January 2016

Newsbites – January 2016


Economic Diversity in New Mexico

A diverse economy can help a state weather economic downturns. According to the Labor Market Review, released in August 2015 by the New Mexico Department of Workforce Solutions, New Mexico has one of the least-diverse economies in the country, ranking 45th among states. That is a score that does not indicate a balanced economy generally associated with economic stability. New Mexico has a large government workforce and a large mining and energy sector.

The Hachman Index location quotient is a calculation of a specific employment sector’s size relative to total employment. A 1.0 means a sector’s employment share is even with the national average. The Labor Market Review shows that New Mexico’s location quotients are especially high for mining, quarrying and oil and gas extraction, at 6.18; agriculture, forestry, fishing and hunting, at 1.70; and utilities, at 1.50. The state’s location quotients are low for manufacturing, at 0.43; management of companies and enterprises, at 0.44; and educational services, at 0.65.

The larger counties in New Mexico have a more diverse workforce. Bernalillo is the most diverse, at 0.92, but still falls short of national norms; Otero is second, at O.88; Santa Fe is third, at 0.83, followed by Doña Ana and Chaves counties.


New Mexico Jobs and Worker Emigration

A recent study by the U.S. Census Bureau identified New Mexico as the fourth-most-active state in the United States for business startups.

New Mexico’s job growth has been expanding but is still lagging behind the rest of the country. Despite adding 3,900 jobs between October and November 2015, the state’s 6.8 percent unemployment rate is the highest in the nation, according to a Bureau of Labor Statistics report released last month. The national rate is 5 percent. In October 2015, the Department of Workforce Solutions reported that the total number of workers in New Mexico had grown by 7,600 over the past 12 months.

Notable job losses over the past year impacted the mining sector, which lost 10 percent of its workforce, and areas related to energy development such as construction, transportation and manufacturing. Hiring has continued to increase in healthcare, leisure and hospitality, business and professional services, and government. Goods and services from New Mexico sold internationally have also supported job growth, although many of the goods exported are produced elsewhere.

Exodus from the Land of Enchantment continues to increase, though at a slower rate (-0.02 percent) than the previous three years. According to the U.S. Census Bureau, New Mexico is one of seven states in the nation that lost population from July 2014 to July 2015. Many have left attracted by more employment opportunities elsewhere.

Business leaders are challenged to attract and keep trained employees. One of the state’s most important public-policy issues is the exodus of educated young professionals. Data from the University of New Mexico show that the largest percentage of those leaving is educated professionals with a bachelor’s degree. A significant number of those are millennials (born between 1981 and 1996). Two business advocacy groups, the Association of Commerce and Industry and the New Mexico Technology Council, have been surveying educated young professionals who have left the state to find out what it might take for them to return. The groups are taking the results of the survey, along with specific recommendations, to the state Legislature.

Middle-aged people have also been leaving. A recent Pew Charitable Trust study ranks New Mexico last among states when it comes to jobs for people in their prime working years—and far below the national average. The study says that New Mexico suffered a 7.1 percent decrease in employment since the Great Recession in 2008.


Child Welfare in New Mexico

In 2015, for the second consecutive year, the Annie E. Casey Foundation ranked New Mexico 49th among the 50 states in child well-being. It was 50th in 2013 and has been listed among the bottom five states for most of the past decade. The foundation’s The KIDS COUNT Data Book used 16 indicators under the general categories of economic well-being, education, health, family and community. Data were culled from the U.S. Census Bureau, the U.S. Department of Education and the U.S. Centers for Diseases Control and Prevention.

The report found 31 percent of the state’s children living in poverty, up 2 percentage points from 2014. The national rate is 22 percent. Since the 2008 recession, the number of children in New Mexico living in high-poverty areas increased by 25,000—to 125,000—and children living in families where no parent has full-time, year-round employment increased by 27,000—to 176,000.

The report highlights some improvements. New Mexico high school students not graduating on time dropped from 33 percent in 2008 to 26 percent. The rate of teens abusing drugs or alcohol in the same time period dropped from 9 percent to 7 percent. Children living with families in which the head of the household lacks a high school diploma declined from 21 percent to 18 percent.

