May 18, 2017 Meeting
Fostering Economic Growth and Diversification, plus
Review of the 2017 Regular Legislative Session
New Mexico Department of Economic Development
Central and Washington station rendering
Barbara Brazil, Deputy Secretary of the New Mexico Economic Development Department, spoke at the May 18, North I-25 Business Association meeting.
Barbara Brazil, Deputy Secretary of the New Mexico Economic Development Department, spoke to the Association on May 18, about the Department’s work, the results of the 2017 regular Legislative Session, and the then-anticipated Special Session.
Economic development encompasses
Increased Tax Revenues and Tax Base
These are accomplished through:
In turn, recruitment, expansion, and startups require:
- Competitive Tax and Regulatory Policy
- Available Buildings and Land
- Skilled Workforce
“50% of what we do is helping existing businesses,” said Brazil, although attracting new companies is what gets a lot of attention.
The Department has reestablished the Science and Technology office to foster the “bubbling up” of research and development in the state.
Some of the challenges Brazil noted are:
- Getting the right balance of regulation and support
- Preparing the state workforce for jobs to be ready for jobs in 5 to 10 years, noting that there is always a lag in educating the workforce.
The Department has a wide variety of programs in place to serve as economic development tools. Two of the most used are JTIP and LEDA:
Job Training Incentive Program (JTIP) – its success has been nationally recognized.
- 1,408 workers are being trained through JTIP just this year.
- 38 companies assisted this year
- Average wage of $18.36
- Retention data for workers in the program are excellent
- Companies applying for JTIP must provide extensive data, and three years of financials. Much of the application process is done online.
LEDA (Local Economic Development Act) Funding serves as a “closing fund” and can help to put New Mexico over the top in creating a winning package to attract new companies. LEDA is a discretionary fund within the Executive Branch, with uses including land, buildings, utility infrastructure. LEDA funds are intended to bring in companies that make products here to be shipped out of state, thus returning new revenue to New Mexico. It’s only been in the last three years that the Department has had LEDA funds available.
“JTIP and LEDA allow us to compete against larger states it attract new companies,” Brazil said. Recruiting new business is a highly competitive game.
“Our sweet spot in attracting new businesses is mid-market companies with 150 to 500 employees and a sales of $5 to $40 million,” said Brazil. Even then, the Department uses JTIP and LEDA to help more existing businesses than new companies,” Brazil stated.
The Department is organized to address the strengths of the state and serve all areas. Brazil detailed some of the department’s organization and work.
- Community, Business, and Rural Development Teams
- Main Street Program – a 2013 economic impact study showed that every $1 spent by the state meant $44 investment by the private sector.
- Arts and Cultural Districts
- State Data Center with detailed census, workforce, economic, county and tribal data https://gonm.biz/site-selection/state-datacenter-program/
Office of International Trade
- Most New Mexico companies engaged in foreign markets are active in only one foreign country. NMEDD can work with them to broaden their reach into more countries.
- Finance Development
- The Catalyst Fund is a $20 million fund-of-funds created to increase seed and early-stage investment in New Mexico. They are expected to raise a matching $20 million in private equity making $40 million available for investment in local startups, with a focus on technology startups.
- Office of Science and Technology
- Includes Defense Industry Diversification program to assist communities, businesses, and workers that may be affected by the volatility of Department of Defense spending.
2017 Legislative Session
The regular 60-day session which began in January was described variously by observers and participants as “topsy- turvey,” “acrimonious,” and “extremely productive,” Brazil noted. She urged listeners to make up their own minds.
The session saw only 1,473 bills introduced, compared to a normal number of 3,000 in a 60 day session. The Economic Development Department fared well with funding allocated for a variety of programs, including $10 million for JTIP and $7 million for LEDA, as well as funding for other EDD priorities.
However, as the budget passed by the Legislature was vetoed by the Governor, the future of those funds are in question.
Brazil cited Governor Martinez’s proclamation for the special session