New Mexico Independent » Economic Stimulus

Gov: ’10,000 jobs due to stimulus’

Larry Behrens — Sat, 30 Jan 2010 00:17:11 +0000

Governor Richardson said in a press release Friday that 10,00 full and part time jobs are the result of federal stimulus money. In a breakdown of the numbers 7,372 people got full or part time jobs in the last quarter of 2009.

Governor Richardson hailed the numbers, saying in the release:

“The American Recovery and Reinvestment Act has definitely had a positive impact on New Mexico’s economy,” Governor Richardson said. “This is just a snapshot of stimulus spending in New Mexico, but it’s clear that thousands of people have work and hundreds of millions of dollars are flowing throughout the economy. The impact has been felt in every county in the state, and in both urban and rural New Mexico.”

The Governor said the jobs are spread all over the state but are primarily in public schools and in transportation. The release says New Mexico should recive $3.4 billion dollars in stimulus money, with $2.1 billion being shuttled through state government.

Green jobs bills aim to make most of federal stimulus money

Marjorie Childress — Fri, 20 Feb 2009 07:46:29 +0000

SANTA FE — That the economy continues to teeter was clearer than ever this week, when 800 employees at Albuquerque-based Eclipse Aviation were sent home on what the company said it hoped were temporary furloughs, and another 230 were laid off by Chevron Mining in northern New Mexico, affecting about 10 percent of the population of the small town of Questa.

Meanwhile, thousands lined up for a job fair Wednesday night organized by U.S. Rep. Martin Heinrich at Alamosa Community Center on Albuquerque’s West Side.

Given these hard times, all eyes are on the economic stimulus package. But whether it’ll work for New Mexico might lie in how well-prepared our state is to leverage those federal funds.

A package of green jobs bills before the Legislature could be key for how the state uses money dedicated to clean energy, said John Fogarty, executive director of the nonprofit advocacy group New Energy Econom. The final federal package provides potentially $1.15 billion for “green” jobs training, in a larger $113.5 billion package to stimulate a “clean energy” economy.

“These bills if passed would demonstrate one of the most comprehensive approaches to fostering a green economy in the nation,” Fogarty said.

And, he said, they’ll help New Mexico link the federal stimulus money to on-the-ground job creation and training.

“We keep hearing from our congressional delegation that the money will go preferentially to states that show they are invested in green technology and have made an effort to create green job training programs,” Fogarty explained.

The three bills together are a package, and would provide training through educational institutions, give support for green companies to hire workers and offer incentives for businesses to relocate to the state.

House Speaker Ben Lujan, D-Santa Fe, is sponsoring HB 622, which would approve up to $20 million from a state revenue bond for higher education institutions to create green job-training programs. Priority for funding would be given to programs that help certain disadvantaged populations, such as tribal, rural or lower-income communities.

State Sen. Eric Griego, D-Albuquerque, has sponsored two bills that direct existing money to support green job creation and training.

The definition of “green” in his bills is broad, he said, but the goals are clear: The outcome of the company’s work preserves or enhances “environmental quality” and provides “opportunities for advancement along a career track of increasing skills and wages.” In other words, qualifying jobs are those that are good both for the environment and the worker. It’ll be up to those who administer the programs affected by his bills to develop criteria for whether a company meets that definition.

Griego said his bills are modeled on the support given to the film industry, minus the 25 percent tax credit component.

Another bill, SB 318, would allow up to $1 million of Job Training Incentive Program (JTIP) funds to help green businesses train their workforce.

The JTIP fund is one of the main economic development incentives offered by the state, but it’s limited to jobs created by companies that are net exporters — those that export more of their product than they sell inside the state. This means that mainly manufacturing companies are eligible. The current exception is the film industry, and this bill would add green jobs as an exception, regardless of what kind of company creates them.

And SB 420 would allow up to 6 percent of the Severance Tax Permanent Fund to be used for zero-interest loans of up to $15 million each to green companies — just as allowed for the making of films in the state.

The severance tax fund is an endowment fund into which tax revenues collected on natural resource extraction are placed. The fund’s primary mission is to retire debt on bonds issued for a wide variety of capital projects.

Griego said these loans would help smaller companies in the state “get up to scale” and become more competitive in trying to get support through the stimulus package.

Ahead of the game

New Mexico is ahead of the game when it comes to clean energy because of the work that’s already gone into building that sector, Rep. Heinrich, an Albuquerque Democrat, told the Independent at the Alamosa Community Center job fair.

