courage” to remain true to your values when there is no one like you. Dennis said Juliette Gordon Low, founder of the Girl Scouts, “is the ultimate trail blazer for me.” Dennis listed a number of characteristics including Low’s focus.

“The barriers still exist today” that Dennis faced, just in different forms and degrees. She told several stories starting with getting her first attorney position in the early 1970s after being interviewed by all 34 lawyers at the firm. The two men hired with her were only interviewed by the five-lawyer hiring committee.

Then there were all sorts of complications starting in the mid-1970s with working and executing her commitment to breast feed her children.

(3) “Some things are never for sale.”

Girls today have it much tougher than Dennis did in the 1960s. “We cannot surrender our girls” to the pressures pushing them to become sexual objects.

“Girls and boys need safe places,” away from these pressures.

Letting people such as bosses know that these family issues are important to you is very liberating to men and women.

(4) Be tough but fair.

(5) Pay it forward. Short on time, Dennis didn’t elaborate. But she said afterward that the idea comes from the 2000 novel by Catherine Ryan Hyde and the movie with Kevin Spacey and others.

There is even a Pay It Forward Foundation (www.payitforwardfoundation.org) with the mission “to educate and inspire students to realize that they can change the world, and provide them with opportunities to do so.”

One action within this sphere is to attack the fact that one in six Latina girls attempts suicide. Girl Scouts can help, Dennis said.

Something Else to Cut from State Government

Nanny-state stuff from the Public Regulation Commission. By “nanny state stuff” I mean the lectures on behavior from the PRC, the rest state government, or any government for that matter. A contender from the best ever advice award from government is this, “It is important to avoid parking in a Tow-Away Zone at all times.” The gem comes in a brochure from the PRC’s transportation division that was designed and printed by the PRC’s administrative services division.

Another value-laden item is a headline in the fall 2010 “Constituent Update” from Jason Marks, PRC commissioner. The headline, “Important Solar Project Dies a Lonely Death.” “A lonely death” for a project. Interesting concept. If Marks paid for this newsletter with his own money, I wouldn’t care.

But the PRC is supposed to regulate, not lecture.

Besides, PRC campaigns are paid for with public money, an approach that liberals say is to make PRC elections pure. I wonder what would be the reaction to a headline saying that the Public Service Company (or any utility) walked on water.

Eliminating such waste wouldn’t save much. But the state’s financial situation remains dire. Every little bit counts.

State Job Situation Better? Uhhh...

Once again the Department of Workforce Services injects optimism into their report of monthly job numbers. The new numbers, released yesterday, are for August. And once again, it’s difficult to take the optimism seriously. DWS economists please note that my problem is with the DWS communications staff and their bosses in the Governor’s office, not with you.

The DWS news release says, “There are signs of improvement from conditions earlier in the year.”

Well, sort of.

We do have job growth in three of the 13 job sectors. That’s up from two sectors with job growth, which has been the pattern for months and months. Some difference exists in the growing sectors. That’s the only good news I see.

Job gains appear in two basic industries, Leisure and Hospitality and Manufacturing. Education and Health Services once again added jobs.

Government lost 3,700 fewer jobs with state government down 4,300 and local government losing 1,400 over the August-to-August year. The feds added 2,000 over the year, which seems odd since the census jobs were supposed to start disappearing months ago.

Statewide, the total year-over-year job loss is 9,900, or 1.2%. Albuquerque, down 7,300 jobs, leads the pack. That’s 74% of the state total.

Las Cruces added 1,200 jobs over the year, a 1.8% increase. Seven of the 12 job groups increased employment during the year.

Santa Fe lost another 800, or 1.3%, of its wage jobs, year-over-year. Government broke even in Santa Fe for the year with the feds up 200 and state and local both down 100.

Wage employment in Farmington was down 1,300, or 2.7%, from August 2009 to August 2010.

Statewide, seven counties have more than ten percent unemployed. Mora and Luna lead, both with 14.8% unemployed. The other five are in the ten percent range.

4,400 NM Jobs Gone in August

During August, New Mexico was not among the nation’s leaders in job loss by number or percentage, either over the year or from July. I guess that’s good news.

Even so, New Mexico’s loss of 4,400 jobs from July to August was enough to hit the “statistically significant” designation from the Bureau of Labor Statistics, which released August state employment, labor force and unemployment figures today. Seasonally adjusted employment went from 802,600 in July to 798,200 in August.

New Mexico’s unemployment ticked up slightly and probably statistically insignificantly from 8.2% in June and July to 8.3% in August.

The state’s labor force about broken even over the year on a seasonally adjusted basis. The August 2010 labor force was 954, 700, down 400 over the year.

