What New Mexico business leaders are pushing for in the 2024 Legislature

If you’re not growing, you’re dying.

That’s the mentality New Mexico business leaders are taking into the 2024 Legislature as they strive to pull more companies and projects into New Mexico and keep them here.

These business and industry officials are pushing for bills and budget items they say would boost New Mexico’s business community and the state’s economy.

Karl Smith is the NAIOP, formerly known as the National Association for Industrial and Office Parks, board president and vice president of new construction with Pavilion Construction. He said he often hears from people who haven’t done business in New Mexico that barriers exist to setting up shop or getting work done here.

New Mexico needs to welcome good projects in, he said, whether they’re industrial, commercial or residential. He and other business experts think the 2024 legislative session, which begins Tuesday, can help do that.

“We, as the business resource community, want to make sure that New Mexico increases its relevancy and increases the desirability of companies to come work here,” Smith said.

Timelines and transparency

NAIOP, a commercial real estate development association, wants the Legislature to clarify timelines in development processes.

Smith said as part of the entitlement process, developers have to submit information to municipalities or other entities before officials authorize the work.

The issue is the lack of a clear timeline for municipalities or other entities to review the information and get back to developers working in New Mexico, he said, which makes it difficult to plan a project.

Smith said a bill in the 2024 session would allow developers to get results in a more predictable fashion, though a specific timeline hasn’t been hammered out yet. Texas passed a similar bill that went into effect in 2019, requiring cities and counties to act on some site development plans within 30 days.

“It doesn’t mean that you’re going to like the information. It doesn’t mean that you’re going to have a positive in your point result,” Smith said. “But at least you’ll know where you stand.”

The bill hadn’t been filed as of Thursday afternoon, and Smith said the business association is trying to get it on the governor’s call for this session. A similar bill died in the Legislature last year, and Smith said it was broad in its definitions section.

It’s a regulatory effort the New Mexico Chamber of Commerce also supports. CEO and President Rob Black said he wants a bill passed like the one that died in 2023 that would require state agencies to publish twice a year the average time it takes to reach a decision on permit or license applications.

“We believe that sort of transparency starts to help people understand where barriers happen,” he said.

Black, too, said he isn’t sure if it’ll get on the governor’s docket.

He said this legislation also would show state agencies where they need better management practices, more human resources or better technology.

“Let’s figure out as the state how to improve these processes so that we can again move economic development faster,” Black said.

Something else Smith said can slow down work is a lack of staff at municipalities or governing bodies able to quickly, physically review development projects. So another one of NAIOP’s priorities is a bill that would legally allow third-party reviewers to come look at a project, he said.

“It speeds it up in the sense of, ‘OK, if I call on Tuesday, I know on Thursday I’m going to get somebody there to look at what I need to do to be able to hit the next step of my project,’” he said.

Smith didn’t specify if this bill would be on the governor’s call.

“With a 30-day session, obviously it’s a lot of stuff that has to go on very quickly,” he said.

Taxes and investments

The New Mexico Chamber of Commerce, Albuquerque Regional Economic Alliance and NAIOP want to see continued investments in the Opportunity Enterprise Act and its revolving fund that provides financing for building or renovation projects.

Black said the creation of labs or affordable housing, which the fund could finance, are important to sustain long-term growth and diversification in the state.

“We believe that continued investment in that and growth in that is really important for strategic investments in New Mexico’s economy,” he said.

Daniel Casey is the president and CEO of the Albuquerque Regional Economic Alliance. She said as a 501(3) organization, AREA doesn’t lobby in the Legislature but supports initiatives that will help attract more businesses to New Mexico’s market, like the Opportunity Enterprise fund.

She said continued funding will help make a difference, especially in rural New Mexico.

“It’s one of many creative tools that really needs to be supported, because clearly there was positive response and it’s been impactful,” she said.

Smith agreed.

“In general, I would say the capacity to be able to go out and bring more business, advocate for business and state economic growth is a very high and always has been a very high priority for NAIOP,” he said. “And I think that the Opportunity Enterprise Act does that.”

Terri Cole is the CEO and president of the Greater Albuquerque Chamber of Commerce. She said her Chamber supports tax relief for families and businesses.

So does the New Mexico Chamber of Commerce, Black said, providing some specific tax agenda items his team is pushing for.

He said the New Mexico chamber wants an extension of the Angel Tax credit, a 25% tax credit investors can apply to angel investments that expire at the end of 2024.

“That will be a top priority for us to extend that tax credit to keep private investment going into those companies here in New Mexico,” Black said.

Rep. Linda Serrato, D-Santa Fe, introduced the legislation last week. Lawmakers tried to pass a similar measure last year that would have pushed sunset to 2030, but the bill died in committee.

