Winners and losers in economic development

by Staff | April 8, 2011 | Filed under: Opinion

In legislative post mortems, we’re hearing that the economy wasn’t much of a priority this year for either party.

Not necessarily so. Economic development bills may have been overshadowed by bigger dramas, but some good bills made it to the governor’s desk; others were impaled on ideology and ignorance.
The most obvious winner this year was the locomotive fuel tax credit to help Union Pacific Railroad create its $400 million rail hub in Santa Teresa, a project mothballed since 2007 by the economy. A slam dunk, you might think, but no.
Sen. Cynthia Nava, one of the state’s most able lawmakers, was steering the bill through a floor session when two of her fellow Democrats tried to “improve” the bill by adding encumbrances. Sen. Stephen Fischmann, overly concerned about any benefits to Texans, argued against Nava, his fellow Las Crucen, even though he well knew what the project means for southern New Mexico.
In a committee hearing, Sen. John Arthur Smith, of Deming, dismissed such arguments: “For those of us who live down there, El Paso has taken care of our charity cases for years. We can’t ignore what Texas had done in accepting our patients. We’re extremely dependent on El Paso, and they’re somewhat dependent on us.”
Nava dodged the amendments and the bill passed.
Sen. Tim Keller got three economic development bills through to tighten state contract preferences in favor of New Mexico contractors, order a study of state incentives, and require state government to buy a minimum amount of food from New Mexico producers and processors.
Keller’s streak ran out on the Red Tape Reduction Act. In New Mexico, the only state without a uniform Administrative Procedures Act, each agency has its own way of making rules. This bill, by Keller, an Albuquerque Democrat, and Rep. Tom Taylor, a Farmington Republican, would have standardized state rule-making.
On the Senate floor, Sen. Rod Adair, a Roswell Republican, successfully amended their bill to eliminate the state cap-and-trade program, and Keller killed the bill rather than upset a painstaking compromise between industry and environmentalists, to the consternation of the governor and lawmakers. Adair won the battle but lost the war.
In general, regulatory streamlining fared poorly, despite being a priority for both the governor and the interim Economic and Rural Development Committee. Dead committee bills would have required agencies to respond to permit applications within certain time limits, allowed a majority vote of both houses to nullify administrative rules or regulations, and mandated impact statements for new rules.
Two novel economic development bills survived. One by Sen. Carroll Leavell, a Jal Republican, makes algae eligible for the alternative energy product tax credit.
Another creates a specialty license plate for golfers, with $25 of the $35 cost used to promote golf tourism. Sen. Mary Jane Garcia questioned the need. The Las Cruces Democrat apparently doesn’t know any golf nuts or realize that the tourism industry brags, justifiably, on our golf courses. She also complained about the amount of water they use, but most are either Arizona-style, desert courses or use municipal gray water.
The Economic Development Department had two wins and one loss. Small businesses have another two years to claim the research and development tax credit. The same bill failed last year, and Economic Development Secretary-designate Jon Barela asked the sponsor to try again. The second sustains the popular New Mexico 9000 program, which will, for a fee, provide training in quality standards. Another Barela-backed bill, to extend the Angel Investment Tax Credit to 2015, died. How foolish! This credit for individuals who invest in startups has been hugely successful.
Another disappointment: The Senate inexplicably failed to confirm the well respected Barela. Because the governor has no experience in economic development, much rests on Barela’s shoulders. Let’s hope for something new. Something bold, even.