NEW MEXICO’S ECONOMIC RECOVERY
NEW MEXICO’S ECONOMIC RECOVERY
Turning New Mexico around requires a fundamentally different approach. State government has been greedy and indulged at taxpayer expense. We hear daily about the challenges we face in turning things around in New Mexico. The Richardson-Denish Administration indulged at taxpayer expense during the good times, and is now turning to taxpayers again to feed their insatiable appetite for bigger government. The result … lost jobs, huge budget deficits, and investment driven out of state. New Mexicans cannot afford another four years of the failed tax, spend and waste policies. It is time for real change in New Mexico.
End Corruption
For too long we have accepted pay-to-play politics as the way of doing business in New Mexico. It hurts our schools, our businesses, and leaves taxpayers holding the bill. Rooting out corruption starts with leadership and setting the tone for the state. We can also challenge corruption by passing common-sense legislation backed by real penalties:
n Eliminate the practice of using “finder’s fees” and contracting consultants by state contractors.
n Increase transparency in the procurement process by improving the state procurement website where all information regarding the state procurement process, including current contracting opportunities and information about all awards will be posted and make the site more user-friendly. Current state contracts need to be posted online immediately after awarded, not only at the end of the fiscal year as is the practice today.
n Year-round “real time” campaign reporting of contributions and mandatory e-filing of disclosure documents for public officials and lobbyists.
n Require random audits of political campaigns to ensure finance reports accurately reflect actual contributions received and expenditures made.
n Revamp our ethics laws. We need to eliminate conflicts of interest and enhance transparency so that public officials conduct the work of the people without the potential for personal gain or reward.
Eliminate Waste
The Richardson-Denish Administration has grown state government over 50% during their time in office. There are now 24.5 state employees for every 1,000 New Mexicans, which far exceeds the national average of 14.3 per 1,000 (source: Albuquerque Journal, “No Contest: Leaner State Beats Tax Hikes,” 1/17/10) . What we are left with is a bloated, inefficient government staffed by political appointees interested in securing personal advantage. Here is what we must do:
n Reduce or eliminate many exempt positions in state government. Greater reliance on merit, qualification, and experience to be factors in the hiring of state government positions.
n Create an on-line check book where voters can access state spending records in real-time and easily search the database.
n Reform the capital outlay program to ensure greater planning, efficiency, coordination and prioritization. Today’s capital outlay program is plagued by waste and inefficiency, used to further expand government and reward political insiders.
During times of economic stress, capital outlay money can be utilized to create economic activity and jobs. We need to set better priorities at the executive level to direct the use of the people’s money.
Make New Mexico Competitive
If New Mexico is going to grow our economy, we have to have a hospitable business environment for people to live, work, and invest. States that tax more are suffering more in these difficult economic times – California is a prime example, with one of the highest tax rates in the nation and ranked one of the worse states to do business. Texas, on the other hand, has lower taxes and leads the nation in job growth.
Today, New Mexico ranks 13th in the nation in taxes collected per capita – our neighbors Arizona, Colorado, and Texas rank 39th, 40th and 47th, respectively (source: The Tax Foundation, State Tax Collections per Capita, 2008). The first place for government to go should never be the taxpayers’ pockets when there is a state budget shortfall.
n Restrain government spending. Spending cannot grow faster than the rate of inflation and population growth. We cannot continue to expand our state budget on the backs of working families. This requires every state agency to provide aggressive plans for reducing costs and promoting efficiency. We need to look for ways to make government work better, not make it bigger, while funding critical priorities such as education and public safety.
n Phase out job killing taxes. We must reform New Mexico’s tax structure by identifying and eliminating taxes that stifle job growth. Just imagine where New Mexico would be today, if our leaders had used surplus tax dollars to eliminate these taxes rather than spending them on new government programs that grew government by 50%.
