Monday, January 28, 2013

Martinez Tax Proposals Sound Nice, But...

With two tax proposals unveiled today, Gov. Susana Martinez stepped away from the tax philosophy* that tax bases should be as broad as possible so the rates can be as low as possible. Martinez proposals also do their bit for raising taxpayer compliance costs by creating niche exemptions for taxpayers to try to understand.
Telling small businesses with a preacher-style ring to her voice that, “We will walk alongside you,” she unveiled idea of a $1,000 tax credit for every job created by businesses employing fewer than 100 people. This would be a two-year program. Businesses would have to “retain” the new employee, whatever that means.
Martinez spoke at noon to the New Mexico chapter of the Commercial Real Estate Development Association (NAIOP,
The other proposal was to exempt veteran’s retirement pay from state income tax. Now who could say no to veterans for the sake of tax philosophy?
After Martinez finished her presentation, I had a quick chat with the accountants sitting next to me.
For someone earning $30,000, the benefits might run $20,000, making $50,000 the cost of the new employee. That proposed $1,000 is two percent of the new employee’s cost, not enough of a difference at the margin to tip the hiring decision.
Compliance might be the bigger issue. We already have tax credits. Dealing with the bureaucracy in order to qualify for the credits is nearly impossible. A typical business owner lacks the time or expertise to run the bureaucratic gauntlet and probably lacks the money to pay the accountants for the chore.
* The New Mexico Tax Research Institute serves the tax-guru role. (

Saturday, January 26, 2013

Santa Fe Adds Jobs During 2012. Other Metros Don't.

Here is the Department of Workforce Services (DWS) summary of Albuquerque’s job performance. “The Albuquerque MSA continued to lose jobs over the year.
Albuquerque has experienced negative job growth for most of the past four years and is now at an employment level similar to that of 2004.”
Wage jobs in Albuquerque have declined for 13 consecutive months. Pretty amazing, as is said. Albuquerque lost 2,300 wage jobs during 2012.
DWS released the figured at 4:48 yesterday afternoon, just in time to miss the newscasts.
In the 2012 job loss race, Las Cruces beat Albuquerque, dropping 2,400 jobs. Farmington did do near so well, losing a mere 500 wages jobs during 2012, nearly all from the private sector, DWS said.
Santa Fe was the lone New Mexico metro to add jobs with growth of 1,100 jobs, all in the private sector and led by leisure and hospitality.
Statewide, a net of 3,200 jobs went away with the private sector gaining 2,400 and government losing 5,600. The feds dropped 1,100 with the state down a net of 5,600. Education added 500 jobs, 400 in state government education and 100 in local government education.
The next job report will appear March 18. The longer period between reports allows time for revisions called benchmarking.

Thursday, January 24, 2013

Carlsbad Caverns Visits Below 400,000 in 2011

Carlsbad Caverns National Park broke the 400,000 visits milestone in 2011, the most recent year for which figures are posted by the National Park Service ( But the barrier wasn't broken in a good way. The number of visits fell below 400,000 for the first time.

Online National Park Service visitor reports start with 1979, a year that showed 721,647 people coming to the Caverns. Visits fell below 700,000 for the first time in 1990. Visits cracked the 600,000 barrier in 1995 with 588,609 visits. The 500,000 barrier fell in 2000 when there were 469,303 visits.

Friday, January 18, 2013

Jobs Losses Continue in December

Wage job losses continued across New Mexico in December. The seasonally unadjusted December 2011 to December 2012 loss was 3,200 or 0.4%. The Department of Workforce Services ad the federal Bureau of Labor Statistics released numbers late this afternoon. DWS continues the nonsensical approach of talking about the state’s job growth, except that it is negative.
The monthly year-over-year job losses started in June and have continued. Before June we had ten months of tiny positive growth each month.
Among the sectors, mining, which has saved the state’s employment bacon all year, grew on 700 jobs for the year to employ 21,800 in December. Construction mysteriously showed a 1,600 job increase for the year to 42,400.
Manufacturing was up 300 jobs, about one percent. Education and health services added 1,200 jobs, also around one percent.
The big winner was leisure and hospitality with a 3,700 job increase. The sector is mostly tourism.
With a 2,900 job drop, the private sector loss leader continued to be professional and business services, home to lawyers, accountants and vast numbers of technical contractor types.
The biggest loser, so to speak, was government, down 5,600 jobs. State government provided 4,600 of those job loses, with, as reported elsewhere, nearly all from the non-education areas.
None of the changes in New Mexico’s employment picture were statistically significant. That means nothing much is happening here, but is happening brings negative totals.
The University of New Mexico forecasts job growth of more than one percent for 2013. Since I lack the pedigree to peer at the details of UNM’s numbers (that’s a long story), like you, I’m stuck with wondering what they are talking about, or smoking.

