Have They Lost Their Mind?

An article on Tuesday in the Journal indicated that the City of Albuquerque is already projecting that they will be unable to meet their current financial obligations (subscription):

Albuquerque's system of public financing for campaigns could run out of money before surviving its first mayoral race.

Interim City Clerk Randy Autio estimates that the "Open and Ethical Elections" fund will contain about $1.4 million in April, when the first payments to candidates are expected. The election will be next fall.

Each person who opts into the voluntary system is supposed to get $1 per registered voter. In the mayoral race, that would add up to about $328,000, though the number of voters might grow before campaign season.

If at least five people choose public financing, there wouldn't be enough for the mayoral campaigns, let alone City Council candidates.

The city has been setting aside about one-tenth of 1 percent of its general fund budget to pay for the public campaign financing.

Amid a budget crunch at City Hall, councilors are debating what to do.

Which makes you wonder... How the heck, "amid a budget crunch," could they possibly be considering asking taxpayers to foot the bill to build an arena? (subscription):

City Hall could finance a $344 million events center and hotel complex by imposing a new one-eighth percent gross-receipts tax and by tapping revenue generated by the project — but it would need to find other money for related improvements.

And the city must also be willing to use its existing tax revenue as a "backstop" in case the new tax isn't enough to pay off the debt, according to a financial analysis by the firm Piper Jaffray.

City Hall would need to find separate funding for about $53 million in related improvements around the project's Downtown site, such as a canopy over the railroad tracks, plazas, road improvements and parking garages, the report said. City officials say the state government is one potential source for that money, plus some of the city roadwork would have to be done even if the project isn't built.

The financial overview by Piper Jaffray was presented to the City Council's finance committee this week. The full council will hear about it in a study session Thursday and in a presentation at Monday's regular City Council meeting.

Piper Jaffray was hired by the development team designing and studying the feasibility of a Downtown event center and hotel. The work of Piper Jaffray, along with all the other consultants, is being reviewed by an independent team with no stake in the project, according to the city Department of Municipal Development. RBC Capital Markets, for example, is reviewing the Piper Jaffray report.

The city hasn't decided whether to move forward with the project.

Am I missing something here? What's there to decide? The City of Albuquerque doesn't have money to cover current commitments. How in the world can it be considering adding more? Oh wait, that's right. "City officials say the state government is one potential source for that money." Only one problem with that logic. The state government coffers are running dry due to the rapidly declining prices of oil and gas.

Hello Albuquerque, Are You Paying Attention?

Almost exactly two years ago, I was pointing out that Albuquerque Mayor Marty Chavez had Arena Envy in a big way:

And yes, we did talk about Mayor Martin Chavez' desire to put $125 million of taxpayer money on the line to fix his Arena Envy problem. It seems the Mayor really wants to get a big one, no matter whose property rights he has to trample.

You would think that the reported financial problems of Rio Rancho's Santa Ana Star arena would have cured Mayor Chavez of pursuing his own arena dreams, but it seems, like many of the bad ideas proposed by this administration, it is put back on the table every two years:

The Star Center has been a costly undertaking for the city. Rio Rancho sold $36 million worth of bonds to build the $47 million, 6,500-seat center, and pledged gross receipts tax revenues to back the bonds.

At the time, Albuquerque was considering building a Downtown arena, but Rio Rancho beat its larger neighbor to the punch. Soon after Rio Rancho announced its arena plan, Albuquerque Mayor Martin Chávez said he was "pulling the plug" on its arena, saying taxpayers would likely have to back debt for the project.

Albuquerque is now reconsidering building its own 12,000-seat arena and 450-room hotel near the convention center downtown. The project is expected to cost $398 million.

Albuquerque city officials are expected to make a decision in six or seven months, after a feasibility study is completed.

So, explain something to me. If twenty four months ago, it made sense to pull the plug because taxpayers would have had to foot the bill, what would have changed now? After all, we have now learned from Rio Rancho not only will taxpayers have to back the debt (i.e. bonds), but in all likelihood, taxpayers will have to pay ongoing costs when the ill-conceived project under delivers the performance outlined in the feasibility project.

We've already seen new taxes being pushed to support the government's last greatest economic development ideas - spaceport and train. Do we really now want to pay more in taxes to pay for an arena as well? I'm thinking enough is enough. Until the government can pay for their last great idea without coming back to the "taxpayer bank," I don't think they should get to move ahead with any new "great ideas."

Where to Spend All the Money?

The legislative session is more than half over, and it is always amusing to see where our legislators think our tax dollars should be spent:

AN ACT MAKING AN APPROPRIATION FOR SCHOOL STUDENTS TO ATTEND SEMIPROFESSIONAL BASKETBALL GAMES. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. APPROPRIATION.--One hundred thousand dollars ($100,000) is appropriated from the general fund to the public education department for expenditure in fiscal year 2008 to purchase and distribute tickets to school students for semiprofessional basketball games. Any unexpended or unencumbered balance remaining at the end of fiscal year 2008 shall revert to the general fund.

I like a good basketball game as much as the next guy, but isn't this a little silly? Exactly who asked for this legislation, Tingley Colosseum, Albuquerque ThunderbirdIs, or the schools. And Mayor Martin Chavez wants to build an arena where and for how much? I wonder how much we'll have to appropriate to send school children to that arena.