Monday, January 31, 2011

Movie Subsidy Story Attacks NMSU Study, No Basis Offered.

The Albuquerque Journal did a movie subsidy story yesterday.
In the story, there is this statement, "Arrowhead Center (at New Mexico State University) was directed to look only at pieces of the incentive program and almost certainly underestimated the value of film incentives."
The assertion appears halfway down column one on page A6, which is the jump.
No basis, no context and no attribution are provided. This is the most blatant kind of editorializing.
Arrowhead Center’s study is dated August 26, 2008. It was done for Legislative Finance Committee.
The study is straightforward. It used an input-output model and dealt only with the 25% rebate.
The Journal’s story also neglects to note that the other movie study, by the Ernst & Young accounting and consulting firm, was done for the state film office and the State Investment Council. The E&Y study liked the movie incentive. No surprise there.
The story did note criticism of E&Y by institutions including the Federal Reserve Bank of Boston.

Friday, January 28, 2011

NM Ties Michigan for 2010 Job Performance

New Mexico and Michigan tied for 46th nationally in job performance in the year from December 2009 to December 2010. The state lost another 2,500 wage jobs from November 2010 to December 2010.
Neither item made yesterday’s release from the Department of Workforce Services, the first job report from the Martinez administration and Celina Bussey, DWS secretary designate. The release did acknowledge that New Mexico dropped 3,400 wage jobs over the December-to-December year.
All of that said, by the seasonally adjusted “employment / unemployment” measure, which is different from wage jobs, nothing happened between November and December. “Nothing” means that employment dropped 343 and unemployment increased 209. With employment around 875,000, statistically the change is zero.
The release, appropriately, qualified the statistical situation. Basically, when one uses sampling to produce estimates, the further one gets from the starting point, the less confidence (in a statistical sense) there is in a given number, especially when the number, 343, for example, is quite small. DWS said that the price of producing “timely estimates is that sampling and other errors need to eventually be corrected. That is why we, along with all other states, benchmark the employment estimates to the complete count of employment available principally through administrative records from the unemployment insurance program.”
For the year, then, Albuquerque, down 5,300 jobs, remained the drag on the state’s wage job performance. That means the rest of the state gained 1,900 jobs (5,300 – 3,400 = 1,900). Las Cruces gained 1,900 wage jobs, year-over-year, so outside of Albuquerque and Las Cruces, the rest broke even for the year, not bad considering.
For the year, professional and business services was the loser sector, down 8,300 wage jobs or 8.3%.
For the month from November to December, the rural areas took the hit, down 2,100 jobs. That arithmetic comes from the 400 jobs lost among the four metro areas for the month. (Albuquerque, -100; Las Cruces, -200; Farmington, -100, Santa Fe, no change).
New Mexico ended 2010 with five counties boasting more than 10% unemployment. Luna County continued to lead with 19.4% unemployment.
All will change March 10 with release of the new benchmark numbers. Hold on to your statistical hats.

Wednesday, January 26, 2011

New National Education Scores Released. NM Beats Mississippi.

Results for the 2009 National Assessment of Educational Progress test were released yesterday. See for New Mexico’s results, poor as they are. In general, almost all states showed higher scores. A few, typically Mississippi and one or two others fared worse.
Reading: In 2007, the average scale score for fourth-grade students in New Mexico was 212. This was higher than their average score in 2005 (207) and was not significantly different from their average score in 1992 (211).

Math: For fourth graders, the NM average was 230. The national average was 239.
At or above basic: 72%.
At or above proficient: 26%.
At advanced 3%.
For eighth graders, the NM average was 270. The national average was 282.
At or above basic: 59%.
At or above proficient: 20%.
At advanced 3%.

Reading: For fourth graders, the NM average was 208. The national average was 220.
At or above basic: 52%.
At or above proficient: 20%.
At advanced 4%.
For eighth graders, the NM average was 254. The national average was 262.
At or above basic: 66%.
At or above proficient: 22%.
At advanced 1%.

Science: For fourth graders, the NM average was 142. The national average was 149.
At or above basic: 63%.
At or above proficient: 24%.
At advanced, the score rounds to zero, an extraordinary achievement.
For eighth graders, the NM average was 143. The national average was 149. Mississippi, Alabama and California have lower scores than New Mexico.
At or above basic: 55%.
At or above proficient: 21%.
At advanced 1%.

