California Company CEOs Being Wooed by New Mexico Governor

The governor of one of this country’s smallest state economies is touring the largest, trying to convince California business leaders they’d be better off in New Mexico.

Gov. Susana Martinez and her entourage toured the Golden State yesterday on Day 1 of their three-day corporate-recruitment mission. During their visit, they’ll meet CEOs, economic-development specialists, site selectors and business association leaders and tout New Mexico as a corporate location.

The governor has said she would talk about her state’s tax reform, increasingly generous tax breaks and relocation incentives, job training programs and infrastructure improvements. Under her watch the state’s cut corporate taxes on profits, payrolls, sales and purchases. Manufacturers, for example, now pay no corporate income tax for goods sold outside the state, which is most of their sales, said Jon Barela, head of New Mexico Economic Development Department, who is accompanying the governor on the trip.

“California sent a detailed flow-chart showing how long it would take to get the permit, the costs associated with getting a permit and the agencies they needed to contact. New Mexico simply sent the permit.”

Golden State companies that have relocated or expanded in New Mexico recently include Flagship Foods, Southwest Steel Coil, and Solaro, a consumer solar products company, said Barela.

California, the country’s top state by GDP and its worst for business climate, having ranked 50th in Chief Executive’s 2015 Best & Worst States for Business, is prime territory for gubernatorial recruitment tours. Gov. Rick Scott of Florida and former Gov. Rick Perry of Texas led well-publicized visits that stirred debate over subsidies as cost-effective economic-development tools. New Mexico ranked 36th last year in Best & Worst States, six positions down from 30th in 2014.

The governor’s expedition builds on advance efforts undertaken by both the state and key regions. Last year, Albuquerque Economic Development hired Los Angeles site selector John Rocca to head West Coast business development efforts. Rocca was charged with qualifying 50 companies interested in expansion or relocation, according to Gary Tonjes, the city’s economic development chief.

Jim Renzas, a site selector based in Orange County, CA, is one person meeting with Gov. Martinez. He expects she’ll discuss labor costs and regulatory environment, both hot button topics. Sacramento’s plan to hike the hourly minimum wage to $15 has triggered rising-wage fears among employers. Opposition to state-generated environmental rules and water-use regulations continues to irk business leaders.

Renzas expects the governor will face responsive audiences, reflecting New Mexico’s business-friendly reputation. He mentioned the experience of Intel when the tech company was considering expanding its Rio Rancho, NM facility, and contacted both California and New Mexico.

“California sent a detailed flow-chart showing how long it would take to get the permit, the costs associated with getting a permit and the agencies” they needed to contact,” Renzas said.
“New Mexico,” he added, “simply sent the permit.”


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