bber is the recognized economic expert in providing ... · bber’s new mexico economic forecast is...

N E W ME X I C O ’S E C O N O MI C A N D B U D G E T O U T L O OKP R E PA R E D F O R N E W M E X I C O S C H O O L B O A R D A S S O C I AT I ON

J E F F M . M I T C H E L L , P H . DU N M B B E R D I R E C TO R

J E F F M @ U N M. E D UF E B R U A RY 0 9 , 2 0 1 8

BBER is the recognized economic expert in providing socioeconomic data and forecasting in New Mexico. With more than 70 years of experience, BBER’s research team provides economic forecasting as well as research

services and communication tools tailored to the needs of clients – public, private, nonprofit, and philanthropic –seeking to understand and shape public policy on the regional, state and local levels.

BBER’s services and research help leaders in New Mexico to identify and understand trends and changing economic markets across New Mexico in order to inform decision making.

Tax Cut and Jobs Act: Impact on New MexicoCuts largest and most sustained for corporations and high-income households.New Mexico is home to: zero Fortune 1000 companies1

46% of workforce at firms with >500 employees (43rd in rank). 2

4.1% of households earn >$200k per year (43rd in rank) 3

Likely deficits may result in cuts in Federal spending.New Mexico ranks: 3rd Federal Spending (% GSP) 4 11th Federal Retirement Benefits (% GSP) 4 17th Federal Non Retirement Benefits (% GSP) 4 3rd Federal Grants & Contracts (% GSP) 4

Limits on Property tax deductions will minimal impact.Impacts on state PIT, CIT likely minimal

1 Fortune 3 Census 2 BLS 4 Pew Trust

New Mexico Economic Current Situation

o QCEW says NM added 2,665 jobs (0.3%) in 2017Q2, reversing two quarters of small declines.

o CES shows gains of 0.7% (2017Q3) and 1.0% (2017Q4). Adjusting for prior over-estimates, FOR-UNM anticipates an average of 0.7% (5,850 jobs) for the two quarters. 2017 closes up 0.4% (3,475 jobs).

o Near complete reversal of 2015-16 patterns – jobs in mining (4.8%), construction (5.3%), professional and business services (3.5%). healthcare (0.5%), hospitality (0.3%) slow. Retail falls sharply (-2.2%). Government cuts deepen (-2,250 jobs, -1.2%).

o Labor force growth slightly stronger (0.7%), unemployment at 6.1%.

Gross Receipts Taxes by County: FY18 (Jul.-Nov.) v. FY17

-$10,000 $0 $10,000 $20,000 $30,000 $40,000 $50,000

VALENCIAUNIONUNCLASSIFIEDTORRANCETAOSSOCORROSIERRASANTA FESANDOVALSAN MIGUELSAN JUANROOSEVELTRIO ARRIBAQUAYOTEROMORAMCKINLEYLUNALOS ALAMOSLINCOLNLEAHIDALGOHARDINGGUADALUPEGRANTEDDYDONA ANADE BACACURRYCOLFAXCIBOLACHAVESCATRONBERNALILLO

-100% -50% 0% 50% 100%

BernalilloCatronChavesCibolaColfaxCurry

De BacaDona Ana

EddyGrant

GuadalupeHardingHidalgo

LeaLincoln

Los AlamosLuna

McKinleyMoraOteroQuay

Rio ArribaRooseveltSan Juan

San MiguelSandovalSanta Fe

SierraSocorro

TaosTorrance

UnclassifiedUnion

Valencia

Source: NM Taxation and Revenue Department

Gross Receipts Taxes by Industry: FY18 (Jul.-Nov.) v. FY17

-$20,000 $0 $20,000 $40,000 $60,000

Unclassified

Other Services

Leisure & Hospitality

Educational & Health Services

Financial Activities

Prof & Business Services

Information

Trade, Transp, Utilities

Manufacturing

Construction

Mining

Agriculture

-50% 0% 50% 100% 150%

Source: NM Taxation and Revenue Department

Drill Rig County, Oil Production with WTI Prices

0

20

40

60

80

100

120

0

50

100

150

200

250

300

2011 2012 2013 2014 2015 2016 2017 2018

Drill

Rig

s & W

TI P

rice/

Barr

el

Prod

uctio

n In

dex

Oil Production Index Drill Rigs (Right) WTI Price (Right)

Source: EIA, Baker Hughes, ONGARD, IHS Global Insight

State General Revenues by Category, FY1991-FY2017

Source: NM Legislative Finance Committee

Gross Receipts

34%

Selective8%

Personal Income

22%

Corporate Income 5%

Rents and Royalties

8% Severance Taxes

7%

License Fees 1%

Investments12%

Tribal 1%

Misc 2% Gross Receipts

16%Selective4%

Personal Income

13%

Corporate Income

13%

Other 1%

Rents and Royalties

18%

Severance Taxes 16%

Investments5%

Tribal 1%Misc 12%

Share of Revenues Share of Variation

State General Fund Appropriations by Category, FY91-FY17

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Total Appropriations (Right) K-12 Public Educ