Tuesday, January 15, 2013

NM "Getting Stronger" ???

That's what Governor Martinez said in her state of the state speech today. Here's the quote, "While we still have much work to do, the state of our state is getting stronger."
Governor, that's just nonsense.

Three Years Since NM Economy Grew

In the latest edition of the New Mexico Business Outlook newsletter, just released, Chris Erickson looked at the November 2012 job numbers.
One conclusion:
"New Mexico ranked dead last and was the only state to have net negative growth for the three years ending November 2012."
Erickson is an NMSU economist and edits New Mexico Business Outlook which is the e-newsletter of the College of Business at New Mexico State University.

Monday, January 14, 2013

I Want My Kids to Stay in NM

We've heard that from politicians many times. I have always felt the lamentation was parochial and useless. The irrelevance gets support from a map on the back of the new issue of "Panorama," New Mexico State's alumni magazine.
As of June 30, 2012, NMSU had "more than 107,000" alumni. I have no idea how many of them grew up in the state, much less were born here.
While just over half, 58,416, live in New Mexico, the cat on keeping the rest of them around is long since out of the bag. Every state has a sprinkling of Aggie alums including those with really small populations such as North Dakota (64) and Delaware (51).
Rhode Island, with 49, has the smallest alumni group. Texas of course has the largest at 14,842.
If our so-called leaders quit worrying about the stupid stuff, maybe there would be time to think about why our labor force participation is low (and dropping) and what might be done about the hundreds of millions of dollars between what the Department of Transportation would like to spend building and fixing roads and the money available.

Thursday, January 10, 2013

Abq Homes Sales, Prices Up in December

The metro Albuquerque economy is a mess with private and public sector jobs disappearing. So is the state. The state employees commuting to Santa Fe still have their jobs, unlike many around the state, but there has been no raise in four years.
And single family detached home sales are increasing on both a month-over-month and year-over-year basis in total defiance of seasonal and economic trends. The Greater Albuquerque Association of Realtors released the December sales figures this afternoon.
During December, sale closed for 607 metro area single family detached homes. That was 55, or 10%, above November and 84, or 16%, above December 2011. Remember, sales are supposed to get slower as weather gets closer and families are distracted by Christmas. Maybe the December seasonal pattern is the opposite. It is now three consecutive years that December closed sales have increased from November.
Maybe some of that seasonality showed in the 720 December pending sales, which were down 59, or 8%, from November. But those pending sales jumped 19.6%, 118 units, from 602 in December 2011.
In arithmetic terms, the December sales performance has a simple explanation. A higher percentage of November’s pending sales of 779 units turned into sales closed during December. Sales closed during December were 78% of November’s pending. November closed sales were just 61% of pending October sales. October’s closed sales of 673 units were 76% of September’s pending sales.
Median and average sale prices were up from November and from December 2011. The median price was $169,500, a three percent increase from November and up six percent from December 2011. The median price was over $175,000 during five months of 2012, peaking at $175,000 in May and July.
The average price was $211,191, a mere $22 below the year’s highest average of $211,213, reached in May. The December average was three percent more than during November and up eight percent from December 2011.
The sale of two million dollar-plus homes, as compared none a year ago, helped the average.

