Albuquerque Journal business columnist Winthrop Quigley recently wrote about New Mexico’s flawed economic structure in the paper’s business section.
While I often disagree with Quigley, he makes some good points in the article. Nonetheless, as I wrote in my published letter below, policymakers have the power to make needed changes that will turn New Mexico around by attracting private sector businesses to the state.
Winthrop Quigley is spot-on in stating that New Mexico’s Economic Structure is Flawed in his recent article. There is no doubt that the state is too reliant on federal, state, and local government, nor can it be argued that – important as they are to the economy – it would be great to diversify beyond our mineral riches as a means of bringing money into the state.
History, as Quigley writes, plays a major role, but so do our poor educational system and government tax and regulatory policies. The onerous and misunderstood gross receipts tax which includes a wide variety of services and business inputs that are not taxed in other states is one obvious factor.
Governor Richardson seems to have been of two minds on economic development. On one hand his initiative led to dramatic income and capital gains tax cuts, but he also wasted money on the heavily-subsidize Rail Runner, film industry, and Spaceport, all while seemingly doing everything in his power to chase the oil and gas industries out of state.
History and geography indeed loom large, but other lightly-populated states have overcome these problems – like New Hampshire and Wyoming, to name just two. Governor-elect Martinez cannot change the equation overnight, but by balancing the budget with no tax hikes, creating a system of reasonable regulations, and dramatically re-vamping New Mexico’s K-12 system, she’ll be moving us a long way toward the balance that Quigley (and the rest of us) desire.