Tuesday, 20 March 2018 14:41

Are taxpayer funded job incentives a good investment?

People often ask if NMBC supports Job Training Incentive Program (JTIP). Quite honestly, JTIP has rarely been a good thing for New Mexico. While NMBC can support the concept of what was designed to provide on-the-job and classroom training that reimburses for 50 to 75 percent of wages for newly created jobs, it seems we just have not found an effective way to manage it. New Mexico is really good at giving away taxpayer dollars, but we often get nothing for it.

Another case of failure was recently reported in the Albuquerque Journal. Convergys is laying off 151 full time employees by the end of April. This is the same company that received $200,000 in 2017 to provide 100 jobs with an average wage of 12.25 an hour. The company and the NM Economic Development Department said the company had met its obligations for the program.

Great, glad to hear it! But does it make you feel better, knowing they received $200,000 of our tax dollars just last year, that they somehow 'met their obligations' to receive the money? It's a safe bet the 151 employees who are losing their jobs won't feel like obligations were met or that the tax dollars to help grow jobs were well spent in this case.

Not too many years ago, the state had virtually no requirements for clawbacks in the contract. Meaning money freely flowed to companies with absolutely no performance requirements. NMBC worked for years, along with some great legislators and others to assure there were requirements for the money handed out. It didn’t seem to matter in this case if the requirements are such that in just a few months of receiving the money, you’re off the hook.

So what would it take for this program to make sense?

Since New Mexico seems unable to figure this program out, the first priority should be to review programs in other states to determine what works and what doesn’t work.

Secondly, established NM companies should have priority in receiving these funds. If they’re already here, they know what it takes to do business in New Mexico – an iron will and love of the state. It’s certainly not our good business practices that is a draw for entrepreneurs.

Third, there should be meaningful clawbacks. That means that a company must produce for a minimum of two years or pay back the funds. There may be circumstances where the time period should be extended beyond two years, but it should never be shorter.

Finally, there should be an honest, complete, factual tracking of every dollar provided in JTIP funding over multiple years. We need a true analysis of where this money is going to determine if it’s money well spent.

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