The number of unemployed people, officially unemployed, that is, was 78,300 in August 2010 and 72,700 in August 2009. The total number of unemployed, the 78,300 plus those who have just given up the whole employment scene is a larger number.

Diane Denish / Harold Morgan Interview, 8/26/10

Transcription of interview with Lt. Gov. Diane Denish and Harold Morgan, 7:00 AM, August 26, 2010. This conversation was summarized in Harold Morgan’s syndicated column that appears in ten newspapers around New Mexico.

The interview took place in Albuquerque at a coffee shop near Denish’s and Morgan’s home. (They are neighbors.) Gov. Bill Richardson was in Cuba the day of the interview on a “trade mission.”

Transcription done by Harold Morgan. The transcription leaves out a few verbal pauses (umm, er..) and summarizes two digressions. The photos of Lt. Gov. Denish are by Mark Bralley.

* * *

Denish enters and gives Morgan a file.

Harold Morgan: I brought a file, too. I brought a file, too.

Diane Denish: You did! Well I just brought my proposals in case you needed one.

HM: I brought a few with me. With questions, even.

Oren Shur (Denish campaign manager): Diane, Harold and I are both going to record this.

DD: OK.

HM: That way if mine doesn’t work… It didn’t work yesterday in Las Vegas at Estella’s. We have backup.

HM: Well, good morning. Thank you.

DD: Good morning. How are you?

HM: Less awake than you are. Lots of ground. Limited time. So I’m going to jump in if I may. Be focused and all that.

HM: Topic one is something I’ve wondered about since 1994. That’s when you first ran for Lt. Gov.

DD: um hm.

HM: And that’s when Patsy Madrid declared for Lt. Gov. After Casey (Luna) pulled out. And beat you. You don’t have to answer this. But I’ve always wondered (about) the tone of the language in the Denish living room after that happened. I assume the language was a little blue.

DD: You know, actually we were just surprised. Because she had signed my petition. She didn’t call and tell me. But a lot of water under the bridge since then. She’s working hard for me this year.

HM: Well, business is business and that stuff.

DD: It was a good first race for me. She and I got 76% of the vote. And there were two men in the race. I was proud of my race that year.

HM: Well, first time out and all that.

DD Yeah, exactly. And she’s been around the block a few times.

HM You’ve stuck with it then. It dawned on me that you have been on the ballot every four years since then. In 1994, were you thinking about running for governor eventually?

DD: No. I was thinking that if I won, I’d see if I liked being elected. Because everything else I’d ever done had been pretty non-profit, business oriented. Everything had been. New Mexico First. Board of regents. All those things.

I knew I could make something of the job. The one thing I knew because (unintelligible) It was seemed like it was always (unintelligible) but never very meaningful or very purposeful. The one thing I knew about the job was that I thought it could be used in a better way.

HM: But then you ran and you got beat. You ran again. Why did you run again? And again?

DD: I had really not planned to run the third time. The second time I thought it was worth a run. I think that if you don’t run again after the first time, you saying you’re out of the game. I looked at other options

I was encouraged to run against Schiff in 1996 for Congress. Chose not to do that.

Ran in ’98. Got to run through a general election. That was interesting, to be on the ticket with somebody. Then I was a party chair. Really hadn’t planned to run. I thought I would hang in there and be the party chair and help the ticket.

I got a lot of encouragement for outside people who said this is the time to run.

(I) thought about it.

I knew I was going to change my business, one way or the other. I was going to do what we did, which was to (unintelligible) my clients off in order to reinvest.

Maybe change the focus a little bit in terms of technology. It seemed like a good transitional period. If I hadn’t won, then I could go do something with my business.

Or seek a new business, actually. That’s what I was going to do.

HM: You have talked about your business over the years. It has been a key of what they call these days, your narrative, the jargon. I’ve never known what your business was. I even went so far as to check the PRC and the corporations listing and I didn’t see anything that looked like your business.

DD: I was a sole proprietor. And I started out doing, well, the reason I started the business, Harold, is because I did a voter contact program for Bruce King in 1990 and ran a project. I thought the coming thing was voter contact. We didn’t do in 19990 what we do today. We didn’t have robocalls. So it was person to person.

So I started the business.

Then I got contacted by lots of other people who do lots of other things. Research. Small donor base building.

So I had non-profit clients, corporate clients. Mostly part time employees.

Once I got through the first two years. At the end I had three full time. At my highest time I had 26 part time employees. Every two weeks. People that needed extra work. Most of them were either moms that went to work after school, in the night, people that were trying to just get extra hours of work.

You’d be surprised how many people I run into today that say I used to work for you at the Target Group while I went to school.

