— Lee Reynis, UNM Bureau of Business and Economic Research
While the data don’t point to any one particular problem as the cause of Albuquerque’s stagnant economy, last week the University of New Mexico’s first economic summit put a laser focus on a major contributing factor:
Dependence on federal funding.
A change is needed in great part because said federal funding is threatened by the weight of red ink from entitlements and spending. Over the years that funding has been leveraged and morphed into an unsustainable economic model. Case in point: Federal civilian employment in New Mexico fell 5 percent year-over-year in the second quarter of 2012.
But the negative economic multiplier is that in addition to the direct job losses, when the Air Force is reducing its literal footprint by 20 percent, national labs are trimming the amount spent on technical consultants and construction matching funds are scarce, it affects not only federal employees but also private-sector workers who partner with them on everything from their government contracts to their home building and retail and service purchases.
So it’s not surprising that Bernalillo County lost 2,700 jobs between the first quarters of 2011 and 2012, 42 percent of them in the private sector.
The UNM summit — which brought together top political leaders, academics, scientists, professionals and businesspeople — recommended diversification and collaboration instead of the passive dependence of one sector on another. President Robert Frank says it was “an extraordinary group of people who all recognize the need to reach out to one another to build New Mexico’s economy.”
For that to work — no mean feat — all economic stakeholders need to first understand New Mexico has had it backward for years. In a vibrant economy the public sector is fiscally dependent on the private. We need to move in that direction while taking full advantage of the many federal resources we do have.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.