New Mexico struggles despite federal largess

AP News
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Posted: Dec 03, 2014 5:57 PM
New Mexico struggles despite federal largess

LOS ALAMOS, N.M. (AP) — Tucked in the mountains of one of the poorest states is one of the nation's wealthiest counties: Los Alamos, which, except for its landscapes, looks decidedly unlike the rest of New Mexico.

In Los Alamos, there's a new county building and a renovated community center. Less than 30 miles north is Rio Arriba County, home to drug- and crime-plagued Espanola, whose main drag is a mix of fast-food restaurants, boarded-up businesses, a casino-hotel and a Wal-Mart.

Average per-capita income in Rio Arriba: $20,000, well below half Los Alamos County's $50,740.

The contrast highlights an unusual wealth gap in New Mexico: Unlike other states, the richest residents of New Mexico work mainly in the public sector, while almost everyone else is employed in the private sector.

That dynamic is both a blessing and a curse. In all, according to a study by the Pew Charitable Trust's Fiscal Federalism Initiative, about 35 percent of New Mexico's economy comes from the federal government — the highest such figure for any state.

Critics say an inability to diversify the economy has exacerbated income disparities. They say that at a time of tight federal budgets, the state can't afford to stake its economic future on government spending.

Unless new industries can be attracted, workers will have to settle for whatever lower-paying government jobs are available or for low-wage service industry work, according to political leaders and experts on the state's economy.

"The rest of the nation is subsidizing New Mexico," said Jake Arnold, a political consultant.

The issue was a key topic in this fall's governor's race, with Republican Gov. Susana Martinez saying she cut business taxes to spark the creation of more private-sector jobs.

But so far, large-scale job-creation efforts have faltered.

Spaceport America in Sierra County, the venture of entrepreneur Richard Branson that was supposed to lure both jobs and tourism dollars. Instead, the county is losing private-sector jobs, according to state data.

The building and runway sit nearly empty. The breakup Oct. 31 of its experimental rocket-powered spaceship over the California desert has raised new doubts about whether the space-tourism flights will ever happen. The company says tests flights could resume as early as next summer.

"I think we gave up on all that a long time ago," said Stephanie Ontiveros, who works at the Butte General Store and Marine in Sierra County, which raised its taxes to help support Spaceport.

Sierra is now among the New Mexico counties with the lowest average wages, and, like Rio Arriba, it is plagued by empty buildings and businesses for sale.

New Mexico ranked last among states for job growth from January 2011 through 2013. It is second, behind Mississippi, in the percentage of its residents living in poverty — a percentage that increased from 20.8 percent in 2012 to 21.9 percent in 2013, Census figures show. It also consistently ranks at or near the bottom of national rankings for education and child welfare.

Economists and activists say New Mexico has trouble attracting new industries for two major reasons: widespread poverty and low education levels. While Los Alamos and a few other parts of New Mexico have some of the highest percentages in the nation of doctoral-degree holders in science and engineering, U.S. Census data show the state is below the national average in the percentage of its adult population that holds a bachelor's degree.

The private sector did add about 8,000 jobs in the 12-month period that ended in September, according to state labor reports. More than half the jobs were in education or health services. Government jobs declined by 1,800 over the same period, with 300 of those losses in the federal sector.

Even in Los Alamos, the number of lucrative lab jobs is shrinking along with the federal budget. And yet in a sea of struggling New Mexicans, Los Alamos, with nearly 18,000 residents, remains an island of prosperity.

Mike Lippiatt, a Los Alamos native, said that while Los Alamos and places like Rio Arriba County are worlds apart, residents really don't think much about the disparities.

Lippiatt likened Los Alamos to a "fantasy world" where children still walk to school, crime is kept low by a huge police force and there's no such thing as real traffic.

While many residents "live very humbly," he said, "I think the people who have all this money are retired from the lab, they invested well, they did things right. ... They have literally millions of dollars in the bank."