Key New Mexico sectors up in the air with another Trump presidency, new state legislators

Anti-immigration sentiment, drilling, tariffs and a Democratically controlled New Mexico Legislature trying to maintain its policies.

The 2024 election saw a lot of campaign promises from President-elect Donald Trump and the incoming New Mexican elected state officials — many of them contradictory — leaving business leaders scratching their heads as they try to anticipate next year’s regulatory climate.

While Republicans swept the White House and both chambers of Congress, the opposite happened in Santa Fe with Democrats controlling the governor’s mansion, the Roundhouse and the state’s federal delegation.

Being in the minority under an infamously vindictive president represents New Mexico’s first challenge.

“I won’t sugarcoat it: The return of President-elect Donald Trump to the White House presents incredible challenges for New Mexico and we must take those threats seriously,” U.S. Sen. Martin Heinrich, D-N.M., said in a statement to the Journal.

But the new regulatory landscape is not without opportunity for New Mexico businesses.

Business

Looking on a state level, New Mexico’s top business leaders are feeling both eager and cautious to see so many new policymakers at the Legislature — 28 in all.

“We are always looking for candidates that are moderate and are pro-business, and so we believe that we have a composition that we can get a lot done going into ‘25,” said Rhiannon Samuel, the executive director of NAIOP New Mexico, a commercial real estate development organization with upwards of 275 members consisting of real estate professionals, owners and developers.

Others hold more concern.

“I think it might even be more difficult this year than in previous years because of so many new people,” said Ernie CdeBaca, president and CEO of the Albuquerque Hispano Chamber of Commerce. With about 1,250 members, the Hispano Chamber is the largest chamber of commerce in the state and one of the largest Hispanic chambers in the country.

CdeBaca said he’s worried it’ll be difficult for all the new legislators to immediately jump into a 60-day session.

He’s concerned, he said, that progressive legislators will try to push an agenda that “might be difficult for some businesses to stomach.”

For example, legislation to require most businesses to provide paid family and medical leave has failed multiple times in the Roundhouse. It’s expected to be introduced again this year, and with the 60-day session not being limited to budget discussions or topics the governor deems germane, there could be more room to get the bill through compared to previous shorter sessions.

CdeBaca said more regulation is not what the business community needs.

He suggested legislators step back and conduct nonpartisan studies to understand how to grow business in New Mexico. He pointed to the state’s national labs, Air Force bases, technology and higher education institutes — “and (yet) we rank 49th and 50th in some of the economic indicators?" he said. “We almost have to try to be that bad. I mean, I don't understand it.”

For the commercial Realtors, Samuel said she’ll be watching if, New Mexico being a blue state surrounded by red states, policymakers start leaning more left of center or will work more toward moderate policy.

“Business is not Republican or Democrat,” Samuel said. “Business is pro-people. It's pro-community. And oftentimes that is in line with a moderate way of thinking.”

In terms of specific policies, Samuel said NAIOP will go after concrete timelines on administration reviews of commercial projects, as it has in the past, and will watch for any legislation on the state’s tax code, which she said “really needs a hard look.”

She said the organization will also support site readiness legislation, an effort to make more land in the state shovel-ready for companies to move in and set up. It can take years for companies to get up and running in New Mexico, because of utility restrictions and long wait times for obtaining materials, a nationwide issue that’s particularly exacerbated in New Mexico compared to surrounding states.

“If we can have predictability on how long it's even going to take to put something in place, whether it's predictive or it's a sure thing, that welcomes people to New Mexico,” Samuel said.

New Mexico has a “tremendous amount of underutilized” state lands and facilities, said Adam Silverman, the vice president and principal of local real estate developer Geltmore and incoming president of NAIOP New Mexico. He’d like the Legislature to discuss public-private partnerships to solve this.

In October, the Albuquerque City Council overwhelmingly failed to pass a bill that would create a fee for owners of buildings that are vacant and dilapidated. Silverman wants to see a state-level bill with a similar effort enacted.

He personally wants the Legislature to reconsider eminent domain in Metropolitan Redevelopment Areas for private use, which the state briefly allowed in the 2000s. Silverman explained that if Metro Redevelopment Agencies could take properties that have been vacant for decades in areas that are blighted and sell them to nonprofits or private Realtors, work could get done to transform the buildings into something helpful like housing.

“The government needs to come in and say, ‘We will get it appraised. We will pay you this money. You can go do whatever you want,'" Silverman said. “And then they put it out to (a request for proposals) to anyone in the public sector."

CdeBaca said he’s hopeful for New Mexico’s future. He grew up in Los Alamos, and he can’t imagine living anywhere else, he said.

