Group Proposes Ways To Boost New Mexico Employment

Oct 3, 2013

With over 14% of the state’s workforce unemployed or underemployed, New Mexico should enact a package of policies that set the table for job creation, according to a new report released today by Think New Mexico. Think New Mexico is the nonpartisan, results-oriented think tank that has led successful campaigns to repeal New Mexico’s regressive food tax and to enact three constitutional amendments to reform the Public Regulation Commission.

In a report titled, Addressing New Mexico’s Jobs Crisis, Think New Mexico presents a package of policy proposals designed to improve the climate for job creation in the state. These proposals are based on the recommendations outlined by the Ewing Marion Kauffman Foundation in its 2012 Start-Up Act for the States, which comprehensively studied job creation strategies across the nation. Based on that research, the Kauffman Foundation recommended that states enact policies to: (1) increase the supply of potential entrepreneurs; (2) reduce administrative burdens on business creation; and (3) facilitate the growth and development of existing companies. Think New Mexico’s new report offers one policy solution in each of these three areas.

First, Think New Mexico recommends that the state increase the number of entrepreneurial undergraduate students studying at New Mexico’s public universities by offering in-state tuition to more international STEM (science, technology, engineering, math) and business students. The research shows that international STEM and business students tend to be disproportionately entrepreneurial, and the report points out that 18% of the Fortune 500 companies were founded by immigrants—as were two of New Mexico’s largest supermarket chains, El Mezquite and El Paisano, among many other companies. The report also highlights the case of Andy Lim, who came from Taiwan to study at the University of New Mexico and went on to found the Albuquerque-based software company Lavu, which currently employs over three dozen New Mexicans and is growing rapidly.

To cover the cost of providing in-state tuition to international STEM and business students, Think New Mexico proposes eliminating or reforming seven existing tax incentives that benefit narrow special interests and lack sufficient accountability. These include tax breaks for cigarette distributors, horse racing, and professional fighting.

Second, Think New Mexico recommends creating a one-stop online portal where businesses can file all the forms and fees required by state agencies (such as the Taxation and Revenue Department and the Department of Workforce Solutions). Eighteen states have created such portals, simplifying and speeding paperwork processing and improving the climate for businesses in those states. For example, after Delaware’s one-stop portal was implemented in 2006, it resulted in a 300% improvement in business license processing time and earned a nearly 90% satisfaction rate among businesses using the service.

Finally, Think New Mexico recommends that the state establish a post-performance incentive to encourage businesses to relocate to New Mexico or expand their operations here. This incentive would rebate up to 30% of the new taxes created by the first 5-10 years of a business expansion or relocation—but only after significant numbers of new jobs have been created. By contrast, pre-performance incentives provide companies with taxpayer dollars up front and then attempt to claw them back if companies fail to perform. A post-performance incentive similar to the one Think New Mexico is proposing was enacted by Utah in 2008, and it has led to the creation of over 25,000 jobs in five years from companies like eBay, Boeing, and Proctor & Gamble. Because it is dependent on performance, the benefit to taxpayers always outweighs the cost of the post-performance incentive.

“The jobs crisis is the most urgent challenge facing New Mexico’s families,” said Fred Nathan, Executive Director of Think New Mexico. “The reforms Think New Mexico is proposing are designed to have both immediate and long-term impacts on alleviating that crisis.”

Think New Mexico is asking the Legislature and Governor Martinez to enact these policy proposals during the 2014 legislative session.

Think New Mexico is a nonpartisan, results-oriented think tank dedicated to improving the quality of life for all New Mexicans, especially those who lack a strong voice in the political process. Along with the food tax repeal and Public Regulation Commission reform, the group has successfully won passage of legislation making full-day kindergarten accessible to every child in New Mexico; creating a Strategic Water Reserve to protect and restore New Mexico’s rivers; redirecting millions of dollars a year out of the state lottery's excessive operating costs and into full-tuition college scholarships; and reforming title insurance to lower closing costs for homebuyers and homeowners who refinance their mortgages.

More information is available on the organization’s website at: