By Jack Rogers
From the July/August 2016 Issue
When we interviewed Gov. Susana Martinez last year for our New Mexico Governor’s Report, she had succeeded in pushing through two major initiatives which promised to have a profound impact on improving the outlook for economic development and job-creation in the state.
Martinez secured $56 million in new funding for the Local Economic Development Act (LEDA) capital outlay fund, the largest amount ever committed to the fund since it was created in 1994 to provide support to NM communities in their efforts to attract new development projects. The governor also was in the process of launching New Mexico’s Technology Research Collaborative, which created a partnership between NM’s three national labs, the state’s three research universities and the private sector to fast-track innovations from the labs and provide the funding to commercialize these breakthroughs and bring new high-tech products to the market.
Now that a year has passed since our last chat, we thought this would be a good time to circle back and ask Gov. Martinez to tell us about the tangible results these initiatives have produced.
LEADING THE WAY IN JOB CREATION
The results are impressive. The revival of the LEDA fund (which had nearly zeroed out before Martinez took office) is credited by the governor with supporting projects that have created thousands of new jobs in New Mexico.
“This has been one of our most valuable tools for growing and diversifying our economy,” Martinez said. “We use the LEDA fund to recruit new businesses to the state and to help those companies grow. It provides local communities with access to funds to make infrastructure upgrades and improvements to ensure they can support and expand businesses.”
Known by state officials as NM’s “closing fund,” support from LEDA was crucial in bringing several recent projects to fruition, including Fidelity Investments’ expansion in Albuquerque and Safelight AutoGlass’ decision to locate in Rio Rancho.
The Safelite AutoGlass project in Rio Rancho will create 900 new claims processing and support jobs at the facility over the next four years, the largest single job-creating project in the state since 2009. Safelite, the world’s largest vehicle glass repair and replacement company, cited New Mexico’s workforce and business friendly environment as key factors in its decision to select Rio Rancho over other locations in other states.
“When job creators come to New Mexico, they see the differences we’ve made over the last six years,” said Gov. Martinez. “From cutting taxes on businesses, ending double and triple taxes on our manufacturers and slashing regulatory red tape, the message is clear: New Mexico is open for business. And more importantly, they see the high-quality workforce that New Mexico has to offer. They see the values that make our state not only the best place for business, but the best place to live and raise a family.”
New Mexico is investing $3 million in LEDA funding on infrastructure improvements to accommodate Safelite’s expansion. Safelite also plans to apply for the Rapid Workforce Development Fund, which Gov. Martinez enacted this year, to help teach its workers Spanish-speaking skills. The program calls for businesses and New Mexico colleges and universities to partner to quickly train and certify employees in specialized fields to fulfill the workforce requirements of companies who choose to participate.
CUTTING TAXES AND RED TAPE
In announcing the Rio Rancho project, Safelite President & CEO Tom Feeney hailed Gov. Martinez for enacting a slew of tax reform measures that transforming New Mexico’s reputation with the business community.
“The governor has enacted bold reforms over the last six years that send a strong message to industry-leading companies like ours,” Feeney said.
The cornerstone of Martinez’s tax reform effort occurred two years ago, when NM enacted a once-in-a-generation change in dramatically reducing its corporate income tax by 22 percent, creating a single sales factor for manufacturers which essentially eliminated the corporate income tax for those who produce a product in New Mexico.
“Not long ago, NM had a reputation of being really punitive, particularly to manufacturers that export their goods,” Martinez told BF. “We charged them higher taxes than other states. We had one of the highest business tax rates in the country, we used to impose layers and layers of taxes on manufacturers and contractors that made it really expensive for them to operate.”
Gov. Martinez swept away all of the punitive business taxes: “We haven’t raised taxes not one single time during my administration, instead we’ve cut taxes 37 different times,” she proudly noted.
A central feature of the governor’s economic development strategy is leveraging the state’s unique research assets into a bevy of emerging high-tech growth sectors. Gov. Martinez recently announced the first round of funding to commercialize innovations resulting from partnerships generated by the Technology Research Collaborative she created in 2013. The projects include advanced photonics for fiber-optic communications, advanced infrared imaging tools and nanotechnology for use in expanded wireless broadband.
“We want those ideas of tomorrow to be developed here and we want those products to be made and sold to the rest of the world from New Mexico because the talent is here to do that,” Martinez told BF.
Martinez, who chairs the public-private group that selects projects for TRC funding, noted that due to its national labs (including Los Alamos and Sandia) and research universities, New Mexico produces the most graduates with PhDs in the nation per capita. Last year, she enacted an expansion of NM’s tech-jobs tax credit.
The governor also has put out the welcome mat for the sharing economy, recently signing a bill permitting ride-sharing firms like Uber to set up shop in NM. Martinez recently announced that, for the fourth year in a row, the number of tourists visiting NM in 2015 was a record-shattering total: 33.2 million (the tourism and hospitality industry has added 9,000 new jobs during her administration). Martinez said ride-sharing would help spread the wealth of New Mexico’s booming tourism industry to smaller rural communities.
“It allows people to get access to alternative transportation and it’s very inexpensive,” she told BF. “Anytime you open the door to innovation our state wins, especially the smaller communities where you don’t necessarily have these alternatives. By embracing ride-sharing, we’re sending a message that New Mexico is open for business because it shows we will not let red tape get in the way of innovation.”