Amid state budget crisis, the economy is on minds of many

Tom McGuiness Tom McGuiness Tom McGuiness

Tom McGuiness did not expect he’d be looking for work at age 60.

But when he was laid off in July from the factory in Santa Fe where he had worked for more than 17 years, McGuiness was thrust back into the job market in New Mexico, where the unemployment rate ranks as the nation’s second highest.

McGuiness had been laid off before. This time feels different, though.

Despite having years of experience in chemical compounding, getting a job interview has been a challenge. McGuiness doesn’t have the college degrees many employers are looking for, and he does not want a $10.91-an-hour minimum-wage job or part-time work.

So, from a computer at his home off Rodeo Road, he looks for work day in and day out, applying for jobs as far away as Socorro and Questa. But his unemployment benefits are running out, and McGuiness wonders if a young person could make a living in New Mexico the way he did after moving to the state in 1978.

“The pay is low and people are leaving,” he says.

Many state legislators who will take their seats at the Capitol on Tuesday for the 60-day session campaigned hard on improving New Mexico’s chronically high rates of unemployment and poverty.

While Republicans used last year’s legislative sessions to push for crime-and-punishment bills, Democrats — who won a majority in the state House of Representatives and expanded their majority in the state Senate — say they will focus on economic development.

Unclear is how far lawmakers can go in job-training programs or building more infrastructure — roads, water systems and schools — as they also grapple with a budget crisis that will lead to cuts in spending across much of state government.

And many observers say it is more important for legislators to address the myriad small challenges hampering New Mexico’s economy than to search for an overarching solution.


Unemployment


The focus on creating jobs comes at a time when the state faces continuing uncertainty about its economy. While other states have bounced back from the 2008 recession, New Mexico ranks among the worst states for job and income growth.

“New Mexico has lagged the United States in heading into recessions and out of recessions,” said Alison Felix, vice president and Denver Branch executive of the Federal Reserve Bank. “New Mexico entered the recession a bit later. This time, it seems to be lagging more than usual.”

More challenges are ahead as President-elect Donald Trump pledges to roll back the Affordable Care Act, which could cut some 19,000 jobs in the state, half of those in health care, according to one estimate.

Trump also wants to trim the federal workforce. New Mexico has more than 30,000 federal government employees, the fourth-highest percentage of federal workers to total workers of any state in the country, according to an analysis by Governing Magazine.

And with continued uncertainty in the oil and gas industry, “diversification” has become the watchword for policymakers.

When Rep. Brian Egolf, D-Santa Fe, learned he would become speaker of the state House of Representatives, the first thing he did was organize meetings around the state with a focus on jobs and the economy. He didn’t want formal hearings. Instead, Egolf invited Republican lawmakers and local officials to show him communities that he said Democrats do not often see: Clovis, Hobbs, Carlsbad and Roswell.

What resulted are bills aimed at specific communities and a broader theme. One proposal is a state investment in the Roswell Air Center so it can service larger jets. Other ideas are renewable and wind energy projects around Clovis, highway improvements in Eastern New Mexico and faster permitting for energy development around Hobbs. All of these, in Egolf’s view, are tied to a more laser-like focus on the state economy.

Egolf said businesses like the state’s grant program to help companies grow and expand. But employers want to use the program, known as the Local Economic Development Act, for smaller projects and not just big-money marquee expansions.

In fact, boosting funding for the initiative as well as the Job Training Incentive Program appears to be something many Republicans and Democrats will be able to agree on during this legislative session. Economic Development Secretary Matt Geisel has described increasing support for the programs as a priority.

Unclear is how far the bipartisan agreement will stretch. Republicans are proposing another slate of tough-on-crime bills that Democrats lambasted as a distraction during the last legislative session. Democrats, meanwhile, are pushing to raise the minimum wage, a proposal Republicans are likely to fight.

And the economic development initiatives have plenty of critics, who have equated the programs to handouts for big business.

New Mexico has boosted funding for economic development programs in recent years but has seen relatively few jobs created in the short term, according to an analysis by the Legislative Finance Committee.

The committee found New Mexico’s economic development efforts are fragmented, rife with duplication and lack a comprehensive strategy. State analysts wrote that, while policymakers often search for a single program or incentive that will cure the state’s economic ills, they tend to ignore long-term structural problems such as the high school dropout rate, an underdeveloped network of roads and utility systems, regulatory barriers and a workforce that often lacks the skills employers demand.

Jason Espinoza, president of the conservative-leaning Association of Commerce and Industry, said the programs will pay off when measured not on the scale of one or two years but over three or five years — the time it might take a business to relocate or increase production.

His organization will push lawmakers to maintain and boost funding for the programs. Espinoza said legislators should go further and address smaller problems that he said are barriers to economic growth.

The Association of Commerce and Industry is backing legislation that would allow governments to strike agreements with private businesses to build and maintain public assets such as roads, as well as efforts to modernize the Public Regulation Commission’s regulations of internet providers.

In a more controversial stand, the group is again supporting a measure that would prohibit local governments from raising the minimum wage and creating laws on paid sick leave.

Rep. Bill McCamley, D-Las Cruces, has devised an even more controversial proposal based on the idea that lawmakers should think big.

McCamley has filed a resolution that would withdraw $7 billion from the state’s $15 billion land grant endowment to finance public projects such as new roads and high-speed internet networks and to spur scientific research projects. He points to neighboring Texas, which has a population 13 times larger than New Mexico but an endowment only twice as big.

“They have invested that money in their infrastructure,” he said. “While we have a very large permanent fund, history shows it hasn’t translated into an economy that works for everybody.”

McCamley admits his bill is a long shot. Tapping the fund would require approval of the Legislature, state voters and Congress.

Back at his house on the south end of Santa Fe, McGuiness keeps looking for work. He came to the state to escape the high cost of living in Connecticut and passed up a job offer in New Hampshire.

“It was so beautiful here,” he says.

McGuiness worked for General Electric in Albuquerque, was laid off in the early 1990s and took another industrial job before landing work at Clear Air Systems in Santa Fe, which made filters for cars and generators. When the blue-chip manufacturer Caterpillar purchased the business, McGuiness thought he could stay on another 10 years until retirement age.

But Caterpillar, struggling globally, shuttered the plant last year, about five years after buying it.

McGuiness says he has been trying to get into a job-training program that would be paid for by a federal grant intended to help laid-off industrial workers like him. But, he says, officials at the state agency that administers the program have not returned his phone calls.

McGuiness says economic development should not only be the job of politicians at the Capitol but at City Hall, too. He says he’s frustrated that local leaders do not seem to focus much on bringing businesses to Santa Fe. Leaders across the state, he argues, must do a better job of attracting businesses to New Mexico and cutting taxes to entice investors.

Contact Andrew Oxford at (505) 986-3093 or [email protected]. Follow him on Twitter @andrewboxford.

This BBSNews article was syndicated from NMPolitics.net, and written by Heath Haussamen, NMPolitics.net. Read the original article here.