I hear from friends who are in the know that the City of Albuquerque is about to suffer a dramatic and debilitating drop in revenues because of the housing bubble burst and the beginning of a recession. Building permits have dropped 60% and all of that gross receipts tax income which the city so heavily depends on will melt like an Albuquerque snow.The administrations of Marty Chavez, with the concurrence of the City Councils, have led the Duke city government on a spending spree over the last six years. The budget has soared above inflation trends and the city sprawled and crawled its way to the Rio Puerco. Unlike the State of New Mexico which has a much wider revenue stream, think oil and gas revenues, the city depends mainly on that sales tax. It is cyclical and the bad times are always sure to come sooner or later.
When I was elected Mayor in 1997 I came in just as a recession started. It forced me to curtail spending to less than the rate of inflation over four years. I followed Marty Chavez' first administration which occurred during good times. I was mainly left with shortfalls and was reviled for the budget cuts I had to make.(Like closing the Zoo on Mondays) Now Marty and the Council will face those choices too. My advice is to not give in to keeping the pork going for every little special interest group that lobbies for and then takes the city money. Then they usually tell the city to butt out. Watch the City Council closely too as they will all scratch each others back to keep their own pet projects going.
This will keep Albuquerque bloggers and reporters in stories for a while.
2 comments:
Thanks Jim. And now the city council and county commission (tonight) have created a "permanent housing slump" for our governments by approving TIDDs (tax increment development divisions)for Mesa del Sol and SunCal. The construction GRTs in these developments will mainly be diverted back to the developers, leaving the rest of the community in a shortfall. We will face increased taxes and reduced services for the next 25 years, or so!
Thanks for this info Jim. These revenue problems will happen more frequently as the national recession picks up steam. The unfortunate thing is that New Mexico always lags behind in its recovery. Once again this is President Bush’s fault for not exercising oversight over the economy. But we all knew he wouldn’t because he just isn't a detail oriented guy and he took campaign contributions from the financial, mortgage loan and housing industries that got us into this mess. Then he appointed cronies of the industries to relax the regulations on those industries that protect consumers like you and I. The George W. tax cuts were bound to backfire since we now know that the Reagan trickle down theory doesn’t work. The best way to protect the city revenues and recoup your own personal wealth is to vote all Republicans out.
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