Health, Hospitals & Human Services Higher Education

OtherSource: NM Legislative Finance Committee

Total Value of Permanent Funds and K-12 Appropriations

$0

$5,000

$10,000

$15,000

$20,000

$25,000

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Permanent Funds (Right) K-12 Public Educ

Source: NM SIC, LFC

Permanent Funds by State, Total and Per Capita

$0 $10 $20 $30 $40 $50 $60

Louisiana

Utah

Alabama

North Dakota

Wyoming

New Mexico

Alaska

Texas

Total, Billions $

$0 $4,000 $8,000 $12,000

Per Capita

Source: SWFI, UNM BBER

New Mexico Economic Outlook: 2017-2022

o Forecast 8,450 jobs (1.0%) in 2018; 9,875 jobs (1.2%) in 2019; and average 8,675 jobs (1.0%) after.

o Forecast slightly stronger in near-term, but unchanged longer-term – reflecting impacts of December job gains.

o Income forecast marked down further – 2.7% in 2018, average 4.2% in 2019-2022. This forecast marked down -0.8% in 2018 and -0.3% 2019-2022 due to weaker jobs forecast, lower investment/proprietors’ incomes (from IHS Global Insight) and very weak transfers.

o Little reason to expect turn-around in residential construction.

o Oil production to increase gradually, given slightly weaker price outlook.

o Impacts of pessimistic (20%) greater than optimistic (15%) scenario.

US Employment Forecast

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

January 2018 October 2017Source: Global Insight, January 2018 and October 2017

NM Employment Forecast

-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

January 2018 October 2017

Source: BBER, FOR-UNM Quarterly Forecast, January 2018 and October 2017

Job Growth by Sector

(1,000) 0 1,000 2,000 3,000

Fed. Govt. State Govt. Local Govt.

Accom. & Food Svs.Arts & RecreationHealthcare & Soc. Asst.Educ. Svs.Admin. & Waste Mgmt.Prof.& Tech. Svs.Real Estate & LeasingFinance & InsuranceInformationTransport. & Warehsng.Retail TradeWholesale TradeManufacturingConstructionMining

-2% 0% 2% 4%

Source: BBER FOR-UNM Quarterly Forecast, January 2018

Annual Job Growth by Sector, 2019-2022

(2,000) 0 2,000 4,000 6,000 8,000 10,000 12,000

Fed. Govt. State Govt. Local Govt.

Accom. & Food Svs.Arts & RecreationHealthcare & Soc. Asst.Educ. Svs.Admin. & Waste Mgmt.Prof.& Tech. Svs.Real Estate & LeasingFinance & InsuranceInformationTransport. & Warehsng.Retail TradeWholesale TradeManufacturingConstructionMining

-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%


Employment Gains/Losses by Region, 2017-2022


NM Income Forecast

-4%

-2%

0%

2%

4%

6%

8%

10%

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

January 2018 October 2017


NM Employment Forecast, Alternative Scenarios

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2015 2016 2017 2018 2019 2020 2021

Baseline Scenario Pessimistic Scenario Optimistic Scenario


General Fund Consensus Revenue Estimates, Dec. 2017

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

FY17 FY18 FY19 FY20 FY21 FY22

Mill

ions

$

Sales Taxes Selective SalesPersonal Income Tax Corporate Income TaxLicense Fees Total InterestSeverance Taxes, Rents, Royalties Tribal Revenue Sharing


ECONOMIC FORECAST DATA DASHBOARDS RESEARCH DATA BANK

FOR-UNM Economic ForecastBBER’s New Mexico economic forecast is used to guide decision making and budget planning processes.

o Used by NM’s State government for revenue projections.

o Covers employment, income, education services, and industry-specific indicators.

o Provides national, regional and metropolitan levels of detail.

o Quarterly meetings with opportunities to engage with private and public sector leaders.

o Forecast and analysis narrative and electronic data access.

o Subscription level options.

Employment Projections by Industry

State Funding Appropriations

Presenter

Presentation Notes

FOR-UNM economic forecast is a tool for decision makers in the public sector to understand economic trends in NM. FOR-UNM should be used to guide future decision making and budget planning processes. The forecast is a quarterly tiered-subscription service which projects numerous economic variables for the state as a whole as well as for each of the 4 major metro areas. Subscribers receive economic forecasts, analysis of the US, NM and regional trends and are invited to participate in quarterly forecast meetings.

