New Mexico falls 10 places in annual pro-business rankings

By Rob Nikolewski │ New Mexico Watchdog

New Mexico slipped 10 spots in an annual ranking of pro-business states, and the man who has produced the survey for the past 11 years says the Land of Enchantment has some work to do luring companies to set up shop in the state.

“You really need to take some action in New Mexico if you want to compete,” Ronald R. Pollina, chairman of the American Economic Development Institute, said in a telephone interview from his Chicago office. “You’re competing with super-competitive states like Utah, Missouri, Kansas and Nebraska.”

New Mexico received an overall C grade for 2014 — the same grade it got in 2013 and 2012 — but tumbled from 25th in the AEDI rankings to 35th, tying Oklahoma for the most precipitous drop of the year.

Some of the reasons for the poor showing?

New Mexico received an F in seven of AEDI’s 19 grades for labor, taxes and other factors.

Here’s the AEDI report card:

New Mexico received two F’s and one D in the survey’s grades dealing with education.

“Education has become a very important factor for employers looking to move into other states, even on the manufacturing side of the equation,” Pollina told New Mexico Watchdog. New Mexico has consistently finished near the bottom in national results for educational achievement, even though it finished 20th in the nation in per-pupil spending in the most recent analysis by the National Education Association.

There’s been debate across the state about tapping into New Mexico’s Land Grant Permanent Fund, currently worth $14 billion, to fund early childhood education programs.

“It’s not always the amount you spend, but how you spend it,” Pollina said.

The AEDI report card looks favorably upon states that adopt right-to-work legislation. New Mexico got an F for not having it.

“Look at the states surrounding you,” Pollina said. “They are right-to-work.”

But Colorado’s economy is chugging along nicely despite not having right-to-work legislation.

“The question is, can your state do better,” Pollina said.

New Mexico also received F’s for its sales and gross receipts taxes, crime rate, long-term budget planning and litigation environment. “It’s easy to sue people in your state,” Pollina said.

On the positive side, the study gave New Mexico A’s for college student funding, business inventory taxes, property taxes and transportation infrastructure.

The study also looks at each state’s economic development departments. AEDI gave the New Mexico Economic Development Department a B for incentives and an A for marketing, responsiveness to employers and its website.

“When it comes to that, New Mexico is very good,” Pollina said.

The top 10 states in the AEDI survey this year were:

1. Utah

2. Wyoming

3. Nebraska

4. Virginia

5. Kansas

6. North Dakota

7. Indiana

8. Missouri

9. South Carolina

10. South Dakota

The bottom 10 consisted of:

41. Massachusetts

42. Vermont

43. Connecticut

44. Maine

45. West Virginia

46. Wisconsin

47. New Jersey

48. Rhode Island

49. Illinois

50. California

The AEDI report card is released jointly through Pollina Corporate Real Estate, Inc., a site selection and international corporate consulting firm based in Chicago with Pollina serving as president.

“We have more and more companies going to us and saying, look, if we’re going to stay in the United States,” Pollina said, “we have to be in the absolute most pro-business location possible.”