Mario Burgos

Clear thinking and straight talk from the top of a mountain.

Thursday, April 06, 2006

Now That's Economic Development

I've never understood the rationale behind "economic development legislation" pushed at the city and state level in New Mexico. Legislative bodies and the various private commerce chambers and associations around the state are forever pushing incentives for one business or another. Session after session, council meeting after council meeting, ideas like IRB's with clawbacks, government funded job training programs, and tax breaks for particular industry clusters are passed.

It has always been my firm belief that specific industries should not be the beneficiaries of special interest legislation. Nor, should programs be so limited in scope that only a handful of businesses can possibly benefit. Instead, the approach should more closely resemble the approach taken by the City of Anaheim in California:

The council waived fees for homeowners undertaking renovations, on the grounds that the city would gain in the long run by the increase in property taxes. Anaheim also waived fees for business start-ups for three months; some 2,000 new businesses formed in 2005, an increase of one-third from the previous year. It also passed a tax amnesty and eliminated business taxes altogether for home-based businesses. Most cities don't like to allow churches to build new worship centers, because tax-exempt churches typically locate in commercial and industrial areas, taking properties off the tax rolls. Anaheim has eliminated most hurdles for approving new churches. Its housing plan also avoids "inclusionary zoning"--an increasingly popular approach to mandate that builders set aside certain amounts of "affordable" housing.

Think about it... A tax amnesty, waiving fees and eliminating taxes altogether for home-based businesses resulted in a 33.33% increase in the number of new businesses in the city! Now, that's what I call economic development.

Piecemeal legislation needs to stop, and large scale change should be the call of the day. Oh, and for the increase the minimum wage crowd, you're focusing on the wrong issue. Earning $7.50 an hour is no more "livable" than $5.50 an hour. Instead, make it easy for people to go into business for themselves, and they will likely earn significantly more, and while you're at it, you might want to make sure that every kid learns how business works.
 
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