Armed with a new 20-year strategic plan, the New Mexico Economic Development Department is asking legislators for a substantial investment that its leaders believe will help the state diversify and bolster its economy.
During an event hosted Wednesday by the New Mexico Chamber of Commerce, Economic Development Secretary Alicia Keyes and Deputy Cabinet Secretary Jon Clark outlined some of the findings from the state’s recently released 384-page economic plan, which charts an economic strategy over the next two decades.
In order to help meet some of the objectives laid out in the plan, Keyes said the department will be asking for a “huge” budget increase during the upcoming legislative session in January, including a $50 million appropriation toward the state’s incentive program under the Local Economic Development Act, and $2.5 million to establish an office of diversity, equity and inclusion within the department. Such an expansion would help reverse staffing losses in the state agency and help the state reverse negative economic trends over the previous decade, Keyes said.
“New Mexico has an opportunity to, finally, get some momentum,” she said.
The Economic Development Department commissioned the report, which was paid for through a $1.5 million federal grant, to help New Mexico recover from the near-term impacts of the COVID-19 pandemic while guiding longer-term efforts to diversify its economy and become more competitive.
Clark described the period between the Great Recession and the COVID-19 pandemic as a “lost decade” for New Mexico in terms of job and wage growth, which lagged behind neighboring states. Keyes added that the state ranks 47th nationally in per capita income and 46th in gross domestic product per capita.
“We need to take action now, and we feel like we’re doing it,” she said.
The state hired nonprofit research firm SRI International to interview stakeholders and analyze the state’s strengths and weaknesses. The report identified six main impediments to the state’s economic growth, including misalignment between higher education and industry and public-sector dominance in the state’s innovation ecosystem.
“They help us pinpoint what is actually holding us back so we can move forward,” Keyes said.
One advantage the state has is an influx of federal funding coming out of the pandemic, including a newly announced $1 million grant from the U.S. Economic Development Administration. Still, Keyes said growth will require investment from state leaders, businesses and other stakeholders.
To that end, Keyes said EDD will be asking for $50 million to expand the state’s LEDA program, allowing New Mexico to build infrastructure that can make sites more shovel-ready for businesses. LEDA allows the state agency to administer grants to local governments to help qualifying businesses that are expanding to or relocating in New Mexico. Keyes said the state often gets inquiries from businesses seeking sites that are ready for development.
“We have a hard time pointing them to infrastructure-ready sites here,” Keyes said.
Separately, the state agency is asking for $12 million to support its Job Training Incentive Program, which funds classroom and on-the-job training for newly created jobs in expanding or relocating businesses. The department has argued the expansion is necessary to meet the needs of expanding companies.
Keyes said the agency is also seeking $4.5 million to fund marketing efforts that can build awareness of New Mexico in other states and countries. An additional $2.5 million would go toward establishing the proposed Office of Justice, Equity, Diversity and Inclusion (JEDI), which Keyes said could help address New Mexico’s issues with disengagement in economically disadvantaged communities and income inequality.
“The rich are getting richer and the poor are getting poorer,” Keyes said. “The gap is growing.”