Responding to critique of RGF’s views on economic development

Syndicated columnist Harold Morgan writes a column that appears in smaller papers throughout the state. In it, he called me a “sinner” for arguing that “New Mexico doesn’t attract businesses.” The following is my response which appeared in several papers:

I have to take issue with Harold Morgan’s assertion that I’m a “sinner” for stating that “New Mexico doesn’t attract business.” I said (or wrote) no such thing. Rather, New Mexico’s public policy regime is not particularly attractive to entrepreneurs.

Businesses will indeed locate here for a variety of reasons, most commonly government incentives. This includes the Bendix/King “success” Morgan mentions. The state’s press release on the company explains that the company will receive support under both the “High Wage Tax Credit” and “Job Training Incentive Programs.”

This may sound like a great victory for taxpayers, but it actually reinforces my point that our tax and regulatory climates are not competitive. So, in order to attract companies to our state, our political leaders need to provide incentives.

But, politicians don’t have the foresight to know if a particular company will succeed. Think of Eclipse Aviation which lost $19 million in taxpayer funds. Schott Solar lost another $16 million recently.

On the flip side, how many visionary New Mexico politicians had the foresight to offer incentives to a young Bill Gates and his colleagues who were putting together the first personal computers in Albuquerque in the 1970s only to later move to Seattle?

The best way for states to develop economically is to adopt a system of low, fair, and transparent taxes and simple regulations. Our failure to do that is what makes New Mexico poor and unfriendly to business.

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5 Replies to “Responding to critique of RGF’s views on economic development”

  1. Paul,

    How do you reconcile your views on a free market and your views on the importance of government incentives funded by taxpayers to attract business or industry to the state?

    Michael

    1. Michael, I’m not sure what you mean. “Government incentives” is a very broad term. If you are talking about tax cuts available to all, we’re generally for them. If you are talking about infrastructure that is widely available, we’re for that. If you are referring to “targeted” incentives for individual businesses, we usually oppose those. I’d need more details before passing judgement and formulating an argument about a particular policy.

  2. Interesting that after what Scot Walker and Mitch
    Daniels have accomplished, New Mexico lawmakers
    are so under the control of Union thumbs, they can
    ignore these facts and proceed merrily down the path
    of bankrupting the state. This is so YESTERDAY!
    Or, God forbid, so ignorant they don’t KNOW what’s
    happening in those other states?

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