HM: It’s called the Target Group.

DD: A lot of my clients are still in business. The non-profits. The for-profits.

HM: One of the things that you have gotten flack about is your relationship with the Governor and the broader administration. Well, first of all, to interject, I’m operating on the premise that the state is a mess, both economically and within the administration. It is that a fair premise?

DD: Well, I think that we’re in a global economic downturn. So financially, we’re very, very challenged. Comparatively to the rest of the country, we’re actually better off than many other(s). I don’t know what our ranking is.

I know Texas has a $1.3 billion deficit. Colorado has a $1.4 billion deficit. Arizona has a four point something billion dollar deficit.

I think that in terms of fiscally we’re not weathering the storm, but we

have to deal with a $150 million deficit.

HM: That’s the current number? The $150 (million)?

DD: The $150. Right. And we expected that to be this year. My current information is this year and next year, that we’ll have the budget year 2011 and 2012. We don’t know about 2013.

The other thing is, we’re in a transitional period. When the governor’s leaving, people start leaving.

I would tell you there are a lot of people in state government who are working their butts off to do their jobs. Social workers, correctional facility people, tax and revenue people. There are a lot of people working their tails off.

A lot of the things the Governor has been criticized for, the State Investment Council, almost all of things have been corrected in the last session. The criticisms of the third party administrators and all that. Those rules have been changed, either administratively or by legislation the governor signed. Those are going to be the rules for the next governor.

HM: In thinking about this it dawned on me…

DD: There are only three states in the country that are not in budget deficit situations. You know that I assume.

HM: That are not in budget deficit.

DD: There are only three of 50 states. Illinois is cratering. California is cratering. Arizona sold their public buildings and are leasing them back.

HM: They of course may get in big trouble on that 20 years down the road.

In thinking about this, though, it occurred to me that there are really two pieces of what might be called “the issue with the administration.” One is the policy part of it. Then one is what you might call the culture.

It dawned on me that they are really quite separate. On the policy side, do you have any real significant or even middle range significant issues with what the administration has done the last eight years?

DD: On the policy side… That’s a pretty broad question.

HM: Well, yeah. That’s why I asked “significant.”

DD: I think it’s more on how I would operate with the legislature. I would operate differently with the legislature a little bit. Be a little more collaborative with the Senate and the House. The House seems to be fine. The Senate needed a lot of work in terms of relationship building.

I’m trying to think if there’s something… In the short term right now, I’ve been pushing for the administrative practices act. The things that will make from a business standpoint, predictability, processes available to business.

The Governor, that wasn’t one of his priorities at all. I would have operated differently from that standpoint. I think business, whether you’re regulated strictly, or not regulated at all or just considering that business deserves predictability, timelines, a predictable process. We’ve been working for two years and a half, almost three years on that administrative practices act. Now it’s finally getting a solid hearing.

Those are things I would have done differently.

(Digression to consider schedule)

DD: I have a totally different style than the Governor. The other thing I just have to say is, I believe that governing, if you do a good job being a governor, your legacy follows you. You don’t have to follow it out in any one area.

As Lt. Gov., I have some key areas and I’ve had success. I couldn’t be prouder of anything than that microlending program. I travel around the state. I meet hundreds of people who would have never had access to a $500 or a $1,000 loan if it hadn’t been for ACCION, WESST (Corp.) the loan development fund, the microlender who benefited from that one little tweak in the law.

Don Kidd was the crafter of the SBIC. At first he didn’t want to do it. Now he’s the biggest user and the biggest proponent. I asked him if he’d give me a statement about it. He said, yes, I’d tell them you were a lot smart than I was.

There’s the policy side. Then there’s the stylistic side. I’m just different than the Governor. Everyone will tell you that.

HM: I know that quite well. I‘m partly kidding here, but I’m just idly curious about a specific item. Within your thinking about economic development, do you have any trips to Cuba on the agenda?

DD: Not in the first four years. I don’t smoke cigars.

HM: I forgot by the way, I should have said, “Good morning, Governor.”

DD: Yes, exactly. You saw my security guard Herb Denish out there with me. He gets a dollar a year, or two dollars.

HM: Yes, I did. Coming to this, the differences. Coming back at it in another way. You of course are very much an establishment person in New Mexico. Second generation establishment person By becoming governor, you would inherit the mantle of leading the establishment. Some would argue that the establishment got us in the mess.

We might disagree about degree of mess. We could spend a lot of time on other states and their money. We’re not going to do that.

But how would you respond to that notion? The sort of contra notion is, “Throw the establishment out.” How do you respond to that notion?