Education

Population by Ethnicity

Median Age

Population Counts/Projections

BBER’s Data Dashboards tell your story.

o Customized

o Up-to-date

o Reliable

o Documented

o Informative

o Web-based subscription

Data Dashboards

Presenter

Presentation Notes

Government agencies can use Data Dashboards to visually communicate complicated current indicators of a specific place or industry with their citizens in order to keep them informed of what is going on in their communities. The service is an annual subscription that is a customized package to the subscriber’s needs. Subscribers to the Data Dashboard service receive customizable web-based data visualization snapshots of their specific needs in a visual graphic format, along with constant maintenance and updates to the dashboards and/or access to a customized database.

ResearchBBER’s Research applies an understanding of global and national trends to address the needs New Mexico.

o Backed by UNM’s research resources.

o Authoritative, objective and non-partisan.

o Supports decision-making.

o PhD and Masters level researchers who know New Mexico’s institutions and history.

Mill Levy Rates and School Enrollment

State Determinants of state funding level Min MaxArizona fixed Guaranteed $ amount per student. If local tax base

insufficient to fund, balance is provided by state.Colorado variable Assessed property value

Median household incomeEnrollmentMill levyPercent of students eligible for free/reduced-cost lunchBond election effort & success over last 10 yrsRemaining available bonding capacityUnreserved fund balance (charter schools only)Annual budget (charter schools only)

Nevada noneTexas variable Property value

EnrollmentAnnual debt service

Utah variable Property tax yieldEnrollment

State funding levelState Funding (fixed/variable)

Capital Outlay Funding in Other States

Presenter

Presentation Notes

BBER has the expertise to understand the big picture economic indicators and trends affecting the US economy and NM’s economy. In turn BBER can apply this knowledge to tailored and detailed research for how it matters to individual cities, towns, counties and organizations http://bber.unm.edu/mill-levy-map

http://bber.unm.edu/mill-levy-map

Data BankBBER’s Data Bank supports New Mexico Economic Forecast (FOR-UNM), Data Dashboard and Research services.

o New Mexico’s lead agency for U.S. Census Bureau’s State Data Center Program.

o Data Bank knows where data comes from, what it means and where it can go wrong.

o State of art technology to collect, manage and disseminate accurate data.

Methods of Transportation

Crime Statistics

Presenter

Presentation Notes

BBER’s 3 main services are backed by the BBER DATA BANK. BBER has developed sophisticated technology to collect and identify accurate data as well as process, format and maintain large data sets. This ability to curate data is unlike any other data service in New Mexico. BBER has the ability to layer many types of data over each other to analyze and forecast trends and relationships between economic factors based on locations. This data is collected and stored electronically though the Data Bank which also serves as an agency for New Mexico in the US Census Bureau’s State Data Center program. The Data Bank houses a digital and hard-copy reference library collection dating back to the 1930’s.

Issues We TrackEconomic Development

Public Finance

Income

Population Projections

Tax Districts

Housing Permits and Land Use

Transportation

Arts and Culture Industries

Demography and Migration

Workforce Needs

Data Curation

Survey Research

Economic Forecasting

Economic Impact Analysis

Fiscal Impact Analysis

Feasibility Analysis

Cost-Benefit Analysis

Market Research

Labor Market Research

Program Evaluation

Additional Services

Presenter

Presentation Notes

We keep our eyes on a variety of industries and have the ability to layer findings from various industries over one another to track trends in great detail

“Trustworthy, unbiased market research based on accurate data and analytics is the only way for business owners to see where they’re going. New Mexico is fortunate to have the University of New Mexico Bureau of Business and Economic Research or BBER.”

-Santa Fe New Mexican

“BBER is the most credible and independent source of economic data and analysis in New Mexico. Our company has a membership with BBER so that we have limitless access to information that analyses the current state of the economy in or state such that we can make informed business decision on where to focus our attention and manage our business.”

-Norm Becker, President + CEO, New Mexico Mutual

“BBER was really helpful and knowledgeable in working with the City of Santa Fe to create a data dashboard that appears on the city’s home page. If you’re a proponent of transparency and believe key data should be available to everyone, a data dashboard is the way to go. BBER has the tools and know-how to get it done.”

-Reed Liming, Division Director, Long Range Planning,

City of Santa Fe

“UNM-BBER has been an invaluable partner with New Mexico MainStreet and Arts & Cultural District organizations. They set a firm economic foundation from which our affiliated communities can transform their local economy and the priority economic development project for implementation to move their vision to reality.”

-Rich Williams, Director, New Mexico MainStreet

CONTACT US TODAY

WEBSITE: WWW.BBER.UNM.EDU

PHONE: 505.277.8300

EMAIL: [email protected]

SOCAIL MEDIA: @UNMBBER

bber is the recognized economic expert in providing ... · bber’s new mexico economic forecast is...

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