Editorial: Governor's proposals warrant further study

Gov. Susana Martinez has laid the ugly truth on the line.

"We must diversify our economy and not have such a heavy reliance on federal jobs," she told about 700 people attending a luncheon hosted by the Greater Albuquerque Chamber of Commerce and other business groups.

"We can no longer rely on government as a growth industry in New Mexico."

There it is. And probably not a big surprise to anyone who has been watching the state's economy carefully over the past few years.

During a recent 12-month period, the state lost 1,200 federal jobs as part of a net loss of 4,800 jobs statewide. Just because Congress has avoided going over the fiscal cliff for the moment, cuts to federal programs and spending remain likely.

Given that New Mexico has been heavily dependent on the federal government for its economy, they are likely to hit hard.

And the state isn't exactly starting from a position of strength. According to a study by the American Legislative Exchange Council, New Mexico's economic picture, which had ranked 27th among the states in 2008, had fallen to 39th place by 2011.

If New Mexico wants to grow its economy, we must compete with neighboring states that are throwing out the welcome mat to business and industry. Failing, so far, to approve Spaceport America liability waivers is one example of the state actively throwing up roadblocks to success.

New Mexico's arcane tax structure with myriad tax and building codes make New Mexico particularly unattractive to businesses seeking to build or move here. Martinez has offered up some plans to address the problem. But they come with a price tag — $65 million in a year when many interests will be competing for funding.

Her proposals include cutting the state's corporate tax rate from 7.6 percent to 4.9 percent, appropriating nearly $5 million for job training incentives, investing $10 million in Local Economic Development Act funding to help local governments pay for land acquisitions or infrastructure, giving small businesses a tax credit for each employee they hire and retain during a two-year period and spending $13.5 million on education intervention measures.

These are across-the-board initiatives that don't pick winners and losers. And while they warrant further study, it's helpful to have something on the table.

The governor deserves credit for recognizing the game board is changing and that New Mexico needs to step up if we want to do more than rely on Medicaid expansion and poverty as an economic driver going forward.

— Albuquerque Journal