DD: I think people who want someone who will talk straight to them. You made an important point here. I’m a second generation New Mexican. And I have a stake in the game here. Very different from my opponent and from the governor. And I have a third generation of New Mexicans and a fourth generation of New Mexicans following behind me that live in our neighborhood.

I think what people want is, they want somebody who is thoughtful about our future, who is thinking about beyond their own legacy about what’s good for New Mexico, who they believe is on their side because they also know it’s important to us, it’s

important to you, it’s important to me.

And it’s not for personal gain. I think those are the things that people are looking for. They have to believe, they want to know that I understand what its like to own a business and make a payroll, what it was like to be a single mom, what it was like to raise three children.

What it was like to put my dad in a full care living facility when he had Alzheimer’s.

People want to know you have lived their lives in a way. And that you care about where they live. They don’t want somebody that’s off to do their own thing.

People ask me if I’m going to sell our house in our neighborhood. I say absolutely not. Being governor is a temporary job. I’m going to go back to my neighborhood.

And I haven’t been on the government payroll all my professional life like my opponent has. Every single day of her professional life, CYFD for a short time and the DA’s office for twenty… whatever.

HM: And (the Governor) has been on the public payroll almost all of his adult life.

DD: Isn’t that a funny similarity between the two of them.

HM: And that’s interesting, and that gets to cultural things. More culture. New Mexico, as is often said, is a small population state. Lots of folks know one another. Key folks in New Mexico grew up Hobbs and went to high school together and have ended up running, chairing significant pieces of state government. Names aren’t germane here. That’s not the point.

DD: Right.

HM: I would argue that the specific (department) I’m thinking of is in a huge mess. How would go to someone who has been an acquaintance if not maybe quite a friend for forty years plus and say you’re not going to be part of my administration because there was a problem. How do you do that?

DD: You know what, I don’t think you separate anybody out, even your friends. I think you say, I’m the new Governor. What I expect is people to respectfully give me their resignations. Tell me if they’d like to serve or not. And then make my choices about what I think needs to be done.

All of that will be done in the context of smart reorganization. Looking at our proposal for efficiency and jobs.

Making sure we’re designing a cabinet that works in the time that we’re in.

All my friends know that. People that I know in government that are new friends, old friends, long-time friends.

You know half of the people in this state are not people who grew up here. There’s lots and lots of valuable expertise available to us now, especially in this climate, where people are maybe even job hunting. They have lots of valuable educational, as well as worldly expertise. I think new governors have the opportunity to gather that around and make new recommendations.

I would submit to you that people that are on all these boards and commissions that have worked very, very hard, eight years is a long time for them. That may be their level of service. Long time friendships will endure if they’re friendships, whether you put them on a board or commission or not.

That’s what I know about New Mexico.

People I know that are my fifty-year friends are not going to not be my friends because I don’t name them to a board or commission. They’re also not going to be my enemy. They’re going to want to continue to be my friend. Because at the end of the day after you’re governor, that’s what endures.

(Discussion of follow-up interview)

DD: Let me just say about… I have a rooted upbringing in New Mexico and in Hobbs. My longest time friends are from various communities, from the university, all around. I’m not going to throw them under the bus. They’re not going to throw me under the bus. At the end of the day, we’re still going to be friends. Do we argue? Yep. Do we disagree? Yep.

HM: Yep.

DD: I’m not trading them in for any Governor’s license plate. They’re not going to trade me in for any board or commission appointment.

HM: Thank you.

Denish Not New Mexico First "Founder"

The Albuquerque Journal’s profile this morning of Lt. Gov. Diane Denish listed her as “founder” of New Mexico First, the public policy group. This is an error. At best Denish was co-founder of the group with William G. “Bing” Grady, then president of Sunwest Bank of Albuquerque, formerly Albuquerque National Bank. (Photo of William G. Grady by Mark Bralley.)

Even “co-founder” credit may be an overstatement. Grady and Denish led a task force that put together New Mexico First. To give Grady and Denish “founder” credit leaves out the task force, several of whom played huge roles in formulating what became New Mexico First. My role, stemming from being the communications person at Sunwest Bank, was to provide staff support for Grady.

As I remember, the task force grew from a 1986 meeting in Las Cruces at the old Holiday Inn between Senators Pete Domenici and Jeff Bingaman, inn-owner Buddy Ritter and maybe one of two others. On the task force,Grady represented Domenici and Denish represented Bingaman. They were charged with doing something to create a broad public forum in New Mexico.

For what it’s worth, New Mexico First (www.nmfirst.org) says Domenici and Bingaman were the co-founders.

A number of groups had been exploring the idea for broad thinking about the future of the state. The task force pulled the groups together. Some felt usurped by the senators. That was too bad.