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Business Needs To Lead, Offer New Ideas

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First at a briefing hosted by the Greater Albuquerque Chamber of Commerce, then in the pages of the Journal, New Mexico’s businesspeople were shocked to learn that about 70 percent of our state’s children are born with the assistance of Medicaid.

Their shock is difficult to understand. When you have the nation’s worst childhood poverty rate and the 43rd-lowest per capita personal income, Medicaid goes with the territory.

The businesspeople asking for an answer to this state of affairs need only look in the mirror for the solution. The cure to poverty is jobs. As businesspeople are fond of saying, it is business, not government, that creates jobs.

So where are the jobs that the state’s businesses are supposed to be creating? The Great Recession has been over for years now.

It is time for difficult conversations.

Business lobbyists are all over the Legislature pushing for a reduction in corporate income tax rates and an approach that bases taxes entirely on in-state sales. For what it’s worth, I think this is an OK idea, though a better idea is to eliminate not only corporate income taxes entirely but also the corporate welfare the state awards in the form of tax breaks.

Intel insists this is not an Intel bill, but the reality is companies like Intel and Fidelity and Hewlett-Packard will all benefit from this legislation, and if that means Intel will put its next-generation fab in Sandoval County, I’m all for it.

But this legislation, proposed by the Gov. Susana Martinez administration, will do nothing to help the vast majority of businesses in New Mexico for the simple reason that very few pay corporate income taxes.

The Legislature is being asked to provide tax breaks to small businesses that hire people. In the real world nobody, but nobody, puts someone on the payroll for, potentially, years and years just because he or she got a tax break in 2013. People are hired because businesses need them, and all the tax incentives in the world won’t change that calculus.

Yet, you can’t attend a business organization’s luncheon without someone rallying the troops to descend on Santa Fe to back the administration’s program.

Difficult conversation No. 1: Are New Mexico’s businesspeople so out of ideas for growing their own businesses that their solution to our lack of economic growth is to modify tax codes in hope that large out-of-state companies will hire the workers our own businesses will not?

The rationale for these tax changes is that they will help New Mexico compete with other states trying to lure manufacturers and corporate headquarters.

Difficult conversation No. 2: Is there any reason to think, given our remote location and lack of water, that a manufacturer of any size will locate here? Is there any reason to think that Intel’s locating here was anything more than the exception that proves the rule?

Can we attract corporate headquarters when our air connections are so much more difficult than those in Chicago, Dallas, Atlanta and New York? Given that manufacturing and corporate administrative jobs are usually the first to be cut when bad times hit, do we want to court these companies?

Businesspeople I talk with despair frequently that New Mexico’s economy is too dependent on the government. At the same time, countless businesses depend on spending by the military, the national laboratories and a host of federal and state agencies.

Difficult conversation No. 3: Where are these businesses’ plans for finding new private-sector and consumer markets? If they think government dependence is such a problem, why do so many of them depend on the government, for everything from research dollars to construction contracts?

Much of New Mexico’s poverty is in its rural areas. About 25 percent of the state’s people are enrolled in one Medicaid program or another, but the rate goes over 30 percent in some of our most rural areas – 35.9 percent in Torrance County, 34.3 percent in Union County, 30.8 percent in Chaves County, 38 percent in Luna County, 40.8 percent in McKinley County.

Some of our agricultural businesses are so marginal that the smallest dip in prices, the loss of one calf to a wolf, or one more week of drought will put them under. At the same time, 90 percent of the state’s water is still dedicated to agricultural use.

Difficult conversation No. 4: From a strictly economic perspective, how much agriculture can New Mexico afford?

Go to the membership luncheons of any number of business groups, and the speaker who details the approach we must take to improving our economy is almost always a city or state government official or a lobbyist.

Difficult conversation No. 5: Does the New Mexico business community have any real leaders? Where are they? Is the Legislature the best place for a business leader to spend their time? Should leaders instead spend their time growing their companies?

The most difficult conversation of all is this one: New Mexico’s businesses are the economy. If they are run successfully, the economy will be successful. What does it say about the quality of our businesses and the people who run them that the state’s recovery lags behind the national recovery so badly?

UpFront is a daily front-page news and opinion column. Comment directly to Winthrop Quigley at 505-823-3896 or wquigley@abqjournal.com. Go to ABQjournal.com/letters/new to submit a letter to the editor.
— This article appeared on page A1 of the Albuquerque Journal

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