Wednesday, January 9, 2013

NM Performance Reports Summarized: The Ugly Truth

The information that follows is taken from Harold Morgan's newspaper columns written in late 2012 and early 2013. The columns are syndicated to ten newspapers around New Mexico. The papers are in Raton, Farmington, Gallup, Espanola, Los Alamos, Socorro, Ruidoso, Roswell, Artesia and Hobbs.
Report methods vary. Specific ranks vary. But overall, we are low. Consistency counts. The public response remains the banal and conventional bemoaning of federal "dependence." To borrow Heather Wilson's elegant phrase, that's just stupid. Points missed include the huge variety of federal work, the crucial and unique nature of the key institutions, large and small, and, for me, the "dependence" metaphor, as if we stand passively.
The local media response was to whine about the quality of the statistics. Talk about missing the point….
Chief Executive Magazine
We rank 33rd in the 2012 survey of 650 business leaders by Chief Executive Magazine. Geographically we are between Texas and Arizona, respectively first and tenth in the survey. (See On the map New Mexico gains attention in a subtle way; we are one of two states between the left (er, west) coast and the Mississippi River to place below 31st in the CEO estimation. Minnesota is the other.
CNBC Top States for Business
We tied Kentucky at 36. CNBC uses 43 measures of competitiveness gathered into ten categories weighted according to state use in economic development marketing material. The categories are weighted. Cost of doing business, workforce and quality of life share the highest possible totals, closely followed by infrastructure and economy. Education, technology and business friendliness are well behind.
For eight categories, New Mexico’s rank isn’t awful, ranging from 13 for infrastructure and transportation and 15 for the economy to 31 for cost of business and 32 for the technology and innovation.
Our performance in two lighter weighted categories pulls down New Mexico’s overall rank. We are 46th for education and 47th for business friendliness. Idaho, Arizona and Nevada are below us in education. Following us in business friendliness are those landmarks of regulatory disaster, New Jersey, Rhode Island, and New York.
Brookings Institution
The Brookings Institution Metro Monitor only considers Albuquerque But the use of location quotients offers statewide insight given that Albuquerque plus Santa Fe are half the state. Location quotients compare the given area’s concentration of employment in an industry to the national average. For the third quarter of 2012, Albuquerque’s government and construction employment were well above the nation. Excellent reasons exist for some of the extra government such as research by military personnel on Kirtland Air Force Base. That construction remains with higher than average employment, even after years of declines, suggests further reduction.
Albuquerque manufacturing employment is about half the national average. Not good. The proportion of manufacturing employment has dropped 40 percent since 2000, while government (public administration) is up 40 percent. Ugly., Best States for Business and Careers
Forbes mechanism is its Scorecard for Business Climates.
Forbes says, “New Mexico took the biggest tumble, down 11 spots to No. 43 as its current economic climate and growth prospects declined relative to the rest of the country from last year.”
The Scorecard groups 35 data points into six categories. For only one category are we in the top half. It is growth prospects, oddly enough, where we are 22nd. For four categories we average a mediocre 31st place—labor supply, business costs, economic climate and regulatory environment. The quality of life category where we are 49th pulls us into the lower ten.
Employment: Lea and Eddy Counties
The following year-over-year numbers all apply to the time between November 2011 and November 2012. Except for numbers from Lea and Eddy counties, the numbers are for wage jobs.
New Mexico lost 4,800 jobs for the year, all the losses from government. Nothing happened in terms of net job production in the private sector, where there are 611,200 jobs. State government lost 4,300 jobs, the feds 1,200, and local government added 700. (These numbers come from the Department of Workforce Services, not the state personnel office.)
The combined Albuquerque/Santa Fe state government job total remained 35,700, or two thirds of sector employment. A year ago state government showed 60,800 jobs, about half in education, with 25,100 outside the north central Rio Grande corridor. Now the outside-Albuquerque-Santa Fe total is 20,800, a 17 percent drop. Education jobs grew slightly, meaning that all the losses came in non-education jobs.
Three of the four metro areas lost 7,600 jobs together, led by Albuquerque, down 3,900. Though Albuquerque did maintain state government jobs, the feds and local government combined to lose 1,000 jobs. More significantly, 2,900 private sector jobs left the four-county Albuquerque metro.
For the Las Cruces metro (Dona Ana County), 2012 was economically awful. Total jobs dropped 2,500, or 3.5 percent, with 1,800 private sector jobs gone.
Throw in Farmington’s loss of 800 private sector jobs and the three metro areas lost 5,500 private jobs. That means the private sector in the 26 rural counties and Santa Fe gained 5,500 private sector jobs. Santa Fe did its part with 800 more private jobs, including 500 in leisure and hospitality.
The real private sector heroes are in Lea and Eddy counties where, together, employment grew by 3,910. (A different number from wage jobs, “employment” includes government. It is the only recent county-level number and close enough for our purposes here.)
Employment in Lea-Eddy grew 3,190 during the year. That’s a 6.9 percent expansion. Call it a boom. Together the two counties employ 60,770, ahead of metro Farmington. Lea County alone has the largest rural county employment with 30,720 in November. Eddy County was just behind at 30,050.
From the Bureau of the Census, our population was 2,085,538 as of July 1, 2012. During the year from July 1, 2011, to July 1, 2012, a net of 7,577 people moved to elsewhere in the United States. (The figure comes from subtracting the number leaving from those coming.)
Only 2,328 (again a net figure) came moved here from outside the United States. Combine the two and we get what the Census geeks call “net negative migration” was 5,229 for the year. We have Harding County on a statewide scale.
“Death Spiral States”
We lead a group of eleven states called “death spiral states” by
“Death spiral” is harsh. So is the “taker/maker” distinction employed in the post by staffer William Baldwin, who says, “A taker is someone who draws money from (state or local) government, as an employee, pensioner or welfare recipient. A maker is someone gainfully employed in the private sector.” To make the spiral list, a state needs more takers than makers and to be in the lower half of a credit analysis by Conning & Co., a money manager that measures risk in insurance company portfolios.
New Mexico has the highest taker / maker ratio at 1.53. Mississippi is second. There it is. We’re in excusive company. California, New York and Illinois are among the eleven. The future is “a rising tax burden, deteriorating state finances and an exodus of employers,” Baldwin says.