DOWN FOUR NOTCHES: New Mexico fell four places in the annual “Rich States, Poor States” survey.
By Rob Nikolewski │ New Mexico Watchdog
SANTA FE, N.M. — The Land of Enchantment did not prove to be much of a land of opportunity in the past year, dropping four places in the “Rich States, Poor States” ratings.
After moving up in recent years in the study, New Mexico dropped from 33rd in the nation to 37th in the 2014 Economic Outlook Ratings that are conducted by the American Legislative Exchange Council, an organization that embraces fiscally conservative policy recommendations.
In 2011, New Mexico ranked 39th and in 2012 the state finished 35th.
The slippage may reflect New Mexico’s stagnant economy, which has been stuck in neutral for more than a year.
For example, numbers released by the state’s Department of Workforce Solutions show that New Mexico was the only state in the Southwest with negative regional employment growth between January 2013 and January 2014. New Mexico finished at minus-0.5 percent while neighboring states Texas and Colorado posted 3 percent gains.
One of the “Rich States, Poor States” co-authors, Jonathan Williams, said one hopeful note was the passage of a corporate tax cut in the 2013 legislative session — reducing the top rate from 7.6 percent to 5.9 percent in an effort to lure more business to New Mexico.
“That was a very important tax cut for the business community,” Williams told New Mexico Watchdog. “You can expect to see New Mexico get a boost of that next year.”
The ALEC study, co-authored by conservative economist Arthur Laffer of “Laffer Curve” fame, looks at 15 factors it deems necessary for economic growth, including low taxes and a competitive business environment.
New Mexico finished 49th in sales tax burden and was penalized for not being a “right to work” state.
Here’s a look at the states that finished in the study’s top ten and the bottom ten:
As you’d expect, there are critics of the ALEC study. In late 2012, a left-leaning economist called the “Rich States, Poor States” survey “snake oil” and claimed its policy prescriptions “produce lower wages, lower incomes.”
But Williams defended the survey, saying it “connects the dots for people to show that it’s not just conservative economic theory here. This is real world, in practice examples of states getting things right and reaping the economic rewards, whether that’s in income growth, jobs growth or a an overall more healthy state economy.”
Click here to read the 59-page ”Rich States, Poor States” report.
Contact Rob Nikolewski at email@example.com and follow him on Twitter @robnikolewski