Executive Summary:

The Stable Economic Growth Plan for New Mexico is a comprehensive 10-year strategy aimed at promoting resilient, diversified, and inclusive economic development throughout the state, starting in 2027. This plan builds on New Mexico's strengths in natural resources, federal investments, and emerging industries, while addressing vulnerabilities such as overreliance on oil and gas, workforce shortages, and infrastructure gaps. It also seeks to reduce reliance on government employment in a public sector that has become too large.

The plan's vision is to achieve average annual GDP growth of 3-4% and create 50,000 net new private sector jobs by 2032. Key goals include reducing economic volatility and lowering unemployment to below 3.5%. While promoting equitable opportunities for all residents, streamlining government operations, and decreasing the share of government employment from its current 21.6% to below 18% through private sector growth rather than public sector job cuts.

The plan emphasizes investments in high-potential industries, workforce development, infrastructure, and business-friendly policies to ensure long-term economic stability.

Current Economic Situation:

New Mexico's economy in 2025 is characterized by a total nonfarm employment of approximately 905,000 jobs, with significant contributions from government, energy, healthcare, and tourism sectors. The state's GDP stands at around $120 billion (based on recent estimates), but growth has been uneven, averaging 2-3% annually in recent years. Unemployment hovers near 4.5%, below the national average, yet labor force participation remains low at about 57%, limiting overall potential.

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Governmental Employment Percentages:

Government employment (including federal, state, and local levels) plays an outsized role in New Mexico's workforce. As of August 2025, government jobs total 195,700, representing 21.6% of total nonfarm employment. This is higher than the national average of around 15%, driven by federal entities like Los Alamos and Sandia National Laboratories, military bases, and state/local administration.

Breakdown estimates include:

• Federal: ~12% of government jobs (largely research and defense).

• State: ~30% (education and administration).

• Local: ~58% (schools, municipal services).​​​​​​​​​​​​​​​​​​​

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This high dependency exposes the state to federal budget fluctuations and limits private innovation. While government roles provide stability, they often grow slower than private opportunities and contribute less to taxable economic multipliers.

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Goals for Stable Economic Growth:

The plan aims for balanced, resilient growth that mitigates boom-bust cycles associated with extractive industries.

Specific targets starting in 2027:

• Achieve 3-4% annual real GDP growth through 2032.​

• Increase private sector employment by 10,000 jobs annually, totaling 50,000 net new jobs by 2032, focusing on high-wage sectors for New Mexico.

• Reduce government employment as a percentage of the total workforce to 18% by 2030 and 15% by 2035, primarily by accelerating private job creation (targeting a 4-5% annual private growth rate versus 1-2% for government).

• Reduce statewide unemployment to 3.5% and poverty to 12%.

• Boost per capita income by 25%, with emphasis on rural and underserved areas.

• Boost labor force participation to 62% by 2032 through targeted training and incentives.

• Diversify economy: Reduce energy sector reliance from ~20% of GDP to 15%, while growing tech/manufacturing to 10% and tourism/film to 12%.

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Strategies to Boost the Private Sector and Decrease the Government Employment Percentage:

The core approach is to expand the private sector faster than the public, diluting the government share without mandating layoffs. This involves incentives, partnerships, and reforms to make New Mexico more attractive for business investment. No direct privatization of core government functions is proposed; instead, focus on enabling private alternatives in adjacent areas (e.g., private R&D labs complementing federal ones).

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1. Industry-Specific Growth Initiatives:

• Renewable Energy and Advanced Manufacturing: Leverage New Mexico's Solar/Fusion/Wind resources and proximity to national labs. Offer tax credits for companies investing in green tech hubs in Albuquerque and Las Cruces. Target: Attract 5 major firms by 2029, creating 15,000 jobs.

• Film and Creative Industries: Expand the existing film tax rebate program (capped at 30%) and build soundstages in rural areas. Partner with streaming giants for ongoing productions. Target: Double film-related jobs from 5,000 to 10,000 by 2030.

• Aerospace and Tech: Capitalize on Spaceport America and Virgin Galactic. Provide grants for startups in drone tech and AI. Establish a "Tech Corridor" from Santa Fe to Las Cruces. Target: 10,000 new high-tech jobs by 2032.

• Tourism and Agriculture: Promote eco-tourism and agritech. Invest in water-efficient farming tech to combat drought. Target: Grow tourism jobs by 20% (to 100,000 total) through marketing campaigns.

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2. Workforce Development and Education:

• Partner with universities (UNM, NMSU) and community colleges for vocational programs in high-demand fields like coding, renewable installation, and biotech. Subsidize tuition for residents entering private sector apprenticeships.

• Launch a "Return to NM" campaign to attract expatriates with relocation bonuses tied to private job acceptance.

• Address low labor participation by utilizing childcare subsidies and eldercare, enabling more workers to join the private market.

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3. Business Incentives and Regulatory Reforms:

• Implement a phased tax reduction: Lower corporate tax from 5.9% to 4.5% by 2030 for companies creating 50+ jobs.

• Streamline permitting: Reduce business startup time from 30 days to 10 via online portals.

• Create enterprise zones in underserved areas (e.g., rural counties) with property tax abatements.

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4. Infrastructure Investments:

• Allocate $500 million (from state funds and federal grants) for broadband expansion to reach 95% coverage by 2029, enabling remote private work.

• Upgrade transportation: Improve I-25 and rail links to facilitate logistics and manufacturing.

• Water infrastructure: Invest in desalination and recycling to support agriculture and industry growth.

5. Public-Private Partnerships (PPPs):

• Encourage PPPs for non-core services, such as private management of state parks or tech support for government ops, freeing public resources while creating private jobs.

• Transition some federal lab spin-offs to fully private entities, reducing government payroll indirectly.

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Plan to Decrease Government Employment Percentage:

The reduction will occur organically as private jobs outpace government growth:

• Baseline Projection: Without intervention, government jobs grow at 1% annually (due to population), maintaining ~21% share if private grows similarly.

• Targeted Growth: Aim for 4% annual private expansion via above strategies, adding ~28,000 jobs/year initially. By 2030, total employment reaches ~1.05 million, with government at ~210,000 (18% share).

• Monitoring: Annual audits by the Economic Development Department to track ratios. If private growth lags, adjust incentives (e.g., additional rebates).

• No Cuts Policy: Emphasize job creation over reduction; retrain public workers for private roles if voluntary.

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Implementation Timeline:

• Year 1 - 2027 (Launch Year): Pass enabling legislation, establish oversight board, roll out initial tax incentives and workforce programs.

• Year 2-3 - 2028-2029 (Build Phase): Infrastructure projects begin; first industry hubs operational; monitor job creation quarterly.

• Year 4-6 - 2030-2032 (Scale Phase): Evaluate progress; adjust based on metrics; aim for self-sustaining growth.

• Funding: $2 billion over 5 years from state budget reallocations, bonds, and federal matches. ROI expected via increased tax revenues from private expansion.

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Metrics for Success and Risks:

• Success Indicators: GDP growth, job creation rates, government % decline, export increases (target 20% rise in non-energy exports).​

• Risk Mitigation: Diversification reduces oil dependency; contingency funds for economic downturns; bipartisan support to ensure continuity.

• Evaluation: Independent annual reviews by a third-party economist to assess stability and adjust as needed.

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Conclusion:

This plan positions New Mexico for enduring prosperity, leveraging its unique assets while transitioning to a more dynamic, private-driven economy.

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(Last Edited & Published Oct. 2025)

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