Prepared by: Eric GriegoExecutive Director, NM Voices for

Children

Gambling On Good JobsEconomic Development in New Mexico

During the Richardson Years

“Governor Richardson created 80,000 new jobs in New Mexico…..”

President Elect Obama at Richardson’s nomination for Commerce Secretary

Any Job is Good?What kind of jobs?At what cost to taxpayers?

Kenny Rogers“The Gambler”

"You gotta know when to hold em.

Know when to fold em. Know when to walk away.

And know when to run."

The Three Legs of the Economic Development Stool

RecruitmentExpansion/RetentionStart Ups

Low-Cost Destination?Number one lowest "overall cost of doing business."      North American Business Cost Review & Economy.com Energy Costs 5 % below national average and 19% below regional average.      Department of Energy 14th least expensive state for worker’s compensation.      Business Facilities Magazine

Doubling Down on IncentivesNew Mexico has more than doubled the

number of tax incentives in the last five years

More than 30 new tax incentivesDirect State InvestmentsJob Training Incentive ProgramLocal Incentives

Conservation and Historic Preservation Tax Credits Advanced Energy Tax Credit (2007) Agricultural Water Conservation (2007) Alternative Energy Product Manufacturers (2007) Biodiesel Blending Facility (2007) Blended Biodiesel Fuel (2007) Cultural Property Preservation (2007) Land Conservation Incentives (2007) Renewable Energy Production (2007) Solar Market Development (2006) Sustainable Building (2007)

Industry Incentive Tax CreditsGeneral Industry

Business Facility Rehabilitation (1994)Electronic Card-Reading Equipment (2001)High Wage Jobs (2007)Intergovernmental Business (2001)Investment Credit (1991)Small Business Research and Development

(2005)Rural Job (2005)Services for Resale (‘Pyramiding’) (2005)Technology Jobs (2000)

Industry Incentive Tax CreditsSpecific Industry

Advanced Energy (2007)Affordable Housing (2005)Biodiesel Blending Facility (2007)Double Local Option Film Production (2005)Hospitals Gross Receipts Laboratory Small Business Partnership (2007)Unpaid Doctor Services (2007)

Employment Enhancement Tax CreditsCorporate-Supported Child CareHigh Wage JobsInvestment CreditJob Mentorship (2003)Rural JobTechnology Jobs (2000)Welfare-to-Work

Direct State Investment

State Investment Council invests state funds in new and expanding companies and projects (films)State provides infrastructure funding for roads, water lines, airports, Spaceports, rail lines, etc.Tax Increment Financing

Job Training Incentive Program (JTIP)

$20 million annual fund Pays up to 80 percent of new employee salaries Up to six months

Local IncentivesIndustrial Revenue BondsLocal Economic Development Act (LEDA)

Infrastructure

“Do you want to raise horses or steal horses?”

Ernesto Sirolli, Ripples on the Zambizi

Recruitment vs. Start Ups

“Roll will ya! Roll will ya!! What’s the matter roll the dice!!”

Guys and Dolls Chorus

Winners and Losers

A Few Gambles We’ve TakenEclipse Aviation

Spaceport AmericaThe Film Incentive Program

Solar Energy

Eclipse AviationLight aircraft manufacturerReceived $20 million in state investmentMillions in infrastructure subsidies, JTIPFiled for bankruptcyState loses

Spaceport AmericaSpace Tourism Industry LaunchState paying for all infrastructureVirgin Galactic to launch from site$200 million in state and local investmentIs it a winner? TBD….

Tamalewood – Film IndustryDozens of major films shot in New MexicoIndustry literally built from scratch through

incentives$300 million in state loans$2 million per year in JTIPTax breaks for production companies Winner? Maybe.

Solar SuccessesAdvent SolarHundreds of good manufacturing jobsTax creditsJTIPNot used locally

Schott SolarHundreds of new high wage jobsIncentivized through TIF, JTIP, etc.

Challenges to Good ED PolicyPolitical/Electoral Timeframes vs. Long term

investmentsNeed for “Announcements”State-on-state competitionLack of ongoing independent evaluation

and analysis

Balance Three Legs of StoolRetention and Expansion

Incumbent worker training programsInvest in local companiesChange laws that disadvantage local

businesses (i.e. MCR, TIF)

Start upsIncubatorsFinancingWork supportsTax policy

Long-Term ED InvestmentsEarly ChildhoodEducationHealthcareWorkforce TrainingInfrastructureAn so on

Gambler’s Closing Thoughts“Every hand’s a winner. And every hand’s

a loser. The best that you can hope for is to die in your sleep.”