Business leadership sought for big issues
Insight about real, substantive issues facing New Mexico is a continuing quest in this column.
The matter of driver's licenses for illegal immigrants offers a contra-example. While a problem, it simply is not a substantive issue. It has little to do with the measure that counts — improving the daily lives of the more than two million New Mexicans.
To help prevent my narrow-focus blinders from getting deeply embedded, I visited recently with a friend who has watched the New Mexico economy longer and at greater depth than I have. He didn't want his name used here.
The state economy is mired in the deepest recession since the depression, he began. We also are mired in Bill Richardson having been our worst governor, perhaps ever, which would be quite an honor.
A solution from the past — leaders of large local companies stepping up — doesn't exist. Banks and utilities played this role. Now, my friend says, the New Mexico versions of Bank of America and Wells Fargo are merely big branches. He overstates. As noted here before, local deposits are 0.4 percent of B of A's total and 0.8 percent for Well Fargo, making us a footnote.
PNM Resources, the utility in this equation, has other problems such as the assault from the Environmental Protection Agency.
Larry Willard (Norwest), Bing Grady (Albuquerque National/Sunwest) and Bill Trembly, where are you when we need you?
Banking change is happening.
Last month New Mexico Banquest Corporation, holding company for First National Bank of Santa Fe, announced its merger (Banquest's word) with Bill Sanders' Strategic Growth Bank of El Paso. Strategic Growth plans to build a regional bank in the Southwest. However, any community impact won't show for a while.
Casting blame on Bill Richardson echoes President Obama blaming George W. Bush for everything. But Richardson did leave an ugly legacy. Richardson, my friend observed, eliminated the tax base by moves including removing the gross receipts tax on food; spending $400 million on the Rail Runner commuter railroad, more hundreds of millions on the G.R.I.P. highway program and the Spaceport; watching the state pensions become massively insolvent.
The Spaceport may yet become real, it should be acknowledged.
Along with G.R.I.P. highway building, Richardson spent millions on college buildings, providing a big boost to the construction employment bubble, now thoroughly deflated. Add the residential bubble and construction had a nice life for years.
The headlines given the unemployment rate annoy my friend. It is a bad number. The figure for wage jobs is much more reliable. Two nuances: Because the unemployed are measured by place of residence, a person getting a job in another state improves the reported unemployment by leaving and thereby dropping from the labor force. All sorts of companies, especially defense contractors, have staff who are themselves contractors. When contractor employees cease work, they become unemployed, but from the statistical framework, they disappear, becoming both unemployed and uncounted.
Infrastructure spending is great. Yes, fix the Paseo del Norte/I-25 interchange in Albuquerque. We also need to pay the public employees doing the work. Richardson's wasted millions could have gone to the employees, my friend grumbles.
Defense spending here gets less of my friend's worry time because we have two competitive advantages — isolation and wide open space.
With just a little irony, my friend notes that New Mexico tax revenue could increase after the federal cuts in income tax deductions. The state income tax is based on the feds. Your state tax computation starts with federal adjusted gross income. Increases in that number via fewer deductions will fall through to more tax money to the state.
Such an increase would be an accident, leaving big issues untouched as usual.