City Hall Needs To Get Serious About Economic Development

The Bureau of Business and Economic Research (BBER) at the University of New Mexico (UNM) did a report on Albuquerque’s economy and outlook.

BBER used local statistics and national forecasts of our state and local economy to come up with a job history and job projections.

A portion of the University’s BBER 2016 report and forecasting model is contained in a section of the City of Albuquerque’s 2018 Proposed Budget for Fiscal Year 2017-2018.

(See City of Albuquerque “Proposed Budget Fiscal Year 2018, pages 46, 47, 48, 49 at

Following is the section contained in the 2017-2018 City of Albuquerque proposed budget:

“The Albuquerque economy declined in sync with the national economy, but has lagged in its recovery.

Total employment in the Metropolitan Statistical Area (MSA) increased in the third quarter of 2012 but this gain was due to a change in processing by the department of Workforce Solutions and not in actual employment.

The 4th quarter of 2014 and all following quarters through the 1st quarter of 2016 show increases with growth.

The UNM BBER forecast of employment in October 2016, has positive non-agricultural (non-ag) employment growth beginning in FY/13, though as mentioned above, FY/13 is due only to a technical adjustment.

The growth in total employment in FY/14 was 0.4% and FY/15 growth in total employment was 1.4% and with one estimated quarter FY/16 is expected at 1.7%.

The Albuquerque economy lost over 27 thousand jobs from FY/08 to FY/12 a loss of 7% of total employment.

About 13 thousand jobs were added in FY/13 to FY/16.

In FY/17 employment is expected to increase 1.5% and remain near this level for the remainder of the forecast.

The economy does not approach FY/08 employment levels until FY/19.

This puts the Albuquerque recovery over four years behind the national economy in terms of reaching post-recession employment levels.

Government employment limits growth, with private sector employment growth exceeding total employment growth from FY/12 through FY/21.

Construction has improved and is now helping the economy.

The unemployment rate continues to decline, but some of this is due to discouraged workers leaving the labor force.

In calendar year 2015 there was somewhat a reversal of this with a small increase in the unemployment rate caused in part by people re-entering the labor force.

The [unemployment] rate is expected to slowly decline to 5.3% in FY/20 and FY/21.

This is above the unemployment rate for the U.S. for the entire forecast period.”


The BBER study also discussed the following nine (9) major Albuquerque industries or economy sectors:

1. Retail and Wholesale Trade
2. Transportation, Warehousing and Utilities
3. Manufacturing
4. Education and Health Services
5. Accommodation and Food Services
6. Real Estate & Financial Activities
7. Professional and Other Services
8. Information
9. Government

Following is information provided on each industry or sector:


“These sectors [retail and wholesale trade] account for about 15% of employment in [Albuquerque’s Metropolitan Statistical Area]. It is a particularly important sector in terms of the Gross Receipts Tax (GRT); making up about 30% of GRT. As the recession hit, the closure of stores and reductions in purchases substantially hit employment and GRT in this sector. The sector is expected to have employment growth of just over 0.8% in FY/17 and FY/18 with a jump to over 1.5% in FY/19 and tailing off for the remainder of the forecast.”


“This sector while important, only accounts for 2.5% of employment. Employment growth in this sector was weak before the recession hit and then declined substantially in FY/09 and FY/10. The expectations for the forecast are a robust recovery with growth over 2% in FY/17 following a decline of 0.6% in FY/16. With this growth, the sector does not reach the pre-recession high in the forecast period.”


“This sector accounts for about 4.5% of employment in the [Albuquerque’s Metropolitan Statistical Area]. It is an important sector as it creates relatively high paying jobs that bring revenue from outside the area. (Emphasis added.) It also generates purchases of materials and services in the local economy making this sector’s impact greater than its employment share. After substantial job losses including closing of Eclipse Aviation and GE, the sector posted small gains in FY11 and FY/12. In FY/13, FY/14 and FY/15 the sector declined and is expected to post a small increase in FY/16 and FY/17 before suffering losses in the remainder of the forecast. FY/21 employment is only 72% of the employment of FY/08.”


“This sector is predominantly health services and accounts for 15.7% of employment. Albuquerque is a major regional medical center that brings people into the area for services. Presbyterian Hospital and its HMO are one of the largest employers in the area. This was the only sector that increased through the recession and continues to be a primary driver for economic growth. Growth slowed in FY/14 but increased in FY/15 and is expected to reach 4% in FY/16. Growth stays above 3% in all years but FY/21 where it slows to 2.9%. This sector is the largest contributor to employment growth in the forecast period adding about 10,000 jobs (36.6% of total job growth) from FY/16 to FY/21.” (Emphasis added.)”


