Economic inflection point seen

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By Harold Morgan

The New Mexico economy is “at an unusual inflection point,” Barbara Brazil, deputy Economic Development Department secretary told the recent New Mexico Tax Research Institute Tax Policy Conference. We need to start thinking differently about the economy, she said.
Our economic conversation is more than Brazil’s job. She has been in the chat for a long time. She is thoughtful and wise.
An inflection point, for those of us for who eighth grade geometry has disappeared, is where a curve changes direction, as from heading down to up.
Given our addition of a few new jobs the past couple of months — 7,900 from April 2012 to April 2013 — the economy may be at an inflection point. However, it is the thinking that I hope is changing direction. At minimum, we’ll see more public conversation about the economy and/or economic development (they are different).
A new interim committee of the Legislature is called “Job Growth.” Leadership and members are yet to be named. The big daddy of interim committees, the Legislative Finance Committee, plans an economy session at every meeting. On June 13, in Silver City, the LFC will consider “Labor Force Dynamics and Unemployment.”
T. Greg Merrion of Farmington proposes grabbing the bull by the horns. Merrion wears a variety of hats, including being president of Merrion Oil and Gas Corp. and of the New Mexico Prosperity Project, a strictly nonpartisan effort to increase private sector engagement in public policy. He spoke recently in Albuquerque to NAIOP, the commercial real estate developers group. While Merrion didn’t bury his presentation in numbers, one he mentioned was the roughly $10,000 difference between per capita incomes in Colorado and New Mexico.
In San Juan County, Merrion said, the year old Four Corners Economic Development Inc. is a private sector group that will build on the work of public sector San Juan Economic Development Service. Ray Hagerman, formerly a vice president of the Dayton, Ohio Development Coalition, became Four Corners CEO on April 1. Hagerman gets a $500,000 budget for his task, a five-fold increase from the $100,000 available to San Juan Economic Development.
Hagerman takes over from Margaret McDaniel, who ran San Juan EDS alone for more than 20 years.
Having had the opportunity — the privilege, really — of visiting occasionally with McDaniel and working with her on one or two projects, she deserves kudos for her energy, competence and decency in service to San Juan County and to the state. All economic developers face challenges, available land being one. In San Juan County, just 6 percent of the land is privately owned. McDaniel is now a member of the county commission. As such she embodies one of Merrion’s recommended approaches to New Mexico’s problems.
“Elect lawmakers that get it,” Merrion told NAIOP.
The rest of Merrion’s to-do list is:
• Streamlined regulation and cost-benefit analysis;
• Fair, competitive and simplified taxes;
• Improved government efficiency;
• Improved education;
• Improved infrastructure, including regional fiberoptic networks;
• Wider private sector engagement in public policy. The Prosperity Project is the mechanism. See newmexicoprosperity.org.
“The challenges are large,” Merrion said. “They include enduring, deeply rooted limitations. ‘There is a certain portion of New Mexicans that like the government to take care of them.’ proportionally fewer ‘robust businesses,’ decline of the federal portion of the economy, being business unfriendly and ‘too much micromanaging via regulation,’ which costs business and is not cost effective for the public.”
If Merrion was not an optimist, surely he would find better uses for this time.
Barbara Brazil is an optimist, too. The best of times are ahead, she told the tax folk.