Copyright © 2019 Albuquerque Journal
SANTA FE – Gov. Michelle Lujan Grisham signed legislation Wednesday that would double the amount of money invested in a state program that helps small businesses and startups in New Mexico.
The measure, Senate Bill 10, is expected to provide an extra $50 million for the state’s nonprofit Small Business Investment Corp.
“This program works, which is why we committed to doubling it,” Lujan Grisham told a news conference at the Capitol. “This is good for New Mexico. It’s good for business.”
The legislation calls for 2 percent of the state’s Severance Tax Permanent Fund – rather than 1 percent – to be invested in the program, which provides loans and other help to local businesses that otherwise have trouble securing financing.
The Severance Tax Permanent Fund receives revenue from oil and gas taxes. It was created in 1973 as a way to help the state save and invest severance taxes that aren’t used to finance capital projects, according to the State Investment Council.
A small share of the money also is dedicated to helping local businesses through the Small Business Investment Corp.
The legislation won approval in the Senate 36-0 last month and passed the House 39-19 on Saturday.
Staff for the State Investment Council told legislative analysts that the small-business investments are unlikely to produce market-rate returns. That means they produce less money than if they had been invested otherwise.
But supporters said it’s worth it to promote job creation and help launch new businesses, especially for New Mexicans who can’t get a business loan through a bank.
“Clearly, it’s going to set the stage for economic development across New Mexico,” said Sen. Carlos Cisneros, a Questa Democrat and co-sponsor of the bill. “It’s needed – that extra 1 percent is going to take us a long way.”