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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.