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The Regional Economic Development Initiative’s (REDI) annual State of the Region summit, held Aug. 14, initiated a three-part series of meetings geared toward making local communities eligible to recieve funding from New Mexico Jobs Council initiatives.
The Legislative Jobs Council was initiated in 2013. A joint Jobs Task Force was created this year when Gov. Susana Martinez appointing three cabinet members and two other representatives to the council. Private industry groups also participate.
The goal of the jobs task force is to determine how many economica base jobs the state needs to create over the next 10 years to return to a healthy growth rate, at least equal to the rate prior to the 2008 downturn.
An economic base job is one where the buyer for the service or the product is from outside New Mexico, infusing money into the local economy.
“You get more bang for your buck when you’re creating an economic base job,” said REDI Program Manager Eric Vasquez. “Those dollars have much bigger impact on your local economy than a service type job done locally.”
Economic base jobs also have a multiplier effect, generating other jobs through the sale of goods and services within a community. The multiplier effect can create from one to three additional jobs, depending on the type of job and the local economy.
The Jobs Task Force is currently crafting legislation for several funding initiatives that could benefit local economies and has asked local communities to identify target metrics for how many economic base jobs they need to create in the next 10 years. Communities that have completed the planning exercise will have greater eligibility for those programs.
“We went through several exercises with our participants that day, basically to come up with some raw numbers of what the economic rate really is in the region and how many jobs we need for the available work pool of willing and able workers who are here,” Vasquez said.
By the end of the exercise, participants arrived at an estimate of 18,612 economic base jobs that need to be created for the entire four county region over the next 10 years, an average of 1,800 new jobs per year. Those numbers take into account typical attrition rates of 63- to 70-percent as businesses relocate or close for a variety of reasons.
The Jobs Council is proposing a total of 10 funding initiatives for FY2016.
According to Vasquez, one proposal exciting local communities is $4.5 million for an Economic Development Grant Fund that would provide a 50/50 match for hiring economic development staff.
“The strategy behind that is that to create the number of economic base jobs that we estimate we need statewide, about 160,000 over 10 years, it needs a certain number of deals for businesses to come in to create blank number of jobs. You need the professionals that can cut the deals,” Vasquez said.
The legislature declined to fund a similar proposal this year.
The council is also proposing a dramatic increase in Local Economic Development Act (LEDA) funding. Only $3 million was appropriated statewide in FY2013. Vasquez believes that increased to $9 million for the current year. The task force is proposing $50 million for FY2016.
LEDA is basically a closing fund for providing incentives over competitors to attract business to New Mexico.
A Job Training Incentive Program could also be of benefit to local employers. The program targets jobs in industries the state wants to promote, paying up to 50-percent of a new hire’s salary for the first six months in order to promote on-the-job training. The funding comes with a claw back provision to recover the money if the company lets the new employee go after six months.
“It’s for building up their workforce to where they’re valuable and they want to keep them, and they’re adding value to the company,” Vasquez said.
“New Mexico stands out for our JTIP program.”
A Forest Restoration Economic Development Assistance fund could be of particular benefit to Los Alamos County, since the Jemez Mountains are a top priority area.
All these programs hinge on legislative approval, but REDI wants to be prepared in the event the legislation comes through.
REDI’s State of the Region report confirmed the need for such programs. Although Los Alamos has a relatively low unemployment rate, averaging between 2.5 and 3.6 percent over the last year, the region overall has a 16 percent rate of unemployment.
The good news is that the investment by Los Alamos and other communities in REDI has netted huge dividends. A $200,000 investment in REDI Net (broadband access infrastructure) has brought in $2.6 million in outside funding.
A second meeting on the jobs task force initiative, involving community leaders and members of 13 targeted economic clusters, is scheduled from 9 a.m. to 2 p.m. Sept. 18 at Ohkay Owingeh Hotel & Casino to further refine local job creation needs.
REDI is also planning a third meeting with local colleges focused on workforce development.
For more information go to nnmredi.org.
Late last week, Rep. Stephanie Garcia Richard presented Dr. Beverlee McClure of the Association of Commerce and Industry (ACI), to the legislative interim Jobs Council, on the work they’ve done together with procurement development.
In conjunction with ACI, Garcia Richard was able to successfully pass House Joint Memorial 11 during the 2014 legislative session which called for, among other things, state procurement to “secure qualified training” in order to ensure that New Mexico owned business are knowledgable about the bidding process.