I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
Albuquerque’s new mayor faces a ‘grim’ economy
When Richard Berry moves into Albuquerque’s mayor’s office in December, he’ll inherit a government faced with significant economic challenges. While Mayor Martin Chavez was hammered during the campaign for companies closing shop and leaving town, the reality is that Albuquerque itself—like other cities—is being hammered by the worst economic crisis the nation has seen in generations.
The conditions in local job markets are “grim” according to the Sept. 24 state labor report. In the past year, Albuquerque has lost 14,500 jobs, and the state as a whole has lost 30,900. It’s the worst the state has seen since January 1944, the report said.
“Economically, we are in tough times,” Berry told the Independent Tuesday night as results were streaming in at the Sheraton Uptown. “There’s no question about it.”
“I don’t envy him,” local economist Gerry Bradley, of New Mexico Voices for Children, said Wednesday. “Any mayor who comes into this situation is going to be in a world of hurt. Most of us are astonished at how badly the economy is doing. We don’t have experience looking at an economy this bad, to tell you the truth.”
Bradley’s observation was echoed by Lee Reynis, who heads up the University of New Mexico’s Bureau of Business and Economic Research.
Reynis said she has not seen such a deep recession in her lifetime, and it could get worse before it gets better.
“This is a pretty serious recession, no question,” she said. “The first half of 2009 was weaker than what we thought it would be, and it’s not clear what the trajectory is.”
For Albuquerque, Reynis said, one serious problem is a decline in gross receipts tax, which is largely responsible for funding city government.
The gross receipts tax is a broad-based tax, Reynis explained. That employment is down across the board–which it is in Albuquerque for the most part, with the exception of education, health care, and some government jobs–indicates that gross receipts tax collections are down significantly.
The near-dormant housing construction industry has had a serious impact on the city’s coffers, as have “incredible” declines in retail employment, she said.
Ultimately, Reynis said, the big question is whether or not a graph of the recession will look like a “U” shape or a “W” shape when it’s all said and done.
“We have to recognize that we’re going through a cycle that we’ll climb out of,” she said, “but a lot of us are also wondering if there will be a second downturn making it look more like a “W,” with two troughs.”
Reynis said that if city leaders envision that the city will come back in the not too distant future, they should strive to continue providing services rather than undertaking dramatic cuts or laying off people.
“You don’t want to add problems to the economy by cutting government spending, which would have ripple effects,” she said. “You want to respond in a deliberate and measured way [by finding] money within the city to use in an effort to tide you over without cutting critical services.”
“So, for an incoming mayor, I’d say you get people savvy about what the opportunities might be. It’s an economic and fiscal crisis. We need to figure out how to get through it, recognizing that we will get through it.”
Berry said Tuesday night he’d draw from his background in business to show him the way.
“As a business person, you go through difficult times, you go through good times,” he said. “You learn how to build budgets that you have to live by personally. And you have a profound respect for people that work with you in your organization. So I think through these tough times it’s going to be some of those skills and some of that attitude that I bring in that are going to help us.”
And he indicated he believes Albuquerque will pull out of it, just as Reynis does.
“I like to believe that the economy is starting to trend in the right direction,” he said. “I think the unemployment numbers are too high. We’ve got a long ways to go but Albuquerque’s a great city. We’re going to be fine in the long run.”