By: Bruce Krasnow (Santa Fe New Mexican)
More than five years into an administration that touts its pro-business policies, New Mexico has dropped further than any other state in the annual survey of business climate by CNBC, the financial news network.
The survey puts New Mexico at 39th among the 50 states, down 15 spots from last year. CNBC attributed much of the decline to workers leaving New Mexico because of the bust in oil production.
CNBC wrote: “Workers have been fleeing the state in droves since the boom died and, because we consider net migration in our workforce category, New Mexico suffers badly.”
Other states hurt by the slowdown in crude oil production were Oklahoma, now at 42 in the rankings, down 11 spots, and North Dakota, which fell six spots to 12th.
Most states adjacent to New Mexico are doing much better. Utah, Texas and Colorado ranked first, second and third, respectively, in the CNBC survey. Minnesota and North Carolina rounded out the top five states.
New Mexico had made progress in the survey during the past years for cutting its business tax rates and easing permitting. That has made the cost of doing business in New Mexico more competitive — a point that’s been emphasized by Republican Gov. Susana Martinez, who assumed office in 2011.
New Mexico now has one of the lowest tax rates for manufacturing and offers broad tax incentives to businesses that hire workers when they relocate or expand in the state.
In the survey, New Mexico held its own for business friendliness and the costs of doing business. But it dropped in the quality of its workforce, overall economic growth and quality of life. It ranked fifth in the category of infrastructure in 2015, but fell to 14th this year.
In citing the success of Utah, CNBC mentions not just lucrative tax credits, but its strong education and infrastructure.
“Lured by factors such as tax breaks, affordable real estate, an educated populace and a strong public-transit system, many iconic companies have set up home bases in the state. They are attracted to the pipeline of STEM workers from such schools as Brigham Young University and the University of Utah.” STEM stands for science, technology, engineering and math.
Texas, ranked second in the survey, is also credited with having a diverse economy and strong public amenities. “Texas also boasts the nation’s second-best infrastructure, with two major international airports, one of the world’s most important seaports, an extensive rail network and roads and bridges that are in better shape than those in the rest of the country,” CNBC stated.
Colorado, third overall, ranks first in workforce training and development, according to CNBC. “Colorado workers are the nation’s most educated, and state worker-training programs are among the best performing in the nation. The state is rewarded with one of the best net migration rates in the country.”
Arizona, another neighbor of New Mexico, improved from 34th to 25th. “Arizona is attracting skilled workers these days, an essential ingredient for attracting businesses,” according to CNBC.
Rhode Island was 50th for business climate. Others in the bottom five were Hawaii, West Virginia, Mississippi and Maine.
Once down-and-out Michigan was the most improved state in the survey, going from 22nd in 2015 to seventh this year.
“And with $328 million in venture capital flowing into the state last year, Michigan comes in fourth for access to capital,” CNBC stated.
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