New Mexico's changing image: fact or fiction?

New Mexico Business Journal, March, 1991 by Jack Hartsfield

New Mexico's Changing Image: fact or fiction?

Is New Mexico changing its image to join the 20th Century as an aggressive recruiter and promoter of business growth before the century slips away?

Or is it lip service, primarily motivated by job creation for tax-paid bureaucrats touting the Land of Enchantment as an ideal place to live and work, yet failing to offer the right concrete business incentives?

That depends a lot on how you're swayed and who last put a bug in your ear.

The well-dressed, mature businessman was talking quietly about his dilemma, about doubts he could survive in the business world of New Mexico after two years of hard effort.

His name matters little. His problem significantly matters.

Born and reared in Bolivia, he saw New Mexico as his golden opportunity after teething on the business climate of Southern California for a number of years.

Now he's having serious second thoughts.

"Everybody always talks about countries south of the border being the land of manana," he says somberly. "It's not so . . . The land of manana is New Mexico."

He wasn't praising New Mexico for its laid back attitude, but noting that the state has the overpowering tendency not to start anything today that can be put off until tomorrow.

None of that, of course, is helped at all by the recession at hand and the backdrop of the horrors in the War in the Gulf.

Even before war erupted in January and before the Bush administration conceded a nationwide recession was already underway, more than 4,200 bankruptcy petitions were filed in federal court in Albuquerque by the end of 1990.

New Mexicans apparently were going broke in growing, record numbers last year, a 12 percent increase over '89 and the eighth consecutive year that bankruptcies reached new highs in the state. Records show that 89 percent of the total were Chapter 7 liquidations, a 10 percent hike over '89.

Four small business operators in New Mexico can be fooled at all by the hype from some that rosy days are just over the horizon.

Most businesses elsewhere in the nation toying with relocating, perhaps to New Mexico, are skitterish.

The backdrop of the S&L fiasco and talk of tottering banks has pushed lenders into an ultra-conservative mood - a happenstance leaving home-grown entrepreneurs scrambling from door to door for financial help to open or expand their businesses.

While East Coast and West Coast companies, heavily burdened by soaring costs to do business where they are, look for a silver lining elsewhere to relocate, the competition to woo them is as fierce as Daniel's fight in the lion's den.

For New Mexico to compete, it has to offer a lot more than lip service.

Gov. Bruce King's split of the New Mexico Department of Economic Development and Tourism to two cabinet level posts - one for development and one for tourism - may well be a step in the right direction.

The jury is still out. The proof will be in the pudding. How Bill Garcia, the state's new economic development guru, tackles the job and how often he scores is of no small importance.

Garcia says even with the given financial constraints, New Mexico must still move forward with border initiatives (madquiladoras), technology transfer, rural development and continuing to attract and recruit new business.

"We're going to be caught up in a natural phenomenon with what's happening on the East Coast and West Coast," says Garcia. New Mexico, he says, can benefit. Cost of housing, quality of life, pollution and commuting time in the major metro areas make New Mexico particularly enticing.

U.S. Rep. Bill Richardson, (D-NM), who understands New Mexico politics, business and economics as well as anyone, was pensive as he talked about his state in a small Albuquerque conference room during the heat of last year's campaign.

He wasn't pulling punches although for a campaigning politician he might well not have been saying the things people really want to hear.

There's a lot of room for improvement in New Mexico, he asserted, but as a congressman, he was dealing with reality.

Even a congressman can't be all things to all people. All he can do is assess and try to represent his constituents the best he can.

For New Mexico to reach its full potential, he conceded, might well take another generation. "Outsiders," however well-meaning, may lobby for changes in New Mexico's business blends, but the shots today are still controlled by the state's political masters.

Neither can the likes of U.S. Sen. Pete Domenici, (R-NM), or U.S. Sen. Jeff Bingaman, (D-NM), nor any of the other individual officeholders, whether in the U.S. Congress or statewide office or the state legislature.

Domenici says bluntly that New Mexico should change the gross receipts tax measure and stop taxing for research and development in services.

As it is, the gross receipts tax measure is a major roadblock to economic development, so high an obstacle that right off the bat it could cost Albuquerque its chance to become the new headquarters of the Air Force Space Systems Division, Domenici warns.