Courtesy of the Las Cruces Bulletin, by Richard Coltharp
With or without a fiscal cliff, New Mexico, one of the nation’s per-capita leaders in federal jobs, may lose at least some of those jobs both in the near and long terms. “The federal government can no longer be considered a growth industry in New Mexico,” said state Economic Development Secretary Jon Barela Tuesday, Dec. 4, at a gathering of the Mesilla Valley Economic Development Alliance.
According to some studies, the state could lose as many as 20,000 jobs, Barela said. “The Department of Defense and the Department of Energy have to lead the way,” Barela said of the job cuts. “And guess what? The DoD and the DoE have a very big presence here in New Mexico.”
Barela and his department have a plan, however – the New Century Jobs Initiative – and he shared it with Las Crucens at the meeting.
“What we have proposed is a common sense approach to creating New Mexico jobs,” he said. “If we do this initiative, we’re poised to offset some of those job losses. They’re sobering numbers, but numbers I think we can handle.”
The seven-point plan comes as a package, he said – “We need all seven of them.” “If we do that, now I’ve got more tools in which to sell New Mexico,” he said.
A point-by-point description of the plan’s tenets follow. In parentheses are Barela’s assessment of how each may fare through the state Legislature, which convenes in January 2013 for a 60-day session.
Single-sales factor
The New Century Jobs Initiative is pushing for a single-sales factor, which allows companies to pay only on income from sales within the state. It would be phased in and Barela believes it would encourage job creation and investment in New Mexico. He believes lost revenue would be offset by reduced entitlements because of increased jobs. (“This had a good chance in the Legislature.”)
Corporate income tax
New Mexico’s corporate income tax of 7.6 percent is second highest among nine Western states, behind only 8.8 percent in California, which is expected to be lowered soon. Nevada, Texas and Wyoming have a corporate income tax rate of zero. The initiative supports reducing the rate to 4.9 percent over four years. Revenue will be offset in closing some of the loopholes that result in the state’s $941.1 in credits, exemptions and deductions. (“A decent chance.”)
Local Economic Development Act (LEDA)
This would create a closing fund to complete deals when recruiting companies. Could fund infrastructure for local governments tied to direct job creation. Abuses of similar funds in the past have tainted this concept in the eyes of some. (“This will be challenge. But we’re only asking for $10 million. By comparison, Texas has $1 billion for this purpose.”)
Job Training Incentive Program (JTIP)
This tool offers financial support for hiring and training new employees. The initiative seeks $4.75 million for the program. (“An excellent chance. Wide, bipartisan support.”)
Capital outlay reform
Seeks methodology by which capital outlay is reviewed and prioritized on a statewide, big-picture basis. The goal is to eliminate long-term, piecemeal projects and focus on the most impactful projects and getting them completed and leveraging federal matches. It would change a longstanding culture in the state of how capital outlay is done. (“This will be difficult.”)
Spaceport informed consent
This would close the loophole in Spaceport America’s informed consent legislation, which currently protects all involved but suppliers and manufacturers. The loophole is big, considering 12 other states with spaceports already have such legislation in place, giving them a significant competitive advantage.
“This is a $209 million investment which you in Doña Ana County have participated in significantly,” Barela said. “If we don’t pass it this year, in our third attempt, it’s possible we may lose our anchor tenant (Virgin Galactic).” Barela credited state Sen. Mary Kay Papen of Las Cruces for her efforts on the legislation. He also said strong opposition from the New Mexico Trial Lawyers Association, which has “a lot of deep tentacles in the Legislature,” has been a roadblock. (“A challenge.”)
MainStreet investment
The initiative supports increased investment for the New Mexico MainStreet program, which works in downtown areas to create a positive business environment and preserve cultural locations. The program has been and can continue to be important for Downtown Las Cruces. (“Should be a slam dunk.”)