“In spite of ourselves, almost, I think New Mexico is going to prosper,” he said.

Trade and immigration

New Mexico is in a “a wait-and-see kind of mood” in terms of what will happen with the border, according to Jerry Pacheco, the executive director of the International Business Accelerator and the president of the Border Industrial Association in Santa Teresa.

Santa Teresa’s industrial base accounts for about 63% of New Mexico’s total exports, most of which is bound for Mexico.

One major concern for Pacheco is how Trump’s administration will deal with trade in general.

Trump has widely talked about imposing a flat tariff of 10-20% on all imports as well as imposing additional tariffs, ranging from 60-200%, on goods from Mexico or China. Pacheco said that would only hurt the U.S. economy and encouraged the business community to put pressure on the political administration against such policies.

Millions of American jobs are dependent on trade with Mexico, he said. In 2023, the U.S. traded nearly $800 billion in goods and services with Mexico.

“Mexico should not be thought of as an adverse adversary,” Pacheco said. “They should be thought of as a good neighbor.”

Heinrich called the proposal for increased tariffs “nothing short of reckless” and said it could drive up prices on everyday goods like groceries, “putting an added financial burden on hardworking families who are already seeing rising costs.”

Anti-immigration rhetoric also affects the workforce in New Mexico.

Immigrants in New Mexico are filling workforce gaps in laborious fields, like agriculture and construction. It would be like “taking a pistol and shooting ourselves in the foot” to make the U.S. an unwelcoming country for immigrants, Pacheco said.

“You can come out here in the summer, down at the border, and it's 107 degrees, and you will hear people speaking Spanish on top of a roof that they're repairing, and I imagine it's a pretty good guess that those are immigrants,” he said.

Communities like Santa Teresa that are nearly entirely made up of Hispanic or Mexican-American populations, making immigration a particularly sensitive issue, Pacheco noted.

Still, Trump’s campaign heavily catered to the Hispanic vote, and the president-elect saw record gains compared to four years ago when he ran against President Joe Biden.

CdeBaca said he thinks people are going to start paying a lot more attention to the Hispanic and Latino vote “because it’s growing like crazy.”

He said Hispanics are not only growing the nation’s voter base but also its economy. CdeBaca referenced Trump’s visit to New Mexico, when the then-presidential candidate polled the audience on if they preferred the term Hispanic or Latino.

“I think the first 100 days are going to be very interesting to see what really happens,” CdeBaca said. “It's kind of hard to gauge, because he's made so many promises, and so many things that are so difficult to do and some that are supposedly out of his control.”

Pacheco also said port infrastructure needs to stay modernized to keep up with cross-border trade demand.

“We think it's a no-brainer because trade with Mexico is skyrocketing. Mexico is our No. 1 partner, not just for the United States, but for New Mexico.”

Oil and gas

‘Drill, baby, drill.’

Trump has heavily leaned on that 2008-era Republican campaign slogan. But what does it actually mean for New Mexico, the nation’s second-largest oil producer?

Probably not much, according to Jim Peach, a former economics professor emeritus at New Mexico State University who has been watching the oil and gas industry for decades.

The U.S. federal government doesn’t drill for oil, Peach said, unlike other countries; that’s up to the private industry. And much of the federal land in the Permian Basin — one of the best spots in the world for oil exploration — is already leased. It’s also not in the best interest for the oil industry to drastically increase the supply of oil in the current market, Peach said, where increased supply would lower prices and hurt the industry.

“‘Drill, baby, drill’ is not going to happen. I'm pretty confident with that,” he said.

While production might not ramp up as a result of Trump’s presidency, there are a few other concrete things that could happen. Peach pointed to the likelihood that Trump will open up the Alaska National Wildlife Refuge to drilling and weaken or even eliminate fees oil and gas companies have to pay for releasing methane into the atmosphere, a practice known as flaring.

Even then, Peach said it’s not like operators brag about the practice.

“I'm not pro-industry. I'm not anti-industry. I just don't know anyone who just loves to flare gas. It is clearly not only environmentally damaging, it's a waste of an economic resource,” he said.

On a state level, the oil and gas industry has long been a major player in state government, as it contributes around 40% of state revenues in oil boom periods. But with almost the same political makeup of the Legislature, Peach said he doesn’t think much will change in terms of policies and regulation over the fossil fuel industry.

In recent years, policymakers have failed to pass a variety of stricter oil and gas regulations. In 2024, proposals for changes to the Oil and Gas Act and to raise royalty rates both died, the first of which didn’t even make it to the floor.

“I'll end with, don't worry about ‘drill, baby, drill’ because we don't know what on earth that might mean,” Peach said.