I recently attended a presentation by the Federal Reserve Bank in Albuquerque. At the event, this very informative powerpoint presentation was given. As the presentation illustrates, New Mexico is one of two states to have lost a significant number jobs over the past year (coal-reliant West Virginia being the other). Here is the data in another format.
Why is New Mexico lagging? As the charts on pages 7 and 8 of that report illustrates, New Mexico is over-reliant on Washington as a basis of its economy. And, with the recognized need for Washington to start to reverse spending growth, the decline in federal spending is going to hit New Mexico especially hard.
Not to be one to say “I told you so,” the need to diversify our economy away from the federal government was a topic of RGF back in 2007. It is time for policymakers to realize that the Washington gravy train has left the station. It is time to adopt proven, free market policies that will make New Mexico attractive to businesses.
Obviously, there are different visions for our economy, but I’ll put our ideas up against anyone else’s in terms of proven effectiveness.
6 Replies to “New Mexico’s fiscal cliff”
I agree that New Mexico is over reliant on Government spending and anytime there are budget cuts then New Mexico will suffer. Why? The top 12 employers in New Mexico are directly State or Federal employed. State programs are heavily subsidized by Federal Programs. Of the top 200 employers in the state over half are directly funded by the government, that is government contractors, schools, staffing companies for these contractors, etc. The federal government owns 42% of the land in New Mexico. Land that cannot be used for producing products that produces taxes. That alone will keep the state on the Federal dole. In 2005 the federal government spent $2.03 on New Mexico for every dollar of tax revenue collected from the state. This rate of return is higher than any other state in the Union. http://nmnetlinks.com/cms/kunde/rts/nmnetlinkscom/docs/1044065435-01-19-2011-18-16-39/xls_upload.htm This statistics make New Mexico look like a leach on the union. So I agree. The state’s economy is directly linked to the federal government.
Our State and Federal governments are broke! They must slash spending. New Mexico’s employment and income should drop.
My question is when will New Mexico stop trying to keep up with the Jones’? If you have flown over New Mexico you will see we are devoid of many resources that other states have, mainly water. Sections of the Rio Grande are completely dry now in the summer months (go south to Belin or San Antinio) In Placitas and Rio Rancho the water companies are having to get Federal exemptions for arsenic quantities in their drinking water. We have to go on water rationing. Seeing golf clubs spray their greens while the farmers are on water rations makes no sense at all. Farmland around the rivers are being developed for other than farming purposes. That would be fine except there is no other land in the state suitable for agriculture. With the flood control on the rivers, organics and chemicals are having to be introduced to the land which can be a pollutant to the existing water sources when the rains do occur.
Why not accept that New Mexico is an Agriculture and Tourist state and that is something to be proud of. Our ranchers and farmers maintain the heartland values of the country. We have some of the oldest archeological sites in the country, many of which, are not made available for public viewing. We do not have vast mining resources, ports, or the traffic or pollution (including light pollution) that comes with them. Mining and Oil and Gas Extraction only amounted to $1.2 Billion in 2004 and Manufacturing $0.9Billion. So why not accept what we are? Why not enjoy the stark beauty of the state and its heritage. Why not be one of the only states in the union where one can go and see the Milky Way. We do not need golf courses, lit skyscrapers, or jets flying overhead every minute. Lets become self-reliant and a place where hard work will produce a rich quality of life with friends and family. We will never be New York, Seattle (that I left), or Los Angeles (thank God). Think about it. Why do so many people want to come here from California?
My thoughts exactly sir. Thank you and am in agreement.
You think its bad now wait till the new compulsory unemployment law kicks in. More unemployed and more crime. Life is beautiful…Too bad our constitution doesn’t prohibit laws that increase the crime rate, not to mention take away our freedom to seek employment.
Agriculture? What percentage of productive farm land would still be productive without the water to irrigate? Range land – yes; tourism – yes; manufacturing – yes;, natural resources – yes; farming – no. Irrigation requires too much water here in the desert. We must use this limited, vital resource wisely.
I feel there is no wiser use of water than agiiculture as it supports life. Manufacturing does not. The farming may be limited to natural rain and snow fall as it is true our population has decimated the water tables. Water is indeed one of the limiting factors on our population
This is a silly point. No offense, but while food is certainly important, that does not mean that we have to grow what we consume here. New Mexico is clearly a dry place. We need to let the market (the combined decisions of billions of free people) determine what the highest and best uses of our resources are. Otherwise, we’ll wind up subsidizing activities that harm the environment and make us poorer in the process.