It all comes down to government resources at the state level, and if the state is providing children with such things as early education, access to healthcare, nutritional subsidies for low-income families and other targeted services,” said Jill González, a spokeswoman and analyst for WalletHub. The Washington, D.C., consumer-based personal-finance website conducted a similar survey with similar results. “In the case of New Mexico, children are not flourishing,” she said.


National Education Report Ranks New Mexico

In 2015, Education Week’s Quality Counts released its annual state report card, giving New Mexico a D. The national report on educational achievement, which includes the District of Columbia, ranked New Mexico 49th in the nation, ahead of Nevada and Mississippi. Using data from the National Assessment for Education Progress, the National Center for Education Statistics and the U.S. Census Bureau, the report ranks states on how well they prepare students for college and careers, K-12 achievement and school finance.

New Mexico has moved up and down between an F in 2010—the year Gov. Susana Martínez was elected—to a C in 2011, 2012 and 2013 and a D-plus in 2014. The state has climbed in the national rankings of fourth-grade and eighth-grade math tests between 2003 and 2013 but ranks 50th overall in reading proficiency, with just 21.5 percent of students reading at grade level. The national average is 34 percent.

In 2014, New Mexico ranked 36th in per-pupil spending at $9,736, according to the report, while the national average was $11,735.


Graduation Rates in New Mexico

According to U.S. Department of Education graduation rate data released last month, New Mexico remains in the bottom tier of states, at 68.5 percent. There was no improvement in 2013–14 over the previous year, despite some education reforms.

An analysis of New Mexico Public Education Department data by the Associated Press last year found that some rural school districts saw about a 20 percent drop in high school graduation rates over three years while others declined by 15 percent in just a year.

Officials from the state’s Public Education Department say the new federal data do not reflect updated graduation statistics that put the rate at 69.3 percent. That is still the second-lowest in the nation and 1 percent lower than 2012–13. The national rate is 82 percent.

The state’s largest school district, Albuquerque Public Schools, which serves about 87,000 students, had a 6 percent decline in 2014. Its four-year graduation rate was 62.7 percent. Española Valley Public Schools had one of the highest increases—10 percent since 2011. The district’s current graduation rate is 55.5.

Robert McEntyre, a Public Education Department spokesman, said, “New Mexico has made significant progress over the last several years and continues to have one of the fastest-growing graduation rates in the country.” Referring to a 7-point increase between 2011 and 2013, McEntyre said, “Since 2011, our graduation rate has grown at three times the national average.” Another positive trend showed that, in 2014, almost 67 percent of New Mexico’s Hispanic students graduated, an increase of about 8.6 percent from the previous year.


Food Assistance in New Mexico

According to the Hunger in America Report 2014, hunger and food insecurity continue to be widespread throughout New Mexico. The report, compiled by Roadrunner Food Bank and Feeding America, showed that 70,000 people in the state seek food assistance each week: 30 percent of them are children under age 18; 8 percent are under age 5; 21 percent are senior citizens; and 53 percent of hungry families are among the working poor.

In 2014, AARP New Mexico developed a white paper that identified challenges to ending hunger. Cited were lack of employment or low wages, barriers that prevent people from seeking benefits, a focus on quantity of meals and not the quality of meals, and the increasing demand put on food banks even as donations are low.

As of Jan. 1, in order to receive federal food aid, any able-bodied, childless person aged 18 to 50 must participate in the state’s job-training program if he or she is not in school or does not meet certain exemptions. New Mexico’s proposed requirements go beyond federal requirements.

For the past two years, AARP New Mexico and the North Central New Mexico Economic Development District have been among the organizing agencies for the annual End Hunger Summit, held in Albuquerque, in September. Through workshops and exhibits, the summit examines hunger-related issues such as nutrition, public assistance, resources for the homeless, after-school snack programs and approaches to addressing food insecurity.


New Mexico’s Health Rankings

The public policy organization New Mexico First (nmfirst.org) has released a statewide progress report. It found many improvements. Heart disease deaths and the number of smokers have gone down, and the number of children current on their vaccinations went up. The number of residents with health insurance has gone up significantly. The report attributes this to the Affordable Care Act. However, diabetes and substance-abuse deaths have not improved, and child hunger is still a problem, according to the report. And mental-healthcare access is only meeting 25 percent of the need.

