Pub. 11 2014 Issue 4

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S Winter • 2014 5 The 2014 Legislature gets underway on Tuesday, January 21, for 30 days. Every regular 30 day session is constitutionally restricted to: budgets, appropriations and revenue bills and bills drawn pursuant to special messages of the governor. We anticipate that the primary focus in 2014 will be enacting a balanced budget. It is estimated that the Legislature is looking at $292 million of new money (projected recurring revenue less this fiscal year’s recurring appropriations). Unfortunately, good news is often coupled with negative news, resulting in an economy that is moving in positive direction but at a sluggish rate. It is estimated that the NewMexico economy will add jobs at an average of 1.4 percent per year through the end of the 2018 forecast period. Approximately 92 percent of the new jobs are forecasted to be in the private sector, growing at an average of 1.7 percent per year. The balance is expected to be in the government sector, growing at an average rate of 0.5 percent per year. UNM’s Bureau of Business and Economic Research forecasts strength in the housing market, projecting permits in 2013 at 5,574 before reaching over 7,000 in 2014 and approximately 9,000 in 2015. Oil prices are expected to remain around $93 per barrel in fiscal year 14. Natural gas prices remained low in fiscal year 2013, largely due to supply increases resulting from technological improvement in production and strength in shale-based liquids. The Affordable Care Act poses uncertainly among businesses concerning premiums, coverage and process. As passed, the ACA began at 2,700 pages. It is estimated that by 2015 the final legislation will expand to 250,000 pages (including regulations). Effective January 2015, for calendar year plans, large employers must provide a minimum essential value and affordable health coverage to 95 percent of full-time employees and their depen- dents, or pay a penalty. In my view, there are more questions than answers. Hopefully, new regulations will assist us in nav- igating the new health care law. Stay tuned. And then there is Dodd-Frank. As we discussed on our legislative roadtrip, the regulations continue and so does the uncertainty. Each regulation seems more volumous than the next. For example, the recently promulgated “Volcker Rule” includes 1,000 pages of final rules and explanatory text. Good luck in wading through that treatise. We discussed with state legislators the need for banks to have available an expedited foreclosure process for abandoned resi- dential property. Clearly once abandoned, residences obsolesce and thefts occur. Getting property back on the market makes good financial sense. We also discussed the need for the legis - lators to revamp our state trust laws. NewMexico has a window of opportunity to grow the trust business in the state. Several states including South Dakota, Arizona and Colorado have made significant changes to their trust laws with very positive financial gains. We are also reviewing possible public funds collateral programs including CDARS and pooled collateral. Again, I want to thank all of the bankers and legislators who attended our recent state-wide events. We look forward to a prosperous and happy 2014. n