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F I S C A L I M P A C T R E P O R T

SPONSOR Lujan, A

DATE TYPED 3/12/2005 HB HJM 105/aHFL# 1

SHORT TITLE Data on Jobs Lost to Mechanization

SB

ANALYST Dunbar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

Minimal

See Narrative Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Labor (DOL)

NM Department of Agriculture (NMDA)

SUMMARY

Synopsis of HFL Amendment # 1

House Floor Amendment # 1 removes language referencing the North American Free Trade

Agreement and its effect on the New Mexico chili crop and NM agricultural workers employ-

ment opportunities.

Synopsis of Original Bill

House Joint Memorial 105 requests the New Mexico Department of Agriculture (NMDA) to col-

lect data on the number of agricultural workers who lose jobs due to use of newly developed ag-

ricultural machinery and technology; it also asks NMDA to provide information to the Depart-

ment of Labor regarding the collected information and statistics so the Department of Labor can

provide targeted retraining and other services for agricultural workers who lose jobs as a result of

technology advances and newly developed agricultural equipment.

Significant Issues

The study of agricultural employment issues has historically been complicated by the lack of suffi-

House Joint Memorial Bill 105/aHFL # 1 Page 2

cient employment data combined with the demographic data that also lack necessary detail. The

Economic Research & Analysis Bureau within the State Department of Labor collects employ-

ment and wage data on all New Mexico employers covered under the State’s Unemployment In-

surance laws. Since much of agricultural employment is not covered under these laws, the

ER&A Bureau would need to work with the Department of Agriculture to develop an appropriate

collection, or estimation, methodology.

PERFORMANCE IMPLICATIONS

Both NMDA and the Department of Labor would need to create performance targets and meas-

ures to comply with state performance and accountability in government requirements. Each

department would face impacts to its budget in conducting the tasks called for in HJM 105. In

the absence of increased resources, NMDA would not be able to carry out the requirements in

this bill efficiently because existing demands exceed available personnel.

The ER&A Bureau staff is entirely funded through Federal/State Cooperative Agreements with

accompanying work statements. These agreements are specific as to deliverable requirements

and deadlines. Collecting data on agricultural jobs lost to mechanization is outside the scope of

these federal agreements. To accomplish the tasks directed by HJM 105, ER&A Bureau staff

work assignments will have to be re-directed away from these federal agreements, thereby burden-

ing staff and potentially detracting from performance of Federal/State Cooperative Agreements.

FISCAL IMPLICATIONS

This legislation does not include an appropriation to collect data, perform statistical analysis, and

investigate new advances in technology and agricultural machinery, which would be necessary to

perform the tasks associated with HJM 105 successfully and for the benefit of displaced workers.

NMDA would not be able to absorb the expense for setting up a system to track new technologi-

cal advances in agricultural production and emerging agricultural machinery developments under

current budget conditions.

Staff support track and estimate Agricultural jobs lost to mechanization and technology may re-

quire an equivalent of 0.2 FTE, or more, of a basic-level economist. The ER&A Bureau staff is

entirely funded through Federal State Cooperative Agreements with accompanying work state-

ments. Due to changes in funding formulas, New Mexico has recently suffered reduced funding,

without reduction in workload.

Based on the average salary for ER&A employees, the non-personal services costs and the

AS&T costs the projection for this FTE is $19,209.00 in FY05. An slight increase in costs is an-

ticipated in FY06 and subsequent years due to increasing salaries and increase in goods and ser-

vices.

NMDA would require at least a half-time FTE or funding to direct and contract these services to

fulfill the requirements under this bill.

ADMINISTRATIVE IMPLICATIONS

Work assignments will have to be re-directed for ER&A Bureau staff designated to support the

House Joint Memorial Bill 105/aHFL # 1 Page 3

tracking and estimation of Agricultural jobs lost to mechanization and technology.

TECHNICAL ISSUES

Agricultural workers may leave a job for any number of reasons and isolating those strictly lost

due to mechanization would be difficult, if not impossible. Although some collection of data

may take place, a practical approach would call for some kind of modeling and estimation meth-

odology.

OTHER SUBSTANTIVE ISSUES

The Economic Research & Analysis Bureau of the Department of Labor produces industry and

occupational projections. The nonagricultural forecasts for major industries provided in these

projections are based on the conceptual framework of the Current Employment Statistics Survey

conducted by the New Mexico Department of Labor as part of a cooperative agreement with the

US Department of Labor. The occupational projections are based on an augmented employment

base that includes estimates of agricultural workers, the self-employed, and private household

workers.

BD/yr:rs