“This category includes eating and drinking establishments as well as hotels and other travel related facilities. It accounts for 10% of employment in [Albuquerque’s Metropolitan Statistical Area]. The sector is a major contributor to both [Gross Receipts Tax] and Lodgers’ Tax. FY/14 and FY/15 had growth of over 3%. This slowed in FY/16 to near 2% and after increasing to over 2.5% in FY17 remains below 2% for the remainder of the forecast. The sector reached its previous peak of FY/08 in FY/14.”


“This is two sectors and includes finance, insurance and real estate including credit inter mediation. It accounts for about 4.5% of employment in the [Albuquerque’s Metropolitan Statistical Area]. The financial crisis, the consolidation of banking, and the collapse of real estate impacted this sector. FY/13 shows an increase of 1% with FY/14 increasing 1.8%. Growth tapers off through the remainder of the forecast. In FY/21 the sector remains 367 jobs below the level of FY/08.


“This category is a grouping of four service sectors (Professional and Technical, Management of Companies, Administrative and Waste Services, and Other Services). The category accounts for 18% of the employment in … [Albuquerque’s Metropolitan Statistical Area]. It includes temporary employment agencies, some of Albuquerque’s back-office operations, and architect and engineering firms that are closely tied to construction. It also includes Sandia National Labs (SNL). While the national labs gained some positions in FY/11 through FY/15, the sector as a whole was weak. This began to change in FY/15 as construction services (engineering and architecture) began adding jobs, though the sector as a whole declined. The sector shows expected growth in FY/16 of less than 1%. Growth then exceeds 1% every year in the remainder of the forecast with a peak growth of 2.6% in FY/18. In FY/21 it still remains 3,300 jobs below the peak of FY/08.”


“This sector includes businesses in telecommunications, broadcasting, publishing and internet service establishments. It also includes the film studios. It accounts for about 2% of employment in … [Albuquerque’s Metropolitan Statistical Area]. FY/13 posted solid growth, but FY/14 showed a substantial decline and FY/15 declined again. FY/16 is expected to show growth of over 3%, but slows to under 1% growth until FY/21.”


“Construction is typically cyclical, with significant swings in building and employment. Construction is an important sector and has an impact on the economy larger than its employment share of 5%. This sector lost 12 thousand jobs from FY/07 to FY/13. In FY/07 its employment share was 8%. After falling consistently from FY/07, employment in construction began increasing at the end of FY/13. FY/14 grew 2.8% and 2.4% in FY/15. Employment is expected to increase only 1.2% in FY/16, but then increases to near 3% in FY/17 and remains in the 2% to 3% range for the remainder of the forecast.It is one of the fastest growing sectors in the economy for the forecast period. Even with this growth construction employment in FY/21 is forecast to be 26% or 8,000 jobs below the FY/07 peak.”


“The government sector makes up almost 21% of the Albuquerque’s Metropolitan Statistical Area employment. The largest part of State and Local government is education. Local Government includes the public schools and State Government includes the University of New Mexico and Central New Mexico Community College. The local sector also includes Indian enterprises.

The Federal Government makes up 4.4% of employment; nationally Federal government makes up 3.4% of total employment. This doesn’t include military employment which is counted separately. Active military is around 6,000 or about 1.7% of the total non-agricultural employment. Nationally military is 1% of total non-agricultural employment. Government employment slowed and decreased in FY/11 through FY/16.

Local and State employment decreased due to declines in tax revenue and the inability to fund the same level of employees. State and Local are flat in FY/13. State government has been stronger with growth of 2.4% and 11.3% in FY/14 and FY/15. It is expected to grow 4.2% and then decline or remain at low levels of growth for the forecast. Local government has been flat and is expected to show little growth in the forecast. The major sources of state and local jobs are education, though the Labor department does not keep individual counts for these jobs at the local level.

Federal Government after growing strongly in FY/10 showed little growth in FY/11 and declines in FY/12 through the remainder of the forecast. This occurs due to the federal government taking steps to reduce its expenditures. The forecast shows continued losses in federal jobs except in FY/19 to FY/21 largely due to hiring for the 2020 census.”


The City has a total operating revenue and budget of approximately $955.3 million for fiscal year 2018.

Gross receipts tax makes up for 64% of the City’s general fund revenues.

29% of all city appropriations goes to public safety (police, fire, 911, emergency operations center, ect.) and 20% goes to infrastructure (street system, water and sewer system, ect.) for a combined total of 49% of all city expenditures.

The remaining 51% of city expenditures goes to providing all other essential and government services involving some 23 other city departments.

The various departments and expenditures include the Mayor’s office, city council services, the 311 call center, the city attorney’s office, the risk management department, finance and administration, cultural services and affairs, family and community services, social services to the poor and homeless, transportation or mass transit services (bus), the human resources department, the city clerk’s office and maintaining government facilities such as our parks, the Bio Park including the zoo and aquarium, libraries, senior citizen centers, just to mention a few, and salaries and benefits for city employees.