Tuesday, January 25, 2011

Job Situation Turns Statistical Corner

New Mexico’s employment situation, according to numbers released this morning, did not improve in December, at least not by the conventional measure of adding jobs. However, by the measure of statistically significant change, things are better. The point here is that the 2,100 wage jobs lost (seasonally adjusted) from November to December are not significant in the statistical sense. Only we numbers geeks may care, but for several months last year, New Mexico was first or second nationally in the statistical significant changes.
With the change, it may be accurate to say the New Mexico is now bumping along the bottom of its recession. But without net new jobs, it is not correct to say, things are better.
Here are some of the numbers, all seasonally adjusted. The full report is at
The December 2010 unemployment rate was 8.5%, the same as November and up from 8.2% in December 2009.
The labor force, 957,600 in December, dropped 1,900 over the year.
The number of unemployed, 81,600 in December, was up 200 from November and up 2,600 from December 2009.
Employment, computed by subtracting the number of unemployed for the labor force figure, was 876,000 in December, down 4,500 for the year.
The number of wage jobs, 801,700 in December was down 2,100 from November and down 3,600 year-over-year.
My policy question is what the new administration does rhetorically with the numbers. The Richardson used a kind of doublespeak to claim that things were better because, even though we were still losing jobs, the rate of decline had declined. With the number of jobs still declining, the appropriate description is to say that things are bad, but less bad.

Friday, January 21, 2011

Martinez Does Something Bold

Governor Susana Martinez has finally done something bold. There is no money in the executive budget for the Commission on the Status of Women. No male could consider such an idea, given the sacrosanctity of gender politics.
According to a story in the current issue of The Alibi ( in Albuquerque, the Commission has been around for 37 years, since the glory days of feminism, and spends $600,000 annually. That’s 40 cents per taxpayer, the story says.
In her state of the state speech on Tuesday, Martinez fulfilled a campaign promise and called for bringing the death penalty to New Mexico. The next day, Archbishop Michael Sheehan got media coverage for his opposition to the death penalty.
One has to respect Martinez for keeping the campaign promise. I continue to believe it is a fight not needed by the Martinez administration, the legislature and the people of New Mexico.

Monday, January 17, 2011

Homes Sales Increase During December, Defy Seasonal Pattern

Sales during December of single family detached homes around metro Albuquerque increased from November. Sales also increased during November from October. This basically doesn’t happen.
Typically during the winter months, the number of closed sales decline on a month-to-month basis. During 2009, sales declined from October to November and from November to December. Almost the sale pattern appeared in 2008, except that December sales were one unit above November.
My speculation is that maybe warm weather during November got more people out looking at homes which led to more closed sales during December. Also, interest rates are really, really low.
The negative momentum of the late fall 2009 continued into 2010 with a 36% drop from December to January 2010 (with 349 closed sales) and then a nine percent increase for February. In March, buyer began to respond to the first time home buyer tax credit, which artificially inflated sales through June.
The December 2010 result of 505 closed sales was an 8%, or 36-unit, increase over November. December sales were down 7% from December 2009.
There were 540 sales pending of single family detached homes during December. That was an 8% drop from November, but a 13% increase from December 2009. Pending sales during one month indicate the number of sales closed for the following month. The suggestion, therefore, is that the number of closed sales will drop in January.
Median and average sales prices for single family detached homes continued year-over-year increases from 2009. The December median price, $178,433, was up 1.4% from December 2009. There was a slight 0.34% increase for the average price, $217,416 during December, over December 2009.
The average price has increased six consecutive months from the same month of 2009, with the median price up for four months.
Homeowners listed 904 single family detached homes for sale during December. There were 4,794 homes listed for sale during the month.
The numbers are from the Greater Albuquerque Association of Realtors. The GAAR report covers sales from Rio Rancho to Belen and east to Moriarty.

Tuesday, January 11, 2011

Movie Folks Are Organized

A meeting started at 4 p.m. this afternoon to discuss the movie kickback, the subsidy that rebates spending on movie production to the people making the movie. The meeting was at the theater in the National Hispanic Cultural Center in Albuquerque's South Valley.
I got there about 3:40 and breezed in. The theater was about two-thirds full. Someone was telling the audience to get into their seats because no standees were going to be allowed. I chatted with a few of the good guys on the issue—Rep. Dennis Kintigh and Rep. Janice Arnold-Jones—and left. By that time the line in front the registration desk, the desk I had ignored, was to the end of the hall and wrapped halfway back down the hall to the entry door.
My guess is that nearly all were pro-kickback. But then if your job depended on the government and if the political balance of power had shifted away from you (with the election of Susana Martinez as governor), you too would be out in force. I'm on one pro-kickback list serve. The anguish in the emails at the slightest threat is something to behold. These messages fortunately go into a spam file, but I look at them occasionally anyway. That's entertainment.

