SANTA FE – The quest to diversify New Mexico’s economy and create thousands of new sustainable jobs is hampered by the sense that a state heavily dependent on federal spending and oil and gas doesn’t control its own economic destiny, the lead consultant for the state Jobs Council said Monday.
Mark Lautman, the council’s consultant, referred to that mind-set as an obstacle but acknowledged the state faces daunting challenges to pull itself out of a post-recession economic “death spiral.”
New Mexico had an unemployment rate of 6.7 percent as of last month – the nation’s second-highest rate, after Alaska – and lost 2,000 jobs during a recent one-year period, with energy-producing sectors hit especially hard by falling prices for oil and natural gas, according to the state Department of Workforce Solutions.
Meanwhile, federal spending also contracted during the recession.
To bring New Mexico employment back to pre-recession levels, a total of 147,177 “economic base” jobs will have to be created over the next decade, according to findings of the Jobs Council, a bipartisan group of lawmakers, trade officials and business leaders formed in 2013 to study ways to boost the state’s economy. Economic base jobs are defined as positions that bring in money from outside the state.
At a Monday hearing at the state Capitol, the Jobs Council reviewed possible legislation for the 2017 session that included expanding broadband access, marketing New Mexico to retirees and establishing regional jobs-focused planning groups around the state.
Other steps proposed by the council include expanding the state’s film incentive program and enacting or broadening tax breaks, including one for out-of-state investors.
Already, Lautman said, state legislators and elected officials have taken steps to make the state more economically competitive in recent years by increasing funding for economic development initiatives – such as a state “closing fund” to offset the costs of business expansion and relocation – and bolstering workforce training programs.
However, he said, those improvements to the state’s economic climate have been largely offset by high recent rates of attrition – including layoffs and retirements – in various job sectors.
“It’s not that we’re doing a bad job,” Lautman said. “We’re making improvements all the time.”
But some members of the Jobs Council said the state still faces fundamental stumbling blocks that are preventing it from keeping pace with its neighbors.
Rep. Monica Youngblood, R-Albuquerque, said some businesses already operating in the state are having trouble finding qualified employees, adding, “My thought is it’s the workforce that’s the issue.”
Another challenge for economic growth is the state’s massive budget shortfall, which has prompted spending cuts to existing programs, such as the Tourism Department’s marketing campaign.
John Garcia, executive vice president of the Home Builders Association of Central New Mexico, said the state should expand its tourism marketing efforts to target retirees.
“The world sees us as a great place to retire and come and visit,” Garcia said during Monday’s hearing. “Phoenix has the heat, Houston has the humidity – we can beat them all just on weather.”