Thursday, July 30, 2020On The Econ Beat: NM Budget Fix Set To Get Feds Approval; New Cash Injection Up In Air, Bear Market In Permian Appears To Be Bottoming And Big Budget Increase In Making For NM Labs Democrats proposed nearly $1 trillion for the local governments confronting COVID-19 emergency costs and declining revenues during the stay-home shutdowns. Republicans offered no new money, preferring instead to give states flexibility to use an earlier $150 billion allotment as needed. While the state can breathe easier about that $750 million, the foundering of the Dem proposal to provide direct relief to cash-strapped states and cities for the next budget cycle is worrisome for New Mexico. The state is expected to have more budget shortfalls for the fiscal year starting July 2021 and the federal money would help. That extra $600 a week some 135,000 unemployed New Mexicans have been getting is ending this week. The Congress remains deadlocked on an extension. A plan to reduce the extra payments to $200 a week is circulating. Either way, the state's economy would take a big hit from the reduced stimulus. One positive: the bear market in the SE NM Permian Basin appears to be bottoming out. Oil is trading at around $41 a barrel, higher than the state was planning on. However, oil demand is expected to remain below 2019 levels. Perhaps to the chagrin of small government conservatives, federal dollars are taking an even bigger role in the state economy. Significant budget increases for Sandia and Los Alamos Labs are in the works starting Oct. 1. From Sen. Heinrich's office: Senator Heinrich supported full funding authorization for the NNSA’s nuclear weapons and security programs. For fiscal year 2021, the bill authorizes $2.6 billion for Sandia National Laboratories, an increase of $330 million over fiscal year 2020. For Los Alamos National Laboratory, the bill authorizes FY21 funding of $3.22 billion, up from $2.3 billion in fiscal year 2020. The money still has to be finalized but that is a towering increase of $1.25 billion that would soften the economic blow of the coronavirus, even as questions are raised about that Los Alamos increase.
That potential federal shock absorber comes as the Yelp Economic Average report reveals the devastation being wrought by the pandemic: The Yelp report found that from March 1 to July 10, at least 381 Albuquerque businesses closed-- 199 of those were permanent closures. And in Santa Fe, 88 business closures, 45 of those also permanent. . . The Yelp report also found that in the state, there were 687 total business closures, in which at least 355 of those were permanent closures. The NM Restaurant Association says at least 200 of those permanent closures were of restaurants. They have not released a list. This is the home of New Mexico politics. E-mail your news and comments. (newsguy@yahoo.com) Interested in reaching New Mexico's most informed audience? Advertise here.   (c)NM POLITICS WITH JOE MONAHAN 2020 |
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