“We have a leg up over a lot of other places because of the work that’s already happened here,” Heinrich explained. “We have [clean energy] businesses on the ground, as well as people who are ready to start businesses, plus the research institutions.”

But the tough economic times have dampened the growing clean energy momentum in New Mexico, Heinrich said.

“In my first 40 days in office, there’ve been a continual stream of people contacting my office who are ready and capable to start up [clean energy businesses], but there isn’t any lending happening,” Heinrich said. “What’s essential is getting the resources to people who are ready to go.”

Heinrich said that local, state and federal governments must work together to support the sectors likely to create jobs, like clean-energy industries.

And Griego — a former assistant secretary for the New Mexico Economic Development Department — said one of the biggest challenges with economic development, in any sector, is ensuring there’s a trained workforce for new jobs.

“It’s a huge problem,” he said. “We can talk green jobs all we want, but if we don’t fund these types of programs, we won’t get it going.”

GOP reps claim proposal would create 6.2 million jobs … but would it?

Matthew Reichbach — Fri, 30 Jan 2009 01:39:43 +0000

If you were watching C-SPAN Wednesday during the debate in the U.S. House about the economic stimulus package, you probably noticed a new talking point coming from the Republicans.

The Republicans, every single one, voted against the bill. Instead, they offered their own bill that focused on tax cuts, and in defense of that bill, the number that kept coming up was “6.2 million.” That’s not the amount of money spent on a program, but rather the number of jobs they said would be created with their alternative stimulus bill.

So where did they get their number? Josh Marshall from Talking Points Memo said, “Well, it turns out, pretty much out of their backsides.”

Elana Schor, also of Talking Points Memo, analyzed the fuzzy math the Republicans were using.

The Republicans used the results of Dr. Christina Romer, the chair of Obama’s Council of Economic Advisers, in a weird way. A GOP document says this:

Using different assumptions and different sample periods, they estimated that a change in taxes equal to 1 percent of GDP resulted in a 2.2 percent to 3 percent change in GDP, with tax cuts increasing GDP.

We find Dr. Romer’s previous conclusions on the economic impact of change in tax policy as an appropriate multiplier for examining the impact of stimulus proposals.

OK, what’s the problem? Plenty. Schor writes:

Except that the Romer analysis used by the GOP (linked to in the third paragraph of this page) never examined the effects of tax cuts on a deflationary economy — it looked at the effects of tax increases on the economy as a whole and found a negative effect of 2.2% – 3% on GDP.

The Republican analysis simply flipped those numbers to positive and applied them to the GOP-backed tax cuts, then multiplied the result by a broad job creation estimate used in a recent paper from Romer and Jared Bernstein, an economic adviser to the vice president. If you read the Republicans’ document, you can see the caution advised in assuming that 6.2 million jobs would be created by their plan.

In other words, they took an economic analysis of raising taxes, flipped the numbers and said that was what would happen if they instead cut taxes.

House Dems say their stimulus proposal is needed to avert ‘economic chaos’

Marjorie Childress — Fri, 16 Jan 2009 22:31:24 +0000

The $825 billion federal stimulus proposal presented by House Democrats this week proposed $275 billion in tax cuts and $550 billion in spending. That’s $25 billion less in tax cuts than the figure President-elect Obama has used in recent weeks.

According to the Washington Post, House Speaker Nancy Pelosi, D-Calif., called the stimulus proposal a “first step along the way” in what is expected to be an intense, four-week negotiating period with the Senate. Pelosi and Senate Majority Leader Harry M. Reid, D-Nev., say they’ll deliver the final bill to Obama before Congress departs for a President’s Day recess, and that legislators won’t sleep until that happens.

Their arguments — presented in the summary of the proposal — rest on a stark assessment: Without it, the country faces “economic chaos.”

The summary, by the way, is excellent reading.

The economy lost 2 million jobs in the last four months and is projected to lose another 3 million to 5 million in the coming year. Unemployment is going to continue to rise, they say, even with this stimulus package. But without the infusion of federal cash, it will soar into the double digits — and that doesn’t count the numbers who’ve been shifted from full-time work to part time.

And while the deficit will grow dramatically, the Democrats say that without the stimulus spending the growing deficit “…will be devastating and we face the risk of economic chaos.”

While it might seem counter-intuitive that the deficit will grow more if we don’t spend close to a trillion dollars, the Democrats contend that the spending will lead to more economic activity, which will decrease the payment of unemployment benefits and increase tax revenue.