Additionally, Black said the New Mexico Chamber would love to see an effort around business-to-business gross receipts tax pyramid reform, though he said a draft hasn’t been produced yet.

He said it’s something that would help small businesses, which are suffering with the tariffs on business-to-business services.

For example, he said, a small business pays full gross receipts taxes when hiring an in-house lawyer or accountant to do taxes but a big company that has those services in-house doesn’t have to pay that tax.

“We would like to see additional targeted reform around that, that really benefits small businesses,” he said.

Infrastructure

Casey, of Albuquerque Regional Economic Alliance, said one of the big challenges in the market nationwide right now is site readiness. She said there are large federal incentives for reshoring and a big push nationally in manufacturing, but nobody has sites that are ready because the infrastructure isn’t ready.

Addressing that is one of AREA’s top priorities. Casey said first, AREA is advocating for New Mexico to conduct a study of the top 50 or so large-scale sites in the state to figure out the best use of those sites, and how to estimate a timeline and cost of setting up public infrastructure there.

“Then, later on, hopefully that’ll help the state figure out where they can prioritize resources and funding to get infrastructure in the ground,” she said.

Casey said lawmakers introduced a bill along those lines last session, which helped get the conversation started, even if it didn’t pass. She said there’s a finite period of time with what’s happening with manufacturing operations and growth in the country to use these one-time revenues to leverage New Mexico’s strengths nationwide.

“If we take a little bit of risk and march out with some ideas that can bring some return for us, that’s our opportunity … to leapfrog ahead,” she said.

Black said an infrastructure matter the New Mexico Chamber of Commerce is focused on is the strategic water supply Gov. Michelle Lujan Grisham wants to set up. The governor wants to appropriate $500 million from severance tax bonds to set up a strategic water supply, which would provide resources for water-intensive processes, like creating green hydrogen.

Black said the Chamber supports this initiative, especially in a state that has federal labs and facilities with the ability to research water preservation efforts.

“Water infrastructure, we believe, is incredibly important for the long-term economic development opportunities in the state,” he said.

There are also education and crime initiatives Black and Cole said they support that will help the business community.

Opposition to bills

Black said New Mexico is excelling in different areas, like the boost in green hydrogen research and development and an increase in its working-age population over the past few years, but the state needs to keep up with that. Despite the recent working-age population increase, New Mexico still sees a flat population growth, which Cole and Casey noted.

“(We should be) finding the right balance of growth to sustain us and really make this a place that our kids don’t want to leave, that they see career opportunities,” Casey said. “Or at least if they’re gone for a few years, we can lure them back with great jobs, opportunities and a reason to come home.”

Black said he’s worried New Mexico officials are doing things that undermine the state’s economic competitiveness.

He said there are discussions around raising income tax on high-wage earners while the state has a record surplus. Black said that would primarily tax workers like doctors and nurses — “professions that we are already having a terrible time retaining.”

“Do we really want to increase taxes and make it more expensive to be a doctor in New Mexico?” he said.

He said an unsustainable health care system will undermine everything else in the state.

Another bill that’s raised contention is the Paid Family and Medical Leave Act, which Sen. Mimi Stewart, D-Albuquerque, and Rep. Christine Chandler, D-Los Alamos, introduced Wednesday. The legislation would allow people to take up to 12 weeks of paid time off work for family and medical purposes.

It’s a bill that’s failed to make it through past legislative sessions.

Black said a piece of legislation like that has a good intent but unintended consequences, taxing service providers who can’t raise their rates.

“It’s those sorts of things that undermine — again, with best of intentions — but undermine the business environment for those industries,” he said, “which undermines the broader safety net which undermines our ability to be competitive with other states.”

He said the state needs to diversify and grow its revenue, which is largely dependent on an oil and gas industry that will produce less in the future. Adding taxes on businesses and employees won’t make the state more competitive, he said.

“We’re always worried about initiatives, efforts that take away from our ability to compete for investment and growth in this state,” Black said.

The 2024 prefiled legislation proposes businesses with five or more employees start contributing to the fund starting in January 2026.

Smith said NAIOP doesn’t have an official stance on the medical leave bill, but this year’s bill seems more tempered than last year’s.

As to what bills NAIOP opposes, he said the organization doesn’t support a home rule law change that would allow for rent control.

“We oppose that. I’ll leave it at that,” he said.

Cole said the Greater Albuquerque Chamber of Commerce would propose rejecting any measures that would make it harder to produce energy. She said the Chamber embraces an “all of the above” approach, keeping in mind how the economy remains heavily dependent on oil and gas production.

She said the Chamber also will oppose any policies that would make it harder or costlier to do business in New Mexico.

Casey declined to comment on any bills AREA opposes, since formal opposition for a 501(3) requires a board vote that hasn’t happened yet.

The 2024 Legislature starts Jan. 16 and ends Feb. 15.