New Mexico is one of three states profiled in the study by Good Jobs First , a national resource center that tracks economic development subsidies.
“With fewer people employed at large companies, one would expect economic development resources to predominantly be focused on smaller companies that would grow the state’s economy,” the study said.
The report said New Mexico is similar to the other two states studied, Florida and Missouri, in the way business incentive money is divided up. Small businesses, defined as companies with 100 or fewer employees, got 18 percent of the $63.3 million in New Mexico in 2014, compared to the 70 percent for large businesses. About 13 percent of the money analyzed in the study went to businesses or programs that support them, with no regard to company size, the report said.
The study, “Slicing the Budget Pie for Big Business,” looked only at state money spent on job creation and investment programs listed on state economic development agency websites. It recommends spending less on incentives for large businesses.
Angela Heisel, spokeswoman for the New Mexico Economic Development Department, said all of the state’s incentives aim to help small businesses. Those programs “have been very successful in helping local, home-grown businesses, like Santa Fe Spirits, RiskSense, Private Label Select and Little Toad Creek to name a few, expand and hire New Mexicans,” she said in a written statement.
“The majority of participants in our incentive programs are small businesses,” she said.
The Good Jobs First study said its analysis showed that the state’s Job Training Incentive Program directed 62 percent of its benefits to big businesses in 2014.
However, Heisel said many of the businesses that benefit from JTIP money are small operations that might add only one or two employees.
“What skews this, is when a larger company — say Comcast — comes in and is approved for 300 employees at one time,” she said in the statement. “By nature, larger employers will receive more funding based on the sheer number of jobs a larger business creates at a time because our incentives are tied to job creation numbers.”
Overall, in the fiscal year that ended last June, the program helped 59 companies, resulting in 2,011 new jobs, according to a state website.
Most of the employers Albuquerque Economic Development works with are small businesses, said Annemarie Ciepiela Henton, communications and marketing director. She called state incentives “a critical economic development tool (that) are available to all qualifying employers, regardless of size.”
“They do not favor big employers over small employers, but rather are designed to ensure a return on investment in the form of job creation,” she said.
The study did note that New Mexico has numerous programs aimed at helping small business, including Angel Investment tax credits and the New Mexico Small Business Assistance program, but “a handful or programs with much bigger budgets benefit bigger companies.”
For example, 93 percent of the dollars associated with the High-Wage Jobs Tax Credit went to big businesses. The tax credit is for new high-wage “economic base” jobs, and equals 10 percent of wages and benefits for each job created, the study said.
New Mexico did win praise for transparency. It and the other two states chosen for the study have “above-average transparency and tax expenditure reporting,” the report said.