The economic crisis is laid at the feet of consumer debt, which was propelled by stagnant wages while the rich got a heck of a lot richer during the recent economic boom.

The figures given are stunning: 96 percent of income growth in this country since 2001 went to the wealthiest 10 percent, while the rest of the country sustained its standard of living by “…borrowing…and borrowing…and borrowing”:

Since 2001, as worker productivity went up, 96% of the income growth in this country went to the wealthiest 10% of society. While they were benefiting from record high worker productivity, the remaining 90% of American’s were struggling to sustain their standard of living. They sustained it by borrowing… and borrowing… and borrowing, and when they couldn’t borrow anymore, the bottom fell out.

The result is that the credit market eventually froze up because of a consumer base stretched beyond its ability to pay debt–including mortgages, a subsequent lack of consumer spending, and businesses consequently laying off workers or simply shutting down.

The document also gives the rationale behind the bulk of the stimulus package being designated for direct spending rather than tax cuts.

In a nutshell, Americans are so strapped by debt that they’re more likely to spend any tax cut or stimulus check on paying down their debt, rather than consuming new goods and services:

The tax rebates last spring showed that Americans have become so concerned about
their debt and saving that they will not spend a large fraction of any tax cut. Over the last two
decades, Americans’ saving rate went from 8 percent of income to near zero. … As we saw in the spring [when the federal government issued stimulus checks], a sizable fraction of any tax cut to them will be used to pay down debts and not be spent. The same logic applies to tax cuts for corporations who have become more obsessed with reducing their excessive leverage than in hiring or investing.

On the other hand, the authors state, direct federal spending will have nearly complete “pass through” to new goods and services.

Even after the economy hits rock bottom, we’ll continue to need a fiscal boost, the authors say, because the “usual drivers” of recoveries from recession don’t seem viable this time around: housing and auto sales.

So if not housing and auto sales, then what?

The spending proposals are focused in these key areas:

~ Increasing renewable energy production capacity plus renovation and weatherization of buildings to make them energy-efficient.

~ Expanding science and technology research plus broadband access.

~ Investing in transportation infrastructure: roads, bridges, highways, transit, rivers.

~ Investing in education at both the local and state level, from K-12 to higher ed.

~ Health care Investments to computerize health care records, plus investments in preventative care.

~ Helping the unemployed by expanding the food stamp program.

~ Providing state fiscal relief to save public-sector jobs, particularly teachers and public safety workers.

The stimulus plan lays out a laundry list of targeted spending, and between now and President’s Day we’re likely to see quite a few changes. Not to mention, the Washington Post noted, the Republicans already don’t much of it:

GOP lawmakers also balked at the thousands of individual projects designated for funding in the House plan. “Oh, my God,” House Minority Leader John A. Boehner (R-Ohio) said to reporters. “My notes here say that I’m disappointed. I just can’t tell you how shocked I am at what I’m seeing.”

To be continued–stay tuned.

Mayor Marty’s infrastructure wish list comes in at $1.6 billion

Matthew Reichbach — Wed, 10 Dec 2008 18:32:59 +0000

Albuquerque Mayor Martin Chavez wants $1.6 billion from Barack Obama. Well, not in the way that Rod Blagojevich wanted money from politicians, but rather for the city government he leads.

KOB-TV reported that Chavez sent over the wish list at the request of Obama — for big-city mayors and the projects they want included in an economic stimulus package. What projects does Chavez want to help out the Duke City?

More than $500 million would pay for a solar plant near Double Eagle Airport. Mayor Chavez says the plant and would bring in 200 jobs.

The mayor says he also wants $250 million to start using alternative energy in new homes, $213 million for a solar plant at the Cerro Colorado landfill, $140 million for the Double Eagle wind farm, $90 million for the first phase of the streetcar project on Central Avenue and $60 million for other city transit needs including the replacement of out-of-date fleets.

Money would also go to make major improvements at the Sunport. University Boulevard improvements are also on the list, along with close to a dozen other streets.

It looks as though Chavez is tailoring his list to what he thinks the president-elect will approve — green projects like the solar plant near Double Eagle Airport. Also some pet projects of Chavez’s, including upgrading the transit facility.

Of course one project will jump out to to those who have followed local politics in the last few years — the streetcar project. I have a feeling there will be a lot of criticism for Chavez for including that project in his list of projects for Albuquerque.

The 95 projects on the list would create 5,000 jobs, according to Chavez, mostly for contractors and builders.