The City of Albuquerque does have an Economic Development Department and its mission is “develop a more diversified and vital economy through the expansion and retention of businesses; develop appropriate industry clusters and recruit target industries; and assist new business start-ups, and promote the film and music industries.”

“The Economic Development Department supports the tourism and hospitality industries through collaboration and oversight of the City’s contractors. The department also fosters international trade efforts and increased international business opportunities for Albuquerque companies.”

The question that needs to be asked is if city hall is serious or even committed to economic development and diversifying our economy?

The answer appears to be no based on the resources allocated.

The fiscal year 2018 proposed budget for the Economic Development Department was $3.6 million, a decrease of 24.1% from the fiscal year 2017 original budget and employs nine (9) full time employees which does not sound like much for an effective economic development plan for diversifying the Albuquerque economy.

During the last eight (8) years, Albuquerque’s Economic Development Department has not convinced nor attracted a single major corporation or business to relocate to Albuquerque.

During the last eight (8) years, the City has paid out $61 million dollars in taxpayer money to settled police misconduct cases, deadly force cases and excessive use of force cases.

Can you image if the $61 million in settlement money could have been available for economic development or even social services?


When you look at Bureau of Business and Economic Research study it does not look like Albuquerque’s economy is going to turn around any time soon.

During the last eight (8) years, city hall has not made much progress in diversifying our economy.

Albuquerque can and must expand and find better ways to use financial incentives for economic development such as tax increment districts (TIDS), industrial revenue bonds, and even fund economic development investment programs such as initial startup funding with claw back provisions.

Albuquerque needs to pursue with a vengeance real growth industries such as the retail and wholesale trade, education and health care, professional services, technology transfer, transportation and manufacturing, and the film industry to diversify our economy.

Public-private partnerships in the growth industries where ever possible should be encouraged and developed.

Special emphasis and support should be given to Albuquerque’s film industry which is developing, expanding and proving to be very successful in providing well-paying jobs.

Albuquerque’s taxpayers must be convinced by its leaders of the importance of investing in major projects and in our neighborhoods to make Albuquerque more of a “walk able” City, where people can raise their family, work and make a living and have recreational and entertainment opportunities all within a small radius thereby reducing our reliance on the automobile.

A well designed, efficient mass transportation system is a basic essential service that must be provided by a growing City to its citizens.

Any mass transportation system that is developed must truly serve the entire community and not just a small geographic area such as is the poorly designed ART bus project which is destroying historic Route 66.

More community centers with recreational facilities would be a good start achieving a walk able city.

The City of Albuquerque needs to partner more with the State of New Mexico wherever possible.

A good first start in partnering with the State is to find a new vision for the State Fair grounds and how that very valuable gem in the center of Albuquerque can be better utilized to serve the Albuquerque community.

A suggestion would be for the City and State to jointly fund a tear down the old Tingly Coliseum and construct a multipurpose, state of the art facility that could be used for entertainment and sports events and operated year-round with a joint powers agreement.

Other joint powers agreements can be entered into between the City, State and County for the mutual use of facilities.


Our political, business and civic leaders need to show far more backbone and commitment to improving and diversifying Albuquerque’s economy.

Otherwise, we are destined to become a dying, dusty southwest city without any real potential for growth and better economic times.

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Pete Dinelli was born and raised in Albuquerque, New Mexico. He is of Italian and Hispanic descent. He is a 1970 graduate of Del Norte High School, a 1974 graduate of Eastern New Mexico University with a Bachelor's Degree in Business Administration and a 1977 graduate of St. Mary's School of Law, San Antonio, Texas. Pete has a 40 year history of community involvement and service as an elected and appointed official and as a practicing attorney in Albuquerque. Pete and his wife Betty Case Dinelli have been married since 1984 and they have two adult sons, Mark, who is an attorney and George, who is an Emergency Medical Technician (EMT). Pete has been a licensed New Mexico attorney since 1978. Pete has over 27 years of municipal and state government service. Pete’s service to Albuquerque has been extensive. He has been an elected Albuquerque City Councilor, serving as Vice President. He has served as a Worker’s Compensation Judge with Statewide jurisdiction. Pete has been a prosecutor for 15 years and has served as a Bernalillo County Chief Deputy District Attorney, as an Assistant Attorney General and Assistant District Attorney and as a Deputy City Attorney. For eight years, Pete was employed with the City of Albuquerque both as a Deputy City Attorney and Chief Public Safety Officer overseeing the city departments of police, fire, 911 emergency call center and the emergency operations center. While with the City of Albuquerque Legal Department, Pete served as Director of the Safe City Strike Force and Interim Director of the 911 Emergency Operations Center. Pete’s community involvement includes being a past President of the Albuquerque Kiwanis Club, past President of the Our Lady of Fatima School Board, and Board of Directors of the Albuquerque Museum Foundation.