March 11, 2016
FOR IMMEDIATE RELEASE
CONTACT: Sharon Kayne, Communications Director, NM Voices for Children, 505-244-9505
ALBUQUERQUE—Despite the fact that a large share of New Mexico’s workforce is employed by small businesses, 70 percent of the state’s economic development subsidies goes to large companies. That’s one of the conclusions of a report released yesterday by Good Jobs First, a Washington, DC-based think tank focused on economic development. The report, “Slicing the Budget Pie for Big Business,” examined $344 million in spending on more than 60 programs among three states—New Mexico, Florida and Missouri.
“Across the nation—and particularly in New Mexico—small businesses are the backbone of the economy. It’s illogical that they receive such a small share of state economic development dollars,” said Veronica C. García, Ed.D., executive director of New Mexico Voices for Children. “Our elected leaders often talk about the need to diversify our state’s economy—and that’s a laudable goal—but this report shows that our economic development spending is targeted at big corporations, rather than nurturing our small home-grown businesses.”
In their report, Good Jobs First looked only at economic development subsidies that are specifically tied to job creation. The report shows New Mexico spent more than $63 million on such programs, with more than $44 million of that going to companies with more than 500 employees. The report excluded tax credits or exemptions that lack job creation requirements, such as the corporate income tax cuts enacted in 2013.
“New Mexico desperately needs more jobs that pay family-sustaining wages and include benefits like paid sick leave. Lawmakers need to ensure that our economic development incentives are doing that in the most targeted, effective ways,” said Dr. García.
In their press release, Good Jobs First stated that their report shows a sharp bias against the “entrepreneurial economy,” despite the pro-small business rhetoric that comes from most state Capitols.
“The bias in favor of big business is compelling evidence that economic development has strayed far from its original mission of correcting market failures,” said Greg LeRoy, executive director of Good Jobs First. “An incentive is supposedly intended to enable something that should happen but won’t happen until public dollars reduce private risk. But it’s hard to see how tax breaks are really influencing companies with access to credit, well-established markets, and deep pools of management talent. Instead those resources really could help smaller firms still struggling with a credit crunch lingering from the Great Recession,” he added.
The Good Jobs First report is available online at www.goodjobsfirst.org/slicingthebudget.
New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. Our fiscal policy work is funded by grants from the Annie E. Casey Foundation, the McCune Charitable Foundation, the WK Kellogg Foundation, and the Working Poor Families Project.
625 Silver Ave. SW, Suite 195, Albuquerque, NM 87102; 505-244-9505 (p); www.nmvoices.org