The United Health Foundation’s annual portrait of the nation’s health, based on 30 factors that include clinical care, personal behavior and community and environmental conditions, has ranked New Mexico at the lower end of the scale, at 37th. That’s down from 33rd in 2014 and 32nd in 2013.

On the plus side, the report shows that New Mexico has low rates of cancer and cardiovascular deaths, low rates of excessive drinking and good air quality compared to other states. That is contrasted with a high rate of diabetes (ranking 40th of the 50 states, with 11.5 percent of adults diagnosed), high rates of infectious diseases such as chlamydia, pertussis and salmonella, a lot of low-birth-weight babies (8.8 percent, reflecting poor access to prenatal care and many drug-addicted mothers), a high teenage-pregnancy rate and many children living in poverty.

The high poverty rate impacts high crime rates and drug addiction. New Mexico ranked among the highest—49th—for drug deaths. The state also has had a relatively high number of occupational fatalities (6.3 deaths per 100,000 workers).

The full report can be accessed at www.americashealthrankings.org


Climate Change Threatens New Mexico’s Woodlands

A recent study conducted by a Los Alamos National Laboratory researcher says that conifers like piñón and juniper that commonly dot some New Mexico hillsides could be wiped out by climate change by 2050, give or take a decade or two. Ecologist Nate McDowell is the lead author of a paper published last month by an international team in the journal Nature Climate Change. The study focused on lower-altitude, more-drought-tolerant trees but echoed earlier LANL research that had similar findings for higher-altitude forests with trees such as ponderosa pine, which may also be wiped out by long-term patterns of higher temperatures. Due to drought and bark beetles, higher-altitude trees in some areas have already been wiped out.

Paradoxically, the trees’ survival mechanism may hasten their demise. To prevent water loss, coniferous trees close their stomata—openings in the needles that take in gases. But this also prevents the trees from taking in their food source—carbon dioxide (CO2)—and stops photosynthesis. As it gets warmer, the trees may not take in enough CO2.

Five years of field experiments and other research showed that trees deprived of about 50 percent of the precipitation to which they are accustomed resulted in 80 percent mortality. Pockets of trees isolated from insects or fire might last longer, but wildfires could accelerate the rate of the trees’ demise, the study says.


Clean Economy Summit 2016 • January 30–31

Sandía Preparatory School, Albuquerque, New Mexico

The Clean Economy Summit is a gathering of accomplished, innovative presenters, who provide lessons and demonstrations for anyone interested in building a more sustainable future. The event is a synthesis of workshops presented by the Carbon Economy Series. Examples of topics to be covered include Permaculture design in the high desert, sustainability and education, practical ways we can shrink our carbon footprint, and economic and medicinal uses of hemp.

Saturday’s $99 registration fee includes a gourmet lunch catered by Farm to Table—a North Valley restaurant that uses local, organically grown food—and a social mixer after the talks. Saturday’s events run from 8:30 a.m. to 5 p.m. Sunday’s presentations run from 9 a.m. to 12 noon and cost $40. For details, call 505.819.3828 or visit www.carboneconomyseries.com


Gallup Goes Solar

Gallup, New Mexico’s mayor and city council recently voted unanimously to publish a request for proposals (RFP) for construction of a 10-megawatt solar park on 89 acres of city-owned land. This would be in the form of a tax-exempt lease purchase. Because the city is a nonprofit, the federal 30 percent tax credit would not apply, but the proposal not only includes construction of the park but also allows for a for-profit investor to fund it. This effectively leaves the city with no up-front cost. After five to 10 years, the investor would then sell the park to the city after benefiting from the 85 percent accelerated depreciation and selling the power to the city at wholesale cost during that time.

Fourteen solar companies attended the pre-bid meeting at Gallup City Hall on Dec. 7. Those companies had a deadline of Dec. 30 to submit plans, and the proposal is to be chosen by the end of January. The park should be up and running by December 2016.

A local nonprofit, Gallup Solar (www.gallupsolar.org), claims key responsibility for the RFP by successfully advocating for the insertion of wording in the city’s recent power-purchase agreement with Continental Divide Electrical Cooperative to allow the city to self-generate up to 10 percent of its peak power needs.


$64 Million Solar Plant Planned

The Navajo Nation is planning its first utility-scale solar plant, capable of powering about 7,700 homes. The $64-million, 27-megawatt project on 300 acres in Kayenta, Arizona, will be completed by the end of the year.

