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New Mexico Gov. Martinez Boosts State’s Business-Friendliness

New Mexico has remained in the middling ranks of state business climates for a few years, but Governor Susana Martinez has been making a concerted effort to attract CEO attention and company locations since she took office in January 2011.

Her efforts have helped make New Mexico competitive for landing projects in the state, including facilities for Union Pacific, FedEx, Fidelity and other companies that were looking elsewhere, including Texas. However, under her watch New Mexico lost out on the Tesla “gigafactory” that’s being built in Nevada after making the short list of four finalists.

The Republican governor also has led New Mexico’s export-boosting efforts, which have resulted in the state’s producing big relative increases in export-related job growth.

“We jumped from 36 to 31 in your list in just a few years, and I’m very proud of that,” she told Chief Executive magazine, citing New Mexico’s higher ranking in the “2016 Best & Worst States for Business” after the state placed 32 in 2015. “But that’s just one example of how our business climate has drastically improved in our state in the last five years.

“Now CEOs are seeing a whole different environment. They know we want their companies here.”

“Now CEOs are seeing a whole different environment. They know we want their companies here.”

Before she took office, Martinez said, CEOs noticed that New Mexico was “very punitive” toward business, including maintaining one of the highest business-tax rates in the U.S., charging manufacturers higher taxes on exports than other states, and “imposing layers of taxes and tax permitting on contractors and manufacturers.”

This was an even bigger problem for New Mexico because the state was heavily dependent on federal largesse, through military bases and major research facilities such as the Los Alamos National Laboratory. And its biggest business remained oil and gas.

“We will always fight to protect those key sectors,” she said, “but we knew we had to diversify our private-sector economy.”

So within a couple of years, Martinez had led the legislature—which then was controlled by Democrats and now is divided between Democratic control of the Senate and a Republican edge in the House—to pass a package of reforms “because we knew we had to change our approach to compete for jobs,” she said.

Among other things, the government moved to reduce business-tax rates by 22 percent. Martinez got passage of a reduction in the state’s half-billion-dollar structural budget deficit, in part by going after waste and abuse. New Mexico strengthened its technology-jobs tax credits to attract companies that could capitalize on its significant base digitally savvy workers.

And Martinez has been leading the creation and expansion of urban-revitalization and redevelopment-zone programs in the major cities of Santa Fe, the capital, and Albuquerque, where the state is attracting companies to set up operations in the downtowns that can attract the droves of millennials who like to work and live in urban centers.

Last year, Martinez also secured enactment of a Rapid Workforce Development fund that helps the state close recruitment deals that require highly specialized, trained workforces. For example, Safelite, the windshield-repair specialist, wanted to have a cohort of fluent Spanish speakers to hire at a new insurance-claims processing center it plans to open in Rio Rancho.

“I can’t emphasize enough what a strong asset our diverse and talented workforce is,” she told Chief Executive.

The governor also has made a priority of developing what she called a “binational community” in southern New Mexico, where she lived most of her life. The filling of an industrial part in the Santa Teresa port of entry has created 3,000 jobs there, she said, just one result of the increasingly strategic role played by suppliers and other companies in New Mexico in feeding the boom in manufacturing in Mexico.

“We have a symbiotic relationship,” she said.

Martinez has been a rising star in the national GOP and spoke at the 2012 convention that nominated Mitt Romney for president. But she has kept at arm’s length from the 2016 Republican nominee, Donald Trump, mentioning that she “looks forward to meeting with him about our needs in New Mexico.”

And as far as potential support for Democratic nominee Hillary Clinton? “I will not be voting for Hillary Clinton,” Martinez said. “That is an absolute.”

 

About Dale Buss

Dale Buss
Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other top-flight business publications. He lives in Michigan.