SANTA FE, N.M. — Gov. Susana Martinez on Thursday outlined roughly $65 million in new initiatives she will propose to New Mexico legislators in an attempt to make the state more economically and academically competitive.
Speaking in front of more than 700 people at a luncheon hosted by the Greater Albuquerque Chamber of Commerce and other business groups, Martinez said the initiatives would help prepare the state for possible federal budget cuts.
“We must diversify our economy and not have such a heavy reliance on federal jobs,” the first-term Republican governor said. “We can no longer rely on government as a growth industry in New Mexico.”
The state lost 1,200 federal jobs during a recent 12-month period, part of a net loss of 4,800 jobs statewide, according to the state Workforce Solutions Department.
The initiatives Martinez outlined Thursday include about $40 million in economic development proposals and roughly $25 million in new education initiatives.
Among the proposals:
⋄ Trim the state’s corporate tax rate from 7.6 percent to 4.9 percent, which would match the rate recently enacted in Arizona.
⋄ Appropriate nearly $5 million for job training incentives, which can be used as a recruiting tool to try to get outside companies to move to New Mexico.
⋄ Invest $10 million in Local Economic Development Act funding to help local governments pay for land acquisitions or infrastructure needs.
⋄ Give small businesses a tax credit for each employee they hire and retain during a two-year period.
⋄ Spend $13.5 million on education intervention measures, including new reading coaches who would be deployed in school districts around the state.
She said that next week she will unveil her complete budget proposal, which will include the initiatives outlined Thursday.
Democratic lawmakers are expected to introduce their own package of job-related proposals during the legislative session, which begins Jan. 15. But one top-ranking legislator said the state needs to closely examine any new tax credit or rate cut.
Specifically, Senate Finance Committee Chairman John Arthur Smith, a Deming Democrat, said he’s concerned that the price tag of one recent Martinez administration initiative – a tax cut aimed at bolstering the state’s manufacturing and construction sectors – was revised upward after being passed by the Legislature.
“Philosophically, I’m not in disagreement with the direction we’re trying to go,” Smith said. “But any tax incentive that we have for economic development, there’s a delay between when it’s implemented and when its benefits can be seen.”
In addition, the possibility of federal budget cuts in areas such as defense spending and Medicaid could lead to New Mexico having to absorb additional costs, Smith said.
State lawmakers are expected to have $283 million in “new money” – or money in excess of this year’s spending levels – on hand during the coming fiscal year, based on revenue estimates released last month.
However, a total of $72 million in already-approved spending measures will limit how much of that money can be spent on new initiatives during the coming year.
New Mexico has about $981 million in tax credits, exemptions and deductions on its books for the current budget year, according to the Legislative Finance Committee. However, the state’s employment growth has been sluggish in the past year, lagging behind the national average during that time period.
During her Thursday remarks, Martinez said that she would like to lure more outside companies to New Mexico and that she is committed to working with Democrats, who hold a majority in both legislative chambers, to advance her agenda.
“We do not ever want to see the gridlock of Washington, D.C., here in our state,” she said.
Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce, said the business community will support Martinez’s initiatives.
“We’re going to work with the governor and the Legislature to make New Mexico more competitive during the 60-day session,” Cole said.
Martinez told the audience that she needed its help – urging all to contact their legislators and go to Santa Fe to support the agenda.
Martinez also said Thursday that she will push during the 60-day session to implement a new formula that would determine how much businesses, via premiums, are required to pay into the state’s unemployment insurance fund.
She also stressed the importance of education in making the state more competitive.
On that theme, Martinez was treated to a story written and read by first-grader Jamal Witter of Bel-Air Elementary School in Albuquerque. He is part of the Albuquerque Reads program, organized by the chamber, in which community members spend time every week reading to a student.
While the governor ignored an offered chair to sit cross-legged on the stage’s floor, Jamal took the mike and read his book to her and the hundreds in attendance in a clear voice.
The book’s title was “The Governor Rocks.”
— This article appeared on page A1 of the Albuquerque Journal