Gambling On Good Jobs Economic Development in New Mexico During the Richardson Years

1. Gambling On Good JobsEconomic Development in New MexicoDuring the Richardson Years Prepared by: Eric Griego Executive Director, NM Voices for Children

2. “Governor Richardson created 80,000 new jobs in New Mexico…..” President Elect Obama at Richardson’s nomination for Commerce Secretary

3. Any Job is Good? • What kind of jobs? • At what cost to taxpayers?

4. Kenny Rogers “The Gambler” "You gotta know when to hold em. Know when to fold em. Know when to walk away. And know when to run."

5. The Three Legs of the Economic Development Stool Recruitment Expansion/Retention Start Ups

6. Low-Cost Destination? Number one lowest "overall cost of doing business."      North American Business Cost Review & Economy.com Energy Costs 5 % below national average and 19% below regional average.      Department of Energy 14th least expensive state for worker’s compensation.      Business Facilities Magazine

7. Doubling Down on Incentives • New Mexico has more than doubled the number of tax incentives in the last five years • More than 30 new tax incentives • Direct State Investments • Job Training Incentive Program • Local Incentives

8. Conservation and Historic Preservation Tax Credits • Advanced Energy Tax Credit (2007) • Agricultural Water Conservation (2007) • Alternative Energy Product Manufacturers (2007) • Biodiesel Blending Facility (2007) • Blended Biodiesel Fuel (2007) • Cultural Property Preservation (2007) • Land Conservation Incentives (2007) • Renewable Energy Production (2007) • Solar Market Development (2006) • Sustainable Building (2007)

9. Industry Incentive Tax Credits • General Industry • Business Facility Rehabilitation (1994) • Electronic Card-Reading Equipment (2001) • High Wage Jobs (2007) • Intergovernmental Business (2001) • Investment Credit (1991) • Small Business Research and Development (2005) • Rural Job (2005) • Services for Resale (‘Pyramiding’) (2005) • Technology Jobs (2000)

10. Industry Incentive Tax Credits • Specific Industry • Advanced Energy (2007) • Affordable Housing (2005) • Biodiesel Blending Facility (2007) • Double Local Option • Film Production (2005) • Hospitals Gross Receipts • Laboratory Small Business Partnership (2007) • Unpaid Doctor Services (2007)

11. Employment Enhancement Tax Credits • Corporate-Supported Child Care • High Wage Jobs • Investment Credit • Job Mentorship (2003) • Rural Job • Technology Jobs (2000) • Welfare-to-Work

12. Direct State Investment State Investment Council invests state funds in new and expanding companies and projects (films) State provides infrastructure funding for roads, water lines, airports, Spaceports, rail lines, etc. Tax Increment Financing

13. Job Training Incentive Program (JTIP) $20 million annual fund Pays up to 80 percent of new employee salaries Up to six months

14. Local Incentives • Industrial Revenue Bonds • Local Economic Development Act (LEDA) • Infrastructure

15. Recruitment vs. Start Ups “Do you want to raise horses or steal horses?” Ernesto Sirolli, Ripples on the Zambizi

16. “Roll will ya! Roll will ya!! What’s the matter roll the dice!!” Guys and Dolls Chorus

17. Winners and Losers A Few Gambles We’ve Taken Eclipse Aviation Spaceport America The Film Incentive Program Solar Energy

18. Eclipse Aviation • Light aircraft manufacturer • Received $20 million in state investment • Millions in infrastructure subsidies, JTIP • Filed for bankruptcy • State loses

19. Spaceport America • Space Tourism Industry Launch • State paying for all infrastructure • Virgin Galactic to launch from site • $200 million in state and local investment • Is it a winner? TBD….

20. Tamalewood – Film Industry • Dozens of major films shot in New Mexico • Industry literally built from scratch through incentives • $300 million in state loans • $2 million per year in JTIP • Tax breaks for production companies • Winner? Maybe.

21. Solar Successes • Advent Solar • Hundreds of good manufacturing jobs • Tax credits • JTIP • Not used locally • Schott Solar • Hundreds of new high wage jobs • Incentivized through TIF, JTIP, etc.

22. Challenges to Good ED Policy • Political/Electoral Timeframes vs. Long term investments • Need for “Announcements” • State-on-state competition • Lack of ongoing independent evaluation and analysis

23. Balance Three Legs of Stool • Retention and Expansion • Incumbent worker training programs • Invest in local companies • Change laws that disadvantage local businesses (i.e. MCR, TIF) • Start ups • Incubators • Financing • Work supports • Tax policy

24. Long-Term ED Investments • Early Childhood • Education • Healthcare • Workforce Training • Infrastructure • An so on

25. Gambler’s Closing Thoughts • “Every hand’s a winner. And every hand’s a loser. The best that you can hope for is to die in your sleep.”