Independent Science Programs Expand

Around 350 New Mexico kids will invade the Albuquerque convention center this weekend to build robots from Lego bricks. Here’s what happening, courtesy of the First Lego League website (
Children ages 6 to 9 get to:
• Design and build a challenge-related model using Lego components.
• Create a Show-Me poster and practice presentation skills.
• Explore challenges facing today’s scientists.
• Discover real-world math and science.
Children ages 9 to 14 get to:
• Strategize, design, build, program, and test a robot using Lego Mindstorms technology Create innovative solutions for challenges facing today’s scientists as part of their research project.
• Apply real-world math and science concepts.
• Develop employment and life skills including critical thinking, time management, collaboration, and communication while becoming more self confident.
The activity is built around what First Lego jargon calls “a challenge.” The “missions” include “bone repair, rapid blood screening, bionic eyes, nerve mapping, object control through thought, teams will have to program their Lego Mindstorms robots to explore the growing questions around how to repair injuries, overcome genetic predispositions, and maximize the body’s potential.”
The kids’ activity also is supposed to result in a bunch of touchy-feely stuff I won’t bore you with. But the point is we have New Mexico children doing real science, activity critical to the future of the state and the nation.
Another expanding science program—now up to 30 schools—is the Santa Fe Institute’s Project GUTS: Growing Up Thinking Scientifically. See the 2009 SFI Bulletin (
The GEAR-Tech-21 (Geospatial and Robotics Technologies for the 21st century) (http:/ program from the University of Nebraska extension service in Lincoln appeared in New Mexico last year. GEAR-Tech is linked to the First Lego League.

Saturday, January 8, 2011

LFC Releases Budget Recommendation

This is yesterday's news release from the Legislative Finance Committee about the LFC's budget recommendation for the 2012 budget year that begins July 1.

Editors: The LFC budget recommendation will be posted on the committee’s website,, next week.

The Legislative Finance Committee today released a budget recommendation for the 2011-2012 fiscal year that calls for spending $5.39 billion from the state’s general fund, a $187 million increase from the FY11 adjusted spending levels.
While almost every area of state government would be cut, those cuts are offset by increases of hundreds of millions of dollars for Medicaid and tens of millions for public school support, for an overall increase of 3.6 percent increase.
Those two areas of the budget – which make up the bulk of state spending -- have been substantially protected from cuts during the last two years of fiscal crisis through an influx of temporary federal stimulus funds. Those funds are not expected in FY12.
To cut spending throughout state government, the committee’s recommendation assumes lower rates for computer and other services provided by the General Services Department, reduced spending on building space because of the shrinking workforce, and an extension of the temporary shift of retirement contributions from employer to employee.
The committee’s recommendation continues to emphasize public education and access to health care and, with the continuing economic crisis, focuses on programs that demonstrate efficiency and effectiveness. To preserve critical services while cutting spending, the committee recommendation targets savings in contracts and personnel, including eliminating positions vacant for long periods of time and nonessential public information officers, deputy directors, and other managers.
“The committee faced the challenge of building a budget that would address needs far in excess of revenue growth,” LFC Chairman Luciano “Lucky” Varela, D-Santa Fe, said. “State spending on public schools and Medicaid had to take a big jump up to cover the loss of federal funds.”
Projected general fund revenue for FY12 is $186 million more than FY11 appropriations adjusted for cuts made through executive order. With the LFC spending plan, the general fund reserve would be 5 percent, a level considered less than minimally acceptable.
The committee’s general fund recommendation of $3.1 billion for education is an increase of less than a half percent from the FY11 adjusted budget, reflecting an overall increase of $37 million for public schools and an overall decrease of about $29 million for the state’s colleges.
The public schools recommendation includes more than $88 million to replace the disappearing federal funds and assumes program cost reductions of $38.6 million by eliminating funding for one non-instructional professional development day, shifting the employee’s portion of the Education Retirement Board contribution for return-to-work employees from the employer to the employee, and formula adjustments, such as tightening eligibility for small school and small district funding units.
Similar to the recommendation for public schools, the recommendation for the Human Services Department includes an increase in general fund spending mostly to cover the loss in federal stimulus funds. The recommendation places a priority on maintaining the department’s essential services and anticipates the department will find administrative and nonessential program savings in FY12 to continue the most critical functions – Medicaid healthcare coverage, cash assistance and support services for poor families, and substance abuse and mental health services.
The combined recommendation from the general fund for Medicaid is $854.5 million, a $253 million increase from FY11, or 42.2 percent. In addition to replacing federal funds, the recommendation supports enrollment that is at its highest point in state history. However, it also assumes the department will pursue additional cost containment, from provider rate decreases to a redesign of the long-term services waivers.
The legislative session starts Jan. 18.

