Official: Corporate tax cut will create jobs

SANTA FE (KRQE) - When it comes to job creation in New Mexico, things are looking bleak.

While surrounding states are beginning to show signs of an economic turnaround, New Mexico continues to post negative job growth. In fact, the state lost about 3,200 jobs last year.

And with potential job cuts coming at state Air Force bases, Sandia National Laboratories and the Los Alamos National Lab, the man in charge of putting unemployed New Mexicans back to work is racing to grow private sector jobs in the state.

“The toughest part of our job is making New Mexico more competitive,” said Jon Barela, the state’s secretary of economic development. “We need to diversify our economy here in New Mexico.”

Barela said he thinks the single biggest factor holding back job growth in New Mexico is a corporate tax rate that is scaring away businesses. The nonpartisan Tax Foundation, based in Washington D.C., ranks New Mexico’s business tax climate number 38 out of the 50 states.

All the states surrounding New Mexico rank higher, including Texas at number 9, Utah at 10, Colorado at 16 and Arizona at 27. Barela is pushing a proposed law that would lower New Mexico’s corporate tax rate from 7.6 percent to 4.9 percent.

“Our tax structure is not only complex, it’s very high,” Barela said. “It’s all about becoming more competitive so that we can grow that industry. I’m very, very excited about that.”

However, Barela may have to overcome resistance to the proposed corporate tax rate cut from lawmakers.

“The reality is that for a lot of companies, it stacks up just fine because we have over $1 billion worth of exemptions,” said state Sen. Tim Keller, D-Alb. “So the statistic that we’re comparing with Arizona isn’t really apples to apples because most companies in New Mexico hardly pay any corporate income tax at all because of all the loopholes.”

Still, Barela said he thinks the tax change alone will launch a new wave of jobs here, which would be good news to people like Lewis Bullington. The 37-year-old Los Lunas resident was one of 500 area residents who showed up at a job fair in Albuquerque last month advertising 250 jobs.

“I’ve been out of work for about a month now,” Bullington said. “I’ve been with the warehouse and manufacturing work for the past 12 years, and I was laid off, so I want to try to get back into warehouse work.”

Beyond cutting the corporate tax rate, Barela said he’d like to attract more aviation-related jobs to the state.

In the last year, avionics maker Bendix King relocated its headquarters to Albuquerque as did Air USA, which provides military pilot training, Together, those companies will provide as many as 400 high-paying jobs.

Also, once-bankrupt Eclipse Aviation, now known as Eclipse Aerospace, is back building business jets in New Mexico again.

“Aerospace and aviation ought to be owned by New Mexico,” Barela said. “We have great flying weather, great terrain for training, (and) we have unlimited air space at the Spaceport America. We have great assets.”

Meanwhile, thousands of New Mexicans like Bullington are waiting and hoping for a job.

“It is difficult,” he said. “There’s not too many jobs out there right now.”