CPR for New Mexico’s Economy

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By Jerry Ortiz y Pino

—Two politicians are attempting to kindle a bipartisan fire underneath the barely simmering pot of New Mexico’s economic activity. The Republican secretary of economic development, Jon Barela, and a Democratic state senator, George Muñoz of Gallup, are promoting a New Century Jobs Agenda legislative package. It’s a rehashing of dependable, orthodox, time-tested—and tired—suggestions for kickstarting commercial growth in this laggard state.

In other words, they’ve presented us a menu of predictable failures.

Barela and Muñoz don’t plow new ground or put forth controversial initiatives. Instead, they propose tax cuts for businesses, easing governmental regulations, two small-scale investment funds, continuing the popular Job Training Incentive Program, consolidating capital outlay into major statewide projects, and freeing the spaceport from fear of lawsuits.

If the Martinez administration and the Democratic legislature miraculously cooperate and pass every one of the seven items on that agenda, I doubt there’d be much change in our bleak fiscal trajectory.

It isn’t that the authors’ ideas are bad or don’t deserve support. They’re simply inadequate in the face of the challenges confronting us. We suffer from economic coronary collapse, and Barela and Muñoz want to apply cold compresses to our temples. The effort can’t hurt, but it isn’t likely to revive the victim. We need vigorous CPR, not wrist holding; we need defibrillator paddles, not lapel ribbons.

Whatever survives the legislative sausage grinder and lands on the governor’s desk needs two characteristics: scale large enough to make a difference and substance that captures the public’s imagination. The solution should to excite people andinspire confidence.

At the top of the 2013 agenda should be a seriouscampaign to address lagging infrastructure statewide. Bridges, highways, public buildings, dams, water and wastewater systems—New Mexico’s backlog of desperately needed repairs and replacements is miles long. We could begin addressing it and simultaneously put thousands of New Mexicans to work if we commit at least twice the level of funding to this year’s capital outlay program that we usually do, then maintain that higher level for the next few years.

The usual recommendation for state infrastructure might be in the neighborhood of $400 million. That seems like a lot, but it’s really just treading water. It won’t have the impact of a dramatically bigger campaign, say something double that size. A commitment to dramatic action would still allow for spin-off suggestions, stretching that $800 million building boom even further to revive our economy.

But where can we find an extra $400 million for economic muscle?

Slowly the state’s operating reserves have crept up over the last three years. Reserves in 2010 were miniscule as the economic recovery began. In 2011, they were back to a level that keeps bond rating companies happy. In 2012, reserves were even higher, and 2013 promises further gains. It makes the Legislature’s fiscal conservatives nervous to even mention those reserves. Millions are doing nothing more than sitting in the bank, gathering dust.

As things stand, a lack of early financial support stunts or kills off many of the most promising ideas incubated in our research universities and national labs. A portion of the capital outlay could be set aside as a venture fund for startup companies commercializing  innovations generated by our labs and institutions of higher learning.

We might also set aside part of our newly buffed-up capital for a partnership with New Mexico banks struggling with large numbers of home mortgages in foreclosure. A state-funded neighborhood stabilization project could revitalize communities, put blue-collar families into homes of their own and jump-start housing construction again.

What hasn’t worked is race-to-the-bottom competition with nearby states by enticing new businesses with low taxes, cheap labor and a hands-off regulatory climate. Selling ourselves as an exploitable substitute for a third world colony will increase our plight, not solve it.

Ramberg Media Images / CC BY-SA 2.0

Ramberg Media Images / CC BY-SA 2.0

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  • http://twitter.com/ingram1ja John Ingram (@ingram1ja)

    Not one (1) word about generating new state revenues in the Senator’s opinion piece.

    Not one (1) word about providing new state revenues for New Mexico’s public education employees, who have gone without cost-of-living pay increases for five (5) years.

    Why is NM’s economy failing to recover? Because 99% of us don’t have the money to spend.

    Why don’t we have money to spend? Because highly-paid lobbyists persuaded our state senators and representatives to give sales tax/gross receipts tax cuts to special interests, state personal income tax cuts to the rich, and state corporate income tax loopholes to out-of-state corporations.

    Why is unemployment up in New Mexico? Because special interests, the rich, and corporations are not using the money from their tax cuts, tax breaks, tax credits to create jobs.

    The ABQ Journal Business Outlook states that unemployment is down in AZ, down in TX, down in Colorado, but up in New Mexico.

    Sen. Munoz and Jon Barela want more of the same? They are totally out-of-touch with 99% of New Mexicans.

    There isn’t enough shame to dump on Sen. Munoz, Barela, or other NM state lawmakers who advocate for more tax cuts at this extremely difficult time for our state’s economy.

    • http://jerry1942.wordpress.com jerry1942

      John, I recognize your frustration, but it won’t do much good to try to raise taxes when we have a governor who has vowed to veto all revenue increases. We will raise salaries for state workers and teachers, but we are far, far from restoring everything that has been lost or catching up.