company towns in good company

By Walker Boyd

Rio Rancho real estate map

Rio Rancho, New Mexico’s third-largest city has been an easy target for environmentalists and critics of development-oriented growth. It relies completely upon the aquifer for its water supply; its municipal government is small (it didn’t incorporate until 1981) and arguably beholden to the interests of corporations like HP and Intel who have moved to Rio Rancho to take advantage of property tax abatement and other government-provided incentives.

But if ahistorical (and unchecked) growth is Rio Rancho’s signature, then  it is really a reflection of the same growth that Albuquerque has undergone. The City of Albuquerque’s population in 1980 was only 3/5 of what it is today.

Rio Rancho and Albuquerque’s stupendous growth underlies many problems they face going into the 21st century.

The other day I was poking around Zimmerman library’s scant collection of books and theses about Rio Rancho. A 1998 thesis by Patricia Pollock argued that “AMREP [American Real Estate and Petroleum, Rio Rancho’s developer]’s sole motive in purchasing land in New Mexico was to tap into the profit potential of land speculation.

Likewise, the growing residential market enhanced the investment potential for individual owners.” Another 1994 article talks about how Rio Rancho is a new template  for 21st-century company towns; in this light Rio Rancho is McDonald, Ohio, and Intel is this century’s Carnegie Steel.

But these arguments cast Rio Rancho as anomalous; despite isolated fears about groundwater and air pollution in Corrales, Intel’s presence has been generally well-received. Despite some frustrations about lost tax revenue, it’s hard to imagine anyone in Albuquerque or Rio Rancho city halls complaining about Intel and the overall boast it has supplied to the regional economy.

And when compared to SunCal, Eclipse Aviation, and any number of other failed developments, Intel comes across as both a model and an exemplar of successful development.

As Clearly New Mexico pointed out, the most recent SunCal bid for TIDD tax-breaks didn’t fail because of organized opposition to the development of the West Mesa, but because their proposal was transparently untenable; politicians know that tax breaks are only worth it so long as gross receipts tax from the actual construction of houses makes up for their losses.

We weren’t so lucky with Eclipse Aviation, but like other failed developments, Eclipse failed not because it was a bad idea but because it was in the wrong place at the wrong time: demand for private jets fell because of the recession, and beleaguered Albuquerque tax payers were no longer willing to subsidize their construction for non-existent customers.

Questions about water and the environment take the back seat to development and growth in cities like Albuquerque. But what if development is permanently stalled, and subsistence, let alone sustainability, becomes a priority?

Here, critics of growth for growth’s sake have more ground to stand on. A critical view of Intel and Rio Rancho yields a different insight on growth. The United States has enshrined freedom of trade in its Constitution, and as long as the status quo prevents New Mexico from assuming a more regional, self-sustaining outlook, national and international trends will determine the arc of development.

But critical uneasiness is well-founded. So long as our economy grew at a rapid pace, projects like the Hoover and Imperial Dams made sense to satisfy a growing population. But as population growth stagnates and housing prices fall, the wisdom of planning for more growth appears more circumspect.

India and China, two economies that are still rapidly growing, can afford audacious projects to mitigate the effects of drought. But the wisdom of such autocratic, growth-at-all-costs government, authoritarian by nature and with annual growth rates as the only clause in the social contract doesn’t fit New Mexico very well.

At the river’s bend: water and the future of urban New Mexico

By Walker Boyd

What are the politics of water? It is an element that fundamentally defines New Mexican notions of ‘the common good’. How does the law, political debate, the economy, and the historical elements of New Mexico’s diverse population influence the debate and its outcomes? This is the first part of an ongoing investigation into politics of water in New Mexico.

I lived on a farm for 6 months in Jaipur, a city in Rajasthan, just off India’s famous Thar desert. The family that owned the farm had built a clothing mill on their property in the 1960’s. Their mill used water drawn from wells beneath the farm to wash dye off the clothing during the manufacturing process. When I arrived, Only two of the farm’s nine wells were drawing water, and with the summer yet to come, the choice was clear: either the mill stops running, or the plants are no longer watered.

Across the road, a government official had an estate. If you walked to the northern edge of the farm, you could peer into his yard. There was a fountain, and some of the peacocks from the farm had already made their way on to the man’s estate. Sprinklers watered an expansive lawn and polo ground.

In 1919, the San Mateo Land Company purchased most of the old Alameda land grant for 19 cents an acre after a court ordered its sale to pay for taxes the community owed the state. In 1948, SMLC sold the 55,000 acres (fully half the size of modern-day Albuquerque) to the land-speculation company Brownfield & Koontz. The same acreage was sold again in 1959 for $10 million to AMREP, otherwise known as Rio Rancho Estates. AMREP sold half- and one-acre tracts of land to retirees and small-time investors, ultimately collecting about $200 million dollars from the sale of nearly 77,000 lots while retaining ownership of 25% of the land for future development.

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What Combined Reporting Really Means For New Mexico

Fat CatThe New Mexico Independent just got its hands on a newly-released report that puts the lie to the tired old argument that large corporations won’t come to or stay in states that make them pay higher corporate income taxes.

In a story today, NMI senior reporter Trip Jennings reports that Intel and many other companies who do business in New Mexico also choose to operate in states with higher corporate income tax rates.

From the story, based on a report compiled by the Washington-based Center for Budget and Policy Priorities:

At least 71 of the 78 multi-state corporations that have 250 or more employees in New Mexico have a facility in at least one state that mandates combined reporting.

Under combined reporting, a corporation’s nationwide profits are combined – that is, added together – and the state then taxes a share of that combined income, according to the Center.

So what companies are we talking about here? A quick look at the report shows that Comcast, Conoco Phillips, JC Penney Co., Bank of America, ABF Freight System, Wal Mart, Target, Whole Foods and Southwest Airlines are among the many corporations who pay more to do business elsewhere than they do in New Mexico.

You can read the full report here.

I find this report particularly important today, as the House Committee on Business and Industry meets to discuss HB 62, which would institute combined reporting and close the loopholes that currently let corporations shift their New Mexico profits out of state and avoid paying income taxes on them.

Many groups, including a coalition of lawmakers and a diverse group of health, education, social service and religious advocates say that New Mexico must act now to make corporations who do business in our state pay their fair share.

They’ll be at today’s hearing, as will lobbyists from the business community, still attempting to hold up the ridiculous argument that implementing combined reporting will make companies stay away from our state.

Keep checking back here for updates on what happens at today’s hearing and how HB 62 fares in the session.

The economic future of our state could depend on it!