ITES: Reports of Jobs & Corruption

This is the ninth entry in “It’s the Economy, Stupid” a 15-part series analyzing the local economic news in five swing states.

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With colleges in the midst of the spring break season, seniors will be returning to campus with added anxiety about the real world that is now just around the bend. Fortunately, the most recent state report from the Bureau of Labor Statistics (BLS)—issued on March 13^th, gives some reason for optimism with lower unemployment rates across all but one of the five swing states. This entry will delve into those numbers to better gauge that optimism. It too will consider the State Integrity Investigation report released this week, and its implications for the buzz-phrase of waste, fraud, and abuse.

On the surface, declining unemployment rates would appear to signal coming relief. Unfortunately, the BLS lags in reporting data, with current numbers only providing a picture from last January. Rising gasoline prices may already be taking their toll on the recovery that appeared to be strengthening just a couple months ago. With that in mind, the most recent ranking of the five states in order from lowest unemployment to highest is: New Mexico (7%), Pennsylvania (7.6%), Ohio (7.7%), Colorado (7.8%), and Florida (9.6%). Only Florida remains above the national rate—which was steady at 8.3% through February, and New Mexico manages the lowest rate despite it having held constant from December.

New Mexico is alone too with regard to labor force change, as it was the only state to witness a growth in its labor force and employment over December to January—although its number of unemployed remained constant. All others experienced a contraction in their labor force, which invariably played a role in their declining unemployment rates. Of those four remaining states, only two experienced a growth in overall employment that was larger than the contraction of their labor forces—Ohio and Florida. The employment growth in the former accounted for 87% and in the latter for 78% of the decline in unemployment, respectively. Total employment accounted for less than half the decline in unemployment in Pennsylvania, while total employment declined in Colorado.

Considering those numbers, the labor markets of Florida and Ohio appear to making better strides than their respective 5^th and 3^rd place rankings would suggest. Pennsylvania ranks ahead of Ohio with regard to its overall unemployment rate, but the change in the Keystone State came largely from workers leaving the labor force. Colorado ranks ahead of Florida, but the change in the former came on the heels of a shrinking labor force and falling total employment. Still, different measures can further complicate the rankings.

Three states experienced improved employment growth rates for a majority of the 11 non-farm industries tracked by BLS—New Mexico (7/11), Ohio and Colorado (8/11). The changes were not in the smallest industries of those states either, with at least three of their five-largest improving. Pennsylvania had five industries improve—including manufacturing of its top-five, while Florida had slowing growth in all eleven. State and local governments continued to cut employment, with all five states seeing that industry continue to have an annualized, negative growth rate. For all its other sunny news, New Mexico was the only state with a majority of industries experiencing such negative growth, and the clouds continue to gather over that state when it comes to ethics.

The State Integrity Investigation was released last Monday, and was produced by the Center for Public Integrity, Global Integrity, and Public Radio International. All three organizations espouse nonpartisan ideals, with the former two operating as nonprofit, investigative journalism outfits. The report rated all fifty states—but not the District of Columbia, on an A-F scale according to fourteen criteria, which included: Internal Auditing, Political Financing, State Budget Process, and Procurement. The ratings ascribed to those four categories are of particular relevance to state government spending, especially during a period of austerity. No state scored pristine marks, with New Jersey managing the best rating, a B-plus of 87%; and Georgia the worst, flunking with a 49%.

In order from most to least open to corruption is New Mexico (D-minus, 62%), Ohio (D, 66%), Colorado (D-plus, 67%), and Pennsylvania and Florida (C-minus, 71%). Of the four categories listed above, Political Financing was the worst for each state—ranging from an F to a C. Each state scored well for internal auditing—ranging from B-minus to A. Pennsylvania was the only state to fail in any category, and did so twice—Political Financing, and perhaps most troubling in its Budget Process.

The report noted a “culture of intolerance to openness” of records and proceedings that pervades that the Keystone State. “Pay-to-play” bribery schemes and gaps in enforcement were the most common reasons for low scores across the five states, and despite New Mexico’s score, the report’s authors were optimistic that reforms pushed by current Gov. Martinez (R) could promote significant improvements. Negative press of this type will not help the five states as they continue to wrestle with difficult budget decisions that could see critical services cut and valuable professionals laid-off.

STATE CLIPS:

Pennsylvania: “New Figures on Shale Gas Optimistic” Pittsburgh Tribune-Review, March 20^th

Uncertainty lingers regarding the scale of the Marcellus Shale natural gas deposit despite a research conference held at Penn State. Newly unveiled reports by energy consultants ICF International and IHS Inc. estimate that the formation could contain as much as 698 trillion cubic feet of natural gas. That figure is in stark contrast to the Department of Energy and U.S. Geological Survey which place the number at 141 and 84 trillion cubic feet, respectively. The differences matter as long-term policy-making will rely heavily on the prospects of future exploration.

Florida: “Giant Tunnel Machine Nearing another Milestone at Port of Miami” South Florida Sun Sentinel, March 15^th

Significant work is underway at the Port of Miami, where a $1 billion and 4,200 foot underground tunnel is nearing the water’s edge. Once complete, the tunnel will provide for a multi-lane underground highway to enable trucks leaving the port to connect directly to area expressways instead of crossing through busy city streets. With annual revenues at the port close to $95 million, a more efficient ground transportation system could send its value much higher. Similar logic could apply to strained infrastructure throughout Florida and the rest of the country.

Colorado: “Vote against RTD Hybrid Deal was way to Ensure Discussion, Board Member Says” The Denver Post, March 21^st

Two board members voted against a plan that will create a hybrid commuter rail and Bus Rapid Transit link between Denver and Longmont. Had the vote been unanimous, the project could have been reviewed by the full board without discussion. The plan would use dedicated sales tax revenues approved of in a local referendum in 2004 to create the just under 40 mile transportation link. Without including the Bus Rapid Transit option, budget shortfalls would have prevented a commuter rail from being completed until 2042.

Ohio: “7 Areas Pool Electric Demand” The Cincinnati Enquirer, March 21^st

Residents of seven municipalities in Hamilton County will soon have an opportunity to save just more than one penny per kilowatt-hour of electricity. Although that sounds small, the combined savings could mean a 24% smaller annual electric bill for those who participate. The communities established the aggregation plan with DP&L Energy under provisions of Ohio’s electric deregulation law.

New Mexico: “City Officials Shield Audit of Police Department Spending” Santa Fe New Mexican, March 20^th

In a possible affirmation of New Mexico’s low ethics ranking, the Santa Fe city government has refused to release an audit of Police Department spending. Requests came from the Santa Fe Coalition for Good Government and the Santa Fe Police Officers Association—which is in the midst of mid-contract negotiations due to budget shortfalls. There may not be any actual malfeasance involved, as city officials have said that the document is still incomplete following the December retirement of the auditor tasked with its creation.

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