Federal loans and tax credits are being used to help finance the plant. It is economically feasible because it is accessible to an electric substation, and existing transmission lines can carry power to homes in the region. A major utility in the Phoenix area—the Salt River Project—will get renewable-energy credits from the plant to help meet a mandated goal of having 20 percent of its portfolio from sustainable sources by 2020.

Walter Haase, general manager of the Navajo Tribal Utility Authority, has said that the solar project “will be the first step in the green economy of the Navajo Nation.” Except for a few small solar facilities, the tribe doesn’t currently generate any of its own electricity and spent $30 million in 2014 on power from coal, natural gas and water.

Native American Business Incubator Certified

Last month, New Mexico Economic Development Department Secretary Jon Barela presented the Navajo Tech Innovation Center in Church Rock with state certification, making it New Mexico’s first Native American state-certified business incubator. The NMEDD will invest $18,500 in the enterprise. Navajo Technical University submitted the certification application and is managing the incubator.

The center includes 27,000 square feet for both the incubator facility and production space next door, with a training room and arts center. Nearly five years of work has gone into developing the center, which will mentor Navajo businesses as they move from the incubation facilities to their own spaces. The center is already serving 27 client businesses. 

Benjamin Jones, entrepreneurial director for the center, said, “Entrepreneurship is critical to our economy. Entrepreneurs create jobs and new revenue; they are typically dedicated to staying where they are and have chosen a business model accordingly; and they also generally provide indigenous products and services, which new companies from elsewhere are unfamiliar with.”

Small-business incubators provide startups with targeted support and resources to help launch a successful business. Incubators house and support businesses as they develop at their own pace. Studies have shown that incubated businesses have a survival rate of 87 percent, while only 44 percent of small businesses that work in isolation survive. Incubator-based enterprises are also more attractive to prospective investors. The incubator-certification process and requirements provide “best practice” standards to ensure the sustainability of the incubator. The new Navajo Tech Innovation Center brings the total to six active certified incubators in New Mexico.


Albuquerque Ranked As One of the Greenest Cities

WalletHub analysts recently released their list of the greenest cities in the United States, based on their study of 100 cities. Cities were measured on 13 key metrics across four dimensions: 1) Environmental Quality, 2) “Greenness” of Transportation, 3) “Greenness” of Energy Sources and 4) Green Lifestyle and Local Policies.

Overall, Albuquerque ranked 17th but did best in Environmental Quality, ranking third. That category includes air quality, greenhouse gas emissions, green space and water quality.

Since 2010, Albuquerque has completed 98 energy-efficiency projects, estimated by the city’s Environmental Health Department as having saved taxpayers more than $2.6 million in energy costs and reducing the city’s carbon footprint by 11,500 metric tons—the equivalent of planting nearly 300,000 trees or taking 2,400 cars off the road. Albuquerque also has a program that ensures that vehicle emissions are within limits. Its transit system which, in 2014 and 2015, put 21 new compressed natural gas (CNG) buses in its fleet, boards approximately 13 million passengers each year. There are also programs to curb dust and smoke.

In 2013, through a public-private partnership, the city opened a new recycling facility and delivered blue bins to residences across the city. In its first year, residents recycled over 33,000 tons.

Albuquerque has been touted in various publications as a “Best American City for Parks” due to having 290 parks totaling 2,200 acres, as well as 29,000 acres of open space and over 140 miles of multi-use trails. ABQ BioPark’s Botanic Garden, with 1.5 miles of paths, is ranked by the Travel Channel as one of the best in the country.

The city also permits more green-certified homes than any metro in the country, according to Home Innovation’s Vice President Michelle Desiderio, as quoted in Albuquerque Business First.


State Auditor’s Report on Governmental Financial Audits

The New Mexico State Auditor’s Office released a first-of-its-kind report in 2015 that analyzes the most recent audits of hundreds of government entities, including state agencies, cities, counties and school districts. The results in “The Findings Report: A Summary of New Mexico’s Governmental Financial Audits” provide a snapshot of how government is working using three measures: the audit opinion (a measure of transparency); types of annual audit findings (a measure of good practices); and repeated audit findings (a measure of progress toward fixing what is broken).

