• The county budget: A balanced approach

    It became clear in December 2012 that our net county tax revenues for fiscal year (FY) 2013 would be about $9 million less than initially projected.
    We can make up half of that shortfall by economizing on county operations.
    The county has maintained reserves of 25% of yearly revenues, about $15 million, to deal with such problems.
    So why not go ahead with our original spending plans, and just dip into reserves for the other half of the shortage?
    The answer is that this is potentially not a single-year budget problem.
    Estimated revenues for the next few years are at best flat, so a substantial part of this year’s shortage is likely to continue.
    Going farther into reserves in coming years would put us at a serious disadvantage if revenues drop still further.
    Federal sequestration cuts, or a federal deficit-reduction deal that involves unknown spending cuts, are quite possible.
    The national security and science roles of LANL will not disappear, but we can’t assume that the Lab will be immune to the budget pressures on all parts of government.
    Some re-evaluation of our county’s spending priorities is clearly in order.
    In 2012, the county council made plans to spend $33 million over the next four years on eight new Capital Improvement Projects (CIPs).

  • Must-have insurance plans

    Many people adopt a “penny wise, pound foolish” mentality when it comes to buying insurance. When trying to lower expenses, some will drop or reduce needed coverage, gambling that they won’t become seriously ill, suffer a car accident or fall victim to a fire or other catastrophe. But all it takes is one serious uncovered (or under-covered) incident to potentially wipe you out financially.
    Here are insurance policies no household should be without:
    Medical. This is the most critical – and unfortunately, the most expensive – coverage you need. When comparing plans, consider:
    Are your doctors in their provider networks? If not, can you afford out-of-network charges – or are you willing to find new doctors?
    Are your medications covered under the plan’s drug formularies?
    Do they restrict specialized services you might need like maternity, mental health or weight reduction treatments?
    If you choose catastrophic coverage to lower premiums, can you afford the high deductible in case of an accident or major illness?
    Homeowner/renter. Faulty plumbing, theft and home-accident lawsuits are only a few catastrophes that could leave you without possessions or homeless. A few tips:

  • NM likes its permanent funds

     SANTA FE – New Mexico is very fortunate to have two large permanent funds socked away for a rainy day. In the eastern states most land is privately held. By the time the Western states were settled, the government was keeping large chunks for federal, state, county and municipal purposes.
    Much is desert land but much is good for grazing or has oil and minerals under it.The revenue from those lands goes into what is sommonly called the State Land Grant Permanent Fund. Each entity gets its share. Public schools get the revenue from sections 2 and 32 of each 36-acre township. Part of that money is then transferred to the aappropriation amounts for the various governmental units.
    These funds were helpful in getting schools started as the School for the Visually Handicapped and the Deaf Shool.
    Back in the early 1970s, New Mexico was experiencing a very healthy economic boom. Severance taxes from oil and gas companies were flowing in at record rates. The mines near towns such as Santa Rita, Carlsbad and Questa also were doing well.
    So the Legislature and Gov. Bruce King created a second permanent fund, which they named the Severance Tax Permanent Fund. Previously severance taxes were used to finance the budget. That fund began growing to a size approaching the original Land Grant Permanent Fund.

  • Seven percent tax stopping jobs

    In New Mexico, innovation is literally moving at the speed of light. Over the last several decades, laboratories, working with private industry, have led the way in developing new “directed energy” technologies. My own company, Fiore Industries, has built microwave systems that can disable the engine of a speeding car and neutralize Anthrax in packages. We’re turning science fiction into science fact.
    As directed energy technologies take off over the next two or three decades, New Mexico stands to create hundreds of new high-skill jobs and billions of dollars in new investment when the manufacturing starts.
    The only thing standing in the way of this enormous economic growth is New Mexico’s sales tax, which makes it too expensive for the government to award the contracts to local companies.  Known as a gross receipts tax, New Mexico’s sales tax adds a seven percent charge to all directed energy manufacturing.
    That’s unusual because states are technically forbidden from taxing the federal government directly. A gross receipts tax skates past this rule by taxing the contractor, not the government.
    I’ve seen the impact firsthand. Several years ago, my company won a contract to develop the early modeling for a new directed energy system.

  • County fiscal crisis is an opportunity

    “Never waste a good crisis” goes the saying. Sadly, it often takes a crisis to force overdue actions. The county budget shortfall is such an opportunity.

    The county government’s fiscal challenge is real. The revenue bubble it has enjoyed the six years since LANL started paying gross receipts taxes is deflating. Neither the lab’s mission nor its political support in Washington are as strong as they were for decades. The lab is not going away, but its size and strength are declining.

    Our failure to focus on diversifying our economic base means we are not replacing the meaningful jobs being lost at the lab or the income they produce — to the community and the county government.

    So far, the county government’s reaction to the “sudden” (actually, long-foreseeable and avoidable) crisis has been predictable. Council, trying to avoid hard decisions, hopes things will be better next year. Staff is understandably trying to avoid losing jobs and changes in business practices.

    Most “solutions” proposed are also predictable and generally more appropriate for a short term crunch than a long-term sea change, e.g., draw down reserves, reduce travel, postpone capital improvement and maintenance projects, and borrow more.