New Mexico taxes 158 business services – only six other states tax more than 100 services. Our neighboring states do not tax services at all. One consequence is that many business-to-business transactions are taxed in New Mexico, a procedure termed “pyramiding.” This practice increases overhead for New Mexico businesses, and may put them at a competitive disadvantage relative to other states, while leaving less revenue to expand and create jobs. This also has a more significant impact on small businesses, making it more difficult to compete with larger companies. Many times, the cost of this pyramiding is passed on to consumers in the form of higher prices.
n Eliminate the “Back Door” Personal Income Tax increase. This backdoor tax increase passed this year went virtually unnoticed. Families and businesses filing an itemized return at the individual rate will see their state income tax bill increase because the taxes that are deducted for federal income tax purposes will no longer be deductable for state income tax purposes. This backdoor tax will negatively impact New Mexico middle class families.
n Lower taxes on individuals and families. If New Mexico is to remain competitive, our elected leaders need to worry as much about family budgets as they do the government’s budget. With an economic recovery and a strong business sector, we can work to reduce individual taxes.
n Invest in local business. New Mexico businesses should have a real advantage in the contracting process so we are building and supporting our own companies. This means eliminating loopholes that allow out-of-state contractors to qualify as “in-state” when bidding on public projects. Another avenue is through community banking. Today, New Mexico invests its money mainly in large multi-national banks. We should look to keep more of that money in-state, and perhaps increasing liquidity and loan opportunities for New Mexico communities.
Reviving our Energy Sector
New Mexico has a significant opportunity to position our state as a leader in the energy sector. The more diverse our energy portfolio, the stronger we will be as a state and a nation. New Mexico is 2nd in the nation in natural gas production and 6th in oil production in the lower 48 states (source: NMOGA). We also have substantial other resources, including our mineral assets that are part of our strategic economic future. The Richardson-Denish Administration has put these sectors at significant risk with unnecessary and burdensome regulations and closing of lands to mineral exploration, chasing away jobs and businesses to other states. We can be mindful of our environment and resources, but equally as diligent about creating business and job opportunities.
n Reverse the pit rule. This scientifically unnecessary regulation imposes an additional cost of $250,000 per well in New Mexico. New Mexico was the only state in the nation to see a drop in gas production last year, as business fled to other states.
n Encourage energy producers to invest in new technology. By reducing unnecessary and costly regulations on energy producers we can encourage them to invest in new technology that will provide additional environmental protections.
n Oppose cap and trade legislation. The Richardson-Denish Administration has long been proponents of a regional cap-and-trade agreement that would impose a new energy tax on businesses and families in New Mexico. But even neighboring states like Arizona and Utah who would be part of the regional agreement have already signaled their intention to not participate. New Mexico would again position ourselves as anti-business and be distinctly disadvantaged in comparison to our neighbor states.
Improving the Business Climate
If New Mexico is truly “open for business,” we need to send the right signals that this is a welcome and hospitable environment for businesses to put down roots.
n Tort reform. New Mexico was just named a “Judicial Hellhole” by a national organization that monitors frivolous lawsuits. We must end lawsuit abuse, so businesses are not sued out of business.
n Encourage expansion and reinvestment. Companies that reinvest in their companies in either personnel or equipment should receive a tax credit for helping to stimulate our economy.
n Streamline and expedite state government loan programs to small business. Through various state programs, start-up funding is available to small businesses. We can streamline the process to ensure efficient and timely delivery to help jump start our economy.
n Customer-friendly business permitting and licensing. It should not take two years to get the necessary license in New Mexico. We need a more efficient process to get business’ their licenses so they can open their doors and revitalize our state. State government must be mindful that time is money for small businesses.
n Reform our education system. New Mexico has languished in the basement nationally in academic achievement for years, with no improvement made during the Richardson-Denish Administration. Reforming our education system requires a different mindset that rewards good teachers with merit pay, cuts waste from the education bureaucracy so more money goes to the classroom, expands parental choice so every parent can send their child to a quality school, and enhanced truancy programs to reduce the dropout rate. I also support reinstating vocational opportunities in high schools so every New Mexico student has the opportunity to learn critical workplace training and skills.
Times of stringency are optimal for new thinking and breakthroughs. It is an opportunity to innovate, to create, to take simple steps that cost nothing at all, but can pay big dividends in the future.
