What a Sunny Swamp Can Teach a Sunny Desert

Last week, Errors of Enchantment went “on assignment” in Florida, a state with enviable economic growth. (Cranes and bulldozers were everywhere.) The Foundation’s ongoing analysis of job-creation investments in the laboratories of democracy finds the Sunshine State to be a consistent performer, with opportunities expanding in aerospace, finance, media/entertainment, and IT. Florida has regained all the jobs it lost during the Great Recession, and is well ahead of its previous employment peak. (New Mexico isn’t.) Unemployment is just 3.6 percent — below the national mark and substantially lower than New Mexico’s dismal 6.1 percent.

How does Florida do it? Here’s a look at its economic-development profile, contrasted with conditions in New Mexico.

Taxes: There are literally dozens of ways to gauge a state’s tax climate. One of the best is calculated by the Federation of Tax Administrators. The FTA’s numbers show that Florida has one of the lowest state-and-local burdens in the nation, when measured as a share of personal income. The Land of Enchantment, not surprisingly, has one of the highest revenue grabs. With business-related taxes, the story is similar — Florida a star, New Mexico mediocre. And the former doesn’t have an income tax.

Spending: Government is kept in its proper place in Florida. Per capita state-and-local spending is among the lowest in the nation. The Mercatus Center’s ranking of states’ fiscal health, which tracks “short- and long-term debt and other key fiscal obligations, such as unfunded pensions and healthcare benefits,” places Florida at #1. New Mexico is #41.

Right to work: Florida has banned compulsory unionism since the 1940s. New Mexico … you know the story.

Crime: New Mexico is a disturbingly dangerous place, with the second-worst rate of violent offenses in the nation. But Florida is no safety paradise, falling just outside the top ten states for murder, rape, robbery, and aggravated assault. Like Nevada, Florida appears to be booming despite its crime woes.

Education: The Center for Education Reform’s Jeanne Allen noted that even though it is flawed, Florida’s charter-school law provides “clear evidence of what’s possible when educators and parents are empowered to engage directly in creating educational opportunities through chartering.” Other school-choice options, such as a tax-credit scholarship and vouchers for disabled students, have helped the state go “from the bottom on most measures of educational outcomes in the early 2000s to … about the national average today.” New Mexico … you know the story.

Weather: If you hate humidity, Florida’s not for you. But the sea and the sand can make up for the stickiness. New Mexico may have the best weather in the country, but clearly, liberals’ facile claim that the Sun Belt‘s mild climate is a prime cause of the region’s economic success isn’t operative when it comes to the Land of Enchantment.

D.C. “investment”: Similar to New Mexico, the Sunshine State is lousy with federal facilities — Naval Air Station Pensacola, the Air Force Special Operations Air Warfare Center, Kennedy Space Center, Eglin Air Force Base, the Center for Information Warfare Training, Coast Guard Air Station Miami, MacDill Air Force Base, and many more. But federal spending, relative to gross state product, is lower there than here — 24.1 percent vs. 30.1 percent, according to The Pew Charitable Trusts. And Florida doesn’t have one national lab, much less two.

You be the judge. Does Florida follow the blue- or red-state model? And based on the evidence, which path forward is best for New Mexico?

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2 Replies to “What a Sunny Swamp Can Teach a Sunny Desert”

  1. Well, lookee here. Soon we will not be able to deduct real estate and state income taxes from federal reporting. Excellent legislation, but not so hot for NM!
    We can raise gross receipts, the worst tax form we have!

    1. Actually, the federal tax reform were it to eliminate the real estate and income tax deductions would benefit NM as those are lower than they are in other states like NY and CA. There may be some really big land owners or income tax payers who lose out a bit, but as a state this should help NM. Plus, it is good policy. Why should federal taxpayers subsidize states raising taxes?

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