  • Eventually, it adds up

    Today’s column marks my 200th submission of “But I Digress” to The Los Alamos Monitor.  
    While this might seem an astonishing feat, it doesn’t take people who meet me long to recognize that my spouting off 200 opinions is anything but surprising.
     I was born with a speech defect and couldn’t talk until I was 11 years old.  After an operation on my throat corrected a windpipe abnormality - Presto!  I could talk!
    And I haven’t shut up since.
    Anyway, I asked my friends what I should write about to commemorate 200 rants.  I got some great suggestions, but ultimately my wife nailed it by saying I should just write about my one true passion.
    Yeah, of course.  Math.  What else?
    And what’s not to love?  The history of math reads like an epic saga of gladiatorial battles to conquer the universe of numbers.  It’s full of herculean efforts by early giants to understand the geometric symmetry and algebraic aesthetics of the world around us.
    Mathematics is harmony incarnate.  When early mathematicians saw amazing patterns in numbers (like the sum of cubes equaling the square of the sum of the numbers), they would say,
    “This can’t be a mere coincidence.  The gods are trying to tell us something!”

  • What the maple trade conveys

     Maple sugar season straddles six weeks in sugaring states when winter turns to spring. The business supplies ample food for thought.
     Harvest traditions evoke homey scenes: the crusty New Englander ... rock-ribbed, spare, silent ... tending his maple woods by one-horse sled. The sap is gathered by the pailful and hauled in vats to the sugar house, where steam rises from the maple sap boiling pans.
    Practiced eyes keep watch as the water boils off to turn some 40 gallons of sap into one gallon of the golden brown syrup. Fresh sap is up to 98% water.
    To sell to wider markets, the business has a few new twists.
    What has grown most is the extent of maple trade, not the annual production. The steps in producing and processing sap are the same as before. And the same as were learned from the Indians ages before that.
     Markets now are more diverse, which requires more knowledge and specification of the steps. Technology has evolved, but not the scale of technology.  
    Collection methods have progressed from catching drips in a pail to pulling sap with high-vacuum to tanks through networks of plastic tubing. More sap is collected with less tending.  
    Water removal designs have added reverse osmosis and heat recovery schemes. Water is removed using less fuel.

  • Maybe rainy day funds be used for education

    SANTA FE — The more things change, the more they stay the same. I was about to write that same introduction for my previous column about simplifying the state’s tax structure because it was a repeat of something I had tried to do 20 years earlier.
    This time the subject is a piece of the land grant permanent fund a group wants to use to improve New Mexico’s education system.
    Many of you remember that little ditty that took place soon after Gov. Bill Richardson took office.
    It was 10 years ago and Gov. Richardson had a huge amount of political capital. He had a big, bold legislative initiative and nearly all of it passed – much even on a bipartisan basis.
    Two of those items were constitutional amendments, which required a public vote at the next November’s election
    One of the bills was to take money out of the permanent to assist in improving public education. The other was to bring the state Department under the governor. It seemed logical since education is about half the state’s budget. And thus, the governor should have control of it.
    Gov. Richardson barnstormed the state campaigning for the two items. The transfer of the state Board of Education passed easily. Voters weren’t accustomed to spending their permanent fund monies. But with Richardson’s help. It passed too.

  • Licenses for illegal immigrants, plus shorter campaigns

    New Mexicans weary of the contretemps over illegal immigrants and drivers’ licenses, which has engulfed them since Susana Martinez hit the campaign trail back in 2010, were probably surprised to learn that a new law in Illinois permits immigrants without papers to apply for licenses in that state.
    So there are now four states that have such laws on their books: New Mexico, Utah, Washington and Illinois.
    Four states hardly a bandwagon makes, but with the almost decade-long blockade of anything smacking of immigration reform apparently coming to an end, a number of other states are also toying with the idea.
    California, with its huge illegal immigrant population, has long grappled with the problems of unlicensed drivers on its streets and roadways.
    Last month the Los Angeles Times reported on a recent study by the California Motor Vehicle Department that finds “Unlicensed drivers in California—the vast majority of whom are illegal immigrants—are nearly three times as likely to cause a fatal crash as licensed drivers.”

  • Knowledge of state's economy is vague

    Mythology provides the thread throughout discussions of New Mexico’s economy.
    By recently telling an Albuquerque real estate group (and no doubt many others) that we must “commit to diversifying our economy,” Gov. Susana Martinez also says our economy is not diversified.
    Another common line is that the federal government share of our economy depends on the decisions of some bureaucrat, one bureaucrat, that is, in Washington.
    The fear mongering desired image is that this one bureaucrat, sufficiently annoyed, could at a stroke close everything federal in the state.
    Early in her most recent Senate campaign, Heather Wilson explained the real world to me. For better or worse, it is nearly impossible to eliminate a government activity.
    Every activity has a constituency, she said. If you try to eliminate something, that constituency and all of its friends and relations appear from the woodwork to protest and delay. Nearly always the constituency wins.
    Three sets of numbers provide a vague idea of the structure of our economy and of what is happening. Emphasis on “vague.”