LEDA: Hard Cheese for Taxpayers


Southwest Cheese Company, “one of the largest and most successful cheese and whey protein manufacturers in the world,” set up shop in Clovis a decade ago. It’s expanded operations twice, and is planning to do so again.

Great news, right? Well, yes and no.

Last week the Clovis News Journal reported that city commissioners “passed a measure clearing the way for a $350,000 grant to help fund the third phase of the Southwest Cheese plant expansion effort.” The money is funded through the Local Economic Development Act (LEDA), which the state claims¬†“allows public support of economic development to foster, promote, and enhance local economic development efforts while continuing to protect against the unauthorized use of public money and other public resources. This empowers communities to embark on economic development projects tailored to their LOCAL needs.¬† In essence, LEDA is used to enter into a ‘public private partnership’ for an economic benefit.”

But LEDA’s “benefits” have been tough to verify. According to the Legislative Finance Committee, “the state does not receive sufficient reporting from businesses using tax incentives and [LEDA] funds to properly evaluate these programs. As a result, it is impossible to determine the relative effectiveness and cost-efficiency for these programs or to determine if they provide a positive or negative financial return for the state. It is also impossible to evaluate if these programs act as rewards for job creation that would have occurred absent the incentives. [The Economic Development Department] reported fewer jobs in FY15 than in FY14 despite spending about twice as much in LEDA funds.”

That’s public policy in New Mexico — revenue flows to programs and “incentives,” with rarely any analysis of return on “public investment.” Whether it’s lottery scholarships or preschool or “job creation,” taxpayers lack evidence that their dollars are wisely spent. Isn’t it time to do something about that?