Some of the report’s insights:

94 percent of entities are providing reliable financial information to the public. However, a handful of state agencies received less favorable opinions, including the Corrections Department, General Services Department, Regulation and Licensing Department and the Office of Secretary of State.

Of the more than 2,000 “findings” across audited entities, 50 percent represented significant issues or problems. Entities with the most findings include the Public Education Department, Albuquerque Public Schools, city of Albuquerque and Cibola County. Some of the entities with no findings—indicating a clean bill of health—included the Legislative Finance Committee, New Mexico Supreme Court and Commission of Public Records.

Many findings related to “component units,” such as charter schools in a school district or housing authority in a city, which may require increased oversight.

The State Office will release The Findings Report yearly to give the public and policymakers a mechanism to track potential fraud, waste, abuse and public dollars. The report may be accessed at http://osanm.org/government_accountability_office


The Film Industry in New Mexico

In fiscal year 2015, New Mexico hosted 25 major film productions, and the industry pumped a record $288 million into the economy, according to the state’s Film Office. In a news release, Gov. Susana Martínez credited the state’s incentive program for film and television productions for the increase in revenue from 2014, when the industry brought in $82.8 million. Tax rebates are provided on allowable expenses such as crew salaries, location rentals, and rentals of equipment, vehicles and hotel rooms.

Up to $50 million in New Mexico rebate expenditures are allowed each year. An analysis commissioned by the Film Office found that the industry brought in between 2,500 and 4,000 full-time jobs from 2010 to 2014 and generated nearly $514 million for the state’s economy during that period.


BP Buys New Mexico Oil and Gas Assets

Because of the downturn in oil prices for more than a year, many independent oil and gas companies have been selling or contemplating selling their assets.

British Petroleum has acquired all of Devon Energy Corporation’s properties in the San Juan Basin, in New Mexico, and plans to take over operation of the 480 wells spread over 33,000 acres in early 2016. BP already holds 550,000 acres, with an average output of almost 100,000 barrels of oil per day in the San Juan Basin. The acquisition “highlights BP’s commitment to the San Juan Basin,” the company says. The purchase includes a section of federal lands in San Juan and Río Arriba counties.


New Mexico Uranium Mines Settlement

A now-shuttered subsidiary of Energy Future Holdings extracted uranium from four mines in McKinley County, New Mexico, in the 1970s and ’80s, near lands occupied by the Navajo tribe. A review of the sites by the U.S. Environmental Protection Agency (EPA) found uranium contamination still present decades later. The agency estimated the cost of the cleanup at $23 million.

As part of a settlement with the Justice Department, Energy Future Holdings, without admitting any fault, has agreed to pay $2 million to help the EPA clean up the now-closed mines. The deal is part of the company’s reorganization plan.


Groups Challenge Four Corners Power Plant Approval

On Dec. 21, regional and national conservation groups represented by the Western Environmental Law Center filed a notice of intent to sue the Office of Surface Mining, U.S. Fish and Wildlife Service and other federal agencies for approving continued operation of the 52-year-old Four Corners Power Plant and its sole coal source, the Navajo Mine. The groups contend that there are significant deficiencies in the government’s impact study of the power plant and mine. The Navajo Nation owns the mine and has been negotiating with the plant’s operator, Arizona Public Service, to buy a 7 percent stake in the plant.

The groups’ joint legal action is based on what they allege are coal toxins’ impacts to communities, the San Juan River Basin and its ecosystems and endangered species. “While the rest of the world is transitioning to alternative forms of energy, the Four Corners Power Plant continues to burn coal and will do so for the next 25 years,” said Colleen Cooley with Diné Citizens Against Ruining Our Environment. “Prolonging coal not only condemns our health and the water, air, and land around us; it undermines our community’s economic future. Even the former owner of the Navajo Mine, BHP Billiton, has exited many coal contracts across the globe because coal is no longer economically feasible.”

Mercury is the top cause of water-quality impairment in New Mexico lakes and reservoirs,” said Rachel Conn, interim executive director for Amigos Bravos. “Over 60,000 acres of New Mexico’s lakes and reservoirs are polluted with mercury. It is unacceptable that in over half of the state’s lakes and reservoirs, New Mexicans can no longer fish without worrying about poisoning their families.”


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