Snapshots: 60 Seconds… With Jon Barela, Cabinet Secretary, New Mexico Economic Development Dept.

By the Business Facilities Staff
From the March/April 2015 issue

Jon Barela, Cabinet Secretary, New Mexico Economic Development Department.
Jon Barela, Cabinet Secretary, New Mexico Economic Development Department

BF: New Mexico’s business climate has improved dramatically during the past four years. How have you accomplished that?
JB: The overarching proposition of the way we do business is fiscal responsibility. Four years ago, it was different picture: we inherited a $500,000 million deficit, almost 10 percent of our general fund. Through Gov. Martinez’s leadership and with bipartisan support, we were not only able to eliminate that deficit without raising taxes, but we’ve had several years of surpluses in our state account. We’ve been able to reduce taxes 24 times. The cornerstone of that effort occurred two years ago, when we dramatically reduced our corporate income tax by 22 percent, enacting a single sales factor for manufacturers which essentially eliminated the corporate income tax for those who produce a product in New Mexico.

BF: Have the tax cuts produced tangible results?
JB: Our state has improved its competitiveness. We’ve moved from being one of the worst states in terms of tax structure to one of the best. Ernst and Young now ranks New Mexico as no. 1 in the western U.S. for manufacturing a product.

BF: Can we expect more reforms aimed at spurring economic development?
JB: We have a corporate headquarters bill that will reduce taxes for headquarters relocations and expansions. We’ve already made reforms in our gross receipts tax system to reduce the burden on our manufacturing and construction industries, and we’re also eliminating barriers in other areas like research and development for other industries.

BF: Is workforce training a top priority in New Mexico?
JB: We’ve enacted several enhancements to our job training incentive program (JTIP), including streamlined application procedures and expansion of the JTIP program to more industries. The program is now a recurrent part of our state budget, which is a significant commitment to continuity. The governor has brought together a group of public and private sector leaders to develop and execute (workforce training) plans based on private-sector employment needs. We’re harnessing all of our resources and working in an integrated fashion to provide the workforce pipeline for these companies. We just completed a major survey of employer needs—current needs and projected needs—and we’re building that workforce pipeline based on those needs.

BF: Several states are beginning workforce training programs in high school. Is NM one of them?
JB: We’ve expanded early college dual-credit high school programs in the state. We’ve had enormous success with one high school in the southern part of the state, where we’ve helped a few hundred kids and not one dropped out over four years. The students who go through this program not only graduate with a high school diploma, they also wind up with a two-year certificate or two-year degree and are ready to either enter the workforce or continue their post-secondary education.