County needs 18,000 new jobs by 2023

If Sandoval County doesn’t create 18,000 jobs or more in the next decade, it faces a worse economic decline than it’s seen in recent years, according to an economic development consultant.

Under contract with the county, economic expert Mark Lautman worked with representatives of various interests in the county to create a master plan with recommendations for economic development.

According to Lautman’s report, household incomes have dropped by more than 22 percent countywide in the last decade. Urban communities have lost more than a third of their economic-base jobs, and rural communities have suffered even more.

To return the economy to pre-recession levels, governments and private organizations must work together to increase funding of economic development efforts as well as support and recruitment of businesses, according to Lautman’s recommendations.

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Rio Rancho Economic Development Corporation’s funding has dropped from $650,000 about the time the recession started to $241,000 now, with both public and private sectors cutting their contributions because of tighter budgets, Lautman said. Cities competing with Rio Rancho for industry spend more for economic development than the City of Vision.

“These are investments that if you don’t make them, you don’t get back to the revenue streams you used to have,” he said.

Commissioner comments

County Commissioners Don Chapman and Glenn Walters, both of whom represent portions of Rio Rancho, said Lautman’s recommendations are a good start.

Chapman said he’s been very vocal about his stance that the county should lead in economic development.

“And frankly, with the recession the last few years, the community has really suffered, and if we don’t do something proactive about it, we’re not doing what we should as community leaders,” he said.

Walters said commissioners would need to discuss the recommendations more before deciding whether to adopt them, but they provided a basis for meaningful conversation and specific targets for measuring success.

“I think we have our work cut out for us,” he said, adding the county government would need to develop partnerships with the communities.

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Definitions

In Lautman’s master plan, he defines economic development as actions taken to grow the county’s economic base faster than its population. Economic-base jobs, the measure of economic development for the plan, are positions in which the goods or services produced are paid for by people or organizations outside the state.

Service and retail positions aren’t economic-base jobs, but those at Intel Corp. and Hewlett Packard are, for example. Lautman said if the number of retail businesses increases without new money coming into the area, they only cut the economic pie into smaller and smaller pieces or start going out of business.

“At some point, you have to add money to your economy,” he said.

Economic-base jobs accomplish this. Once enough economic-base jobs are in place, Lautman continued, the retail sector takes care of itself or can be encouraged strategically.

Target numbers

The group working on the study projected Sandoval County would have about 20,000 more people in 2023. Lautman said the population estimate takes into account both trends and a realistic goal for the number needed for a decent housing market.

“Rio Rancho’s not going to be a healthy place until the housing market comes back to at least a fraction of what it was before,” Lautman said.

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About 43 percent of the 2023 population would need a job, he said.

To cover population growth, bring unemployment down from more than 9 percent to 4 percent and replace jobs lost in the natural course of business, Lautman said it’s necessary to create 18,000 jobs, 10,715 of which need to be economic-base jobs. That translates to creating about 1,100 economic-base jobs a year.

At that level of job creation, Lautman said, the county will be in the black, but the economy won’t be as strong as it was before the recession.

Possibilities

According to Lautman’s report, health care is the best and possibly only major sector opportunity to make an economic difference in the short term. The federal Affordable Care Act will result in a lot of people getting health insurance and wanting primary and preventative care, he said.

However, there aren’t enough workers or places to meet the demand.

“And Rio Rancho, in particular, is in a really good position to be the center of development for that capacity for the state,” Lautman said.

He pointed to UNM West, the local Central New Mexico Community College campus and the two new hospitals as assets to help train new health care workers. He thought the area could get 2,500 health care and social services jobs, conservatively, in 10 years.

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Lautman also estimated the county could obtain 2,500 manufacturing jobs.

With improvements to the state corporate tax code and change at the county level, the local Intel plant is back in the expansion cycle, he said.

“All the feedback we’re getting from Intel and Intel watchers is Rio Rancho is probably good for at least one, maybe two, expansions in the next decade,” Lautman said.

He attributed the recent redeployment of 400 Intel employees to changes in business rather than a problem locally.

Independent work — people working from home — is the fastest-growing sector in New Mexico, Lautman continued. With economic programs, the county could get 800 more solo jobs, which are viable options for urban and rural areas.

Opportunities for the rural parts of the county — whose economies are near insolvency after years of recession, drought and devastating wild fires — involve agriculture, tourism and forestry work.

The U.S. Forest Service is planning a 20- to 30-year reforestation project that could create 600 jobs or more, revitalizing the area’s wood harvesting and processing sector.

Other economic base sectors have potential for the county as well.

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“However, it needs to be understood that virtually none of these opportunities can materialize without urgent special action by the county’s major stakeholders,” Lautman’s plan states.

Only about 20 percent of the necessary economic base will appear without deliberate work, he said.

If the economy doesn’t grow faster than the population, governments and schools have to serve more people with less money, Lautman continued. However, if there’s more money than people compared to the past year, he said, governmental entities can make improvements and lower taxes because revenues are growing faster than service burdens.

The plan

First, public and private stakeholders must unite and develop a plan, according to the recommendations. Then, the Rio Rancho Economic Development Corporation needs to expand its scope countywide, which will require a lot of money, public and private.

Then, economic developers need to establish programs to stabilize the rural economies and, after the economic “bleeding” is stopped, create innovative initiatives to compete in a new economic era, according to the recommendations.

In particular, the county needs to train its unemployed people in skills in demand.

“There’s not enough qualified workers to staff the jobs you have,” Lautman said.

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The whole nation is struggling with that situation, he added.

Lautman expects it to take three to seven years to see the effects of the plan.

Also, Albuquerque’s economy is likely to decline because of the federal government sequester, so its overflow jobs won’t fill the hole in Rio Rancho, Lautman said. Plus, Rio Rancho is less competitive than Albuquerque when it comes to recruiting business, according to Lautman’s plan.

Is it possible?

When asked if they thought it was feasible to create nearly 11,000 economic-base jobs in 10 years, Chapman and Walters were optimistic.

“Anything’s possible if you work at it,” Chapman said.

Walters agreed that anything is possible.

“Let me put it this way: It’s definitely not possible if we don’t set some targets and take action on it,” he said.

Lautman said his recommendations are “absolutely” doable.

“They’re not going to be easy, and they’re not going to happen on their own, but absolutely,” he said in answer to the question.

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