Earlier this week the Albuquerque Journal chronicled the New Mexico Association of Commerce and Industry’s “priorities for the 2018 legislative session.” The organization’s list offers another opportunity to note the important distinction between policies that advance economic liberty and promise to boost employment, and policies that grow government and reward favored industries.
ACI wants to make “state air quality regulations consistent with the National Ambient Air Quality Standards,” so that the Land of Enchantment is “competitive with other jurisdictions and alleviate unnecessary compliance costs.” Good idea, as is the passage of a right-to-work law and an overhaul of the state’s tax structure.
But three of ACI’s priorities are disturbing:
* More funding for the Job Training Incentive Program, Local Economic Development Act, and Rapid Workforce Development Program is unwarranted. The third of these “incentive” programs is rather new, but the first two are problematic at best. The Legislative Finance Committee has reported that “the state does not receive sufficient reporting from businesses using … Local Economic Development Act … funds to properly evaluate” the program. Thus, “it is impossible to determine relative effectiveness and cost-efficiency” of the program. As for JTIP, in the current fiscal year, the state has chosen to “discontinue reporting the numbers of businesses participating … as well as the percent of employees whose wages were subsidized … still employed in New Mexico after one year.” Why?
A recent analysis by the Upjohn Institute for Employment Research found preliminary evidence that “a state’s incentives are not highly correlated with a state’s fortunes. Incentives do not have a large correlation with a state’s current or past unemployment or income levels, or with future economic growth.” Clear-headed policy analysts have concluded the same for some time. New Mexico needs to work on economic-development fundamentals, not gimmicks that show little or no return on taxpayer “investment.”
* ACI clings to the belief that the state’s two national labs should be subsidized “to create and continue community programs, particularly those focused on technology transfer.” After eight decades of hoping that Los Alamos and Sandia will transform New Mexico into a STEM powerhouse, isn’t it time to admit that federally funded science isn’t much of a catalyst for tech-related economic expansion here?
* “Securing full funding for the state’s Medicaid system” is an inexplicable, and terribly disappointing, priority. As the Rio Grande Foundation has documented again and again, expanding “health insurance for the poor” has been a fiscal debacle for New Mexico. In addition, access to and quality of care are weak, and the state’s subpar workforce-participation rate isn’t aided when welfare programs grow more generous.
So ACI’s agenda is a mixed bag. The organization is gutsy to stand for several liberty-oriented policies, but can’t seem to get beyond a number of corporatist schemes. Let’s hope it applies most of its lobbying muscle to the former, not the latter, in 2018.
New Mexico’s private sector is underdeveloped, and chamber-of-commerce groups may not represent the kind of businesses New Mexico needs to attract. A quick check of ACI’s executive committee and board of directors suggests the group is skewed toward healthcare, utilities, and financial/legal/accounting services.
Because the healthcare industry is overrepresented, its no surprise that medicaid advocacy is on the agenda.
We saw a similar pattern when business supporters of the ART project included developers who favor subsidized development.