Wednesday, January 5, 2011

The Price of Big Time Football

Michigan fired football coach Rich Rodriguez today. Rodriguez' price is the relevant element to the University of New Mexico's football "program" and coach MIke Locksley.
Michigan paid West Virginia $2.5 million when they stole Rodriguez. According to the Associated Press and, it looks like it will cost Michigan another $2.5 million to fire him.
When UNM considered dumping Locksley, the buyout was $1.5 million. The locals—the boosters, that is—didn't have the money. Nor, for sure, did the university.
UNM isn't in the game.

Tuesday, January 4, 2011

Boomers Turn 65 This Year

AARP New Mexico, using data from the Census Bureau, says the number of people 65 and older in New Mexico is expected to jump from 279,000 in 2010 to 419,000 by the year 2020.

Monday, January 3, 2011

Heather Wilson On Ideas, Entrepreneurs, Educational Excellence and Research

Innovation is a magazine published bimonthly by Technology Ventures Corporation of Albuquerque. The October-November 2010 issue offered an edited version of a speech given by former U.S. Rep. Heather Wilson at Los Alamos National Laboratory. The magazine didn’t say when Wilson spoke at LANL. I have plucked a few bits from the Innovation version. For the whole thing, see
Wilson recently chaired the transition for Gov. Susana Martinez.
“…there are things America has that other countries continue to seek to emulate. We should protect these things and recognize how central they are to continued prosperity.
“1. America values open markets, the free flow of ideas and collaboration. There are some elements in American society who still believe that we can cut ourselves off from the world and prosper.
“2. We must sustain an environment that rewards and values entrepreneurs who bring the best products and the best services to the market in ways that customers value. That means predictable and low taxes compared to other countries and fair regulations. Government cannot create wealth, but it can create the conditions for businesses and entrepreneurs to invest and create jobs.
“3. America must continue the commitment to educational excellence. American universities continue to attract the best talent in the world and we need to make it easier for the best and brightest who want to stay in America to stay here. That will require a change to our immigration and visa laws…
“4. The American government must continue to invest in basic research. That would be the kind of long-term research that is unlikely to yield developable products in the near term, but will be the basis of innovations that change lives in the long term.
“Let me be clear about what I don't mean. I'm not talking about development of products and government investments and takeovers of corporations—the kind of industrial policy that makes decisions about the allocation of money and talent for applied research outside of areas like national security that is a government responsibility based not on a marketplace assessment of risk and reward. Those kinds of policies will likely misallocate resources…”

Sunday, January 2, 2011

Our Science / Government Past Is Prologue

At least since World War II, much of New Mexico’s economy has had to do with the federal government. That will continue. The federal government does national defense and what might be called “big science.” They do a lot of this in New Mexico. That’s why whining that “the state is too reliant on federal, state and local government” gets annoying. Besides, the assertion begs the question of just how reliant should we be.
Two items from The Economist Technology Quarterly convey our past and future in science with the feds. See You will have to register.
Some of us have heard of Hyperion Power Generation, which came out of Los Alamos National Laboratory. The Economist says, “Hyperion Power Generation, a firm based in Santa Fe, New Mexico, is building components for what it calls a “nuclear battery”. The refrigerator-sized Hyperion Power Module (HPM) (small nuclear) reactor will shift much of the building from field to factory, where a controlled environment reduces costs. HPMs would be delivered by truck with enough uranium to run for about ten years. They would be constructed in batches with interchangeable parts and cost about $100m each. And they need little human oversight to operate. Five companies, located in America, Britain, Canada, China and India, have put down deposits for an HPM.”
For 80 years, space and New Mexico have been intertwined. Remember Robert Goddard? Here’s a recent development that not only is the government, it’s the military. The problem is that today’s satellites are large, expensive and slow to put together.
“In 2007 America’s Congress ordered the Department of Defense to establish a body to lead the shift toward quick-build, quick-launch replacements. Later that year the Operationally Responsive Space Office (ORSO) opened at Kirtland Air Force Base in New Mexico, staffed with experts from America’s air force, army, marines and navy, a handful of intelligence agencies, and NASA, the space agency. The result, says the office’s director, Peter Wegner, has been an ‘explosion in innovation.’”
Ah, innovation. Right here on the Rio. Done by the government.
Of course, our economic development efforts should focus on the private sector. Equally we need to embrace and celebrate the excellence around us. And not whine about it.