Richardson claims on N.M. accomplishments largely true

By Bill Adair
Published on Friday, May 25th, 2007 at 2:31 p.m.

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"I used tax cuts to help create over 80,000 jobs in New Mexico."

Bill Richardson, Thursday, May 10th, 2007.

Ruling: Mostly True | Details

New Mexico moved "up to" sixth in the nation in job growth.

Bill Richardson, Thursday, May 10th, 2007.

Ruling: Mostly True | Details

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SUMMARY: New Mexico Gov. Bill Richardson boasts that he raised teacher salaries and cut taxes, which attracted new jobs to the state. He can accurately take credit for raising teacher pay and cutting taxes, and he’s correct that the state has added 80,000 new jobs since he has been in office. But it's a stretch to attribute the job gains to his tax-cutting.

There's no question that Richardson has brought energy and enthusiasm to the governor's office in New Mexico. A burly guy who often prefers hugs to handshakes, Richardson has worked hard to make the state more attractive for new businesses.

After he became governor in 2003, he persuaded the Democratic legislature to boost teacher salaries, cut income taxes and create tax incentives for businesses.

On teacher pay, it didn’t take much of an increase to show improvement. His state ranked near the bottom for teacher pay – 46th – so even a modest raise translated into a significant jump in the rankings.

"You’ve got to keep in mind that it’s relative to how poor the state was doing," said Gabriel Sanchez, a political science professor at the University of New Mexico. "Really, any progress you would make would look big."

In his TV commercials and campaign speeches, Richardson says the state went from 46th to 29th , but he doesn't point out that the improved ranking of 29th comes from a projection from a state teachers group that supported his gubernatorial campaigns and is run by one of his big supporters. The ranking of 46th is from the 2002-03 National Education Association survey of teacher pay. The newest NEA ranking, with 2004-05 statistics, shows New Mexico climbing only to 40th.

Because the data showing the improvement comes from a supportive group and cannot yet be independently verified with government data, we are not making a ruling on the claim.

On economic issues, Richardson portrays himself as a centrist Democrat who understands the value of cutting taxes. He says in one of his TV commercials that he used his tax cuts "to help create" 80,000 new jobs. In his speeches, he rattles off favorable stats, often noting that the once-sluggish state ranked as high as sixth in the nation in job growth.

But Richardson naturally doesn’t mention the fine print. Although the state was ranked sixth in August 2006, it most recently was ranked 15th. And his commercials and speeches don’t point out that his tax-cutting, the centerpiece of his economic development program, was made possible because of rising fuel costs around the country.

The higher fuel prices have brought a gusher of tax revenue and royalties to New Mexico, the nation’s sixth-largest oil producer. The money fattened the state's coffers, allowing Richardson to cut income taxes and provide new incentives for companies to move to the state.

It is the paradox of New Mexico: "Having gas prices so high across the country has been good for our state," said Sanchez.

Statistics from the Bureau of Labor Statistics indicate that New Mexico gained 75,800 jobs from December 2002 to July 2007, which is slightly lower than Richardson's claim.

As our friends at FactCheck.org note in this article , Richardson has consistently cited the higher number, even when the actual number was lower.

For our ruling, however, we'll rely on the current 75,800 and call it mostly true.

But it's difficult to calculate how big a role his tax cuts played in getting businesses to create those jobs.

Some economists say he’s exaggerating his role.

"I think all of the economic forces in play have benefited New Mexico. I think none of that has to do with Richardson's tax cuts," said Gerry Bradley, a former chief economist for the New Mexico Department of Labor who now works for a child advocacy group.

James Peach, an economics professor at New Mexico State University, said that many factors make a company decide to add jobs and that tax incentives often play only a modest role. Indeed, much of the job growth in the state began before Richardson became governor, Peach said.

Still, Peach said Richardson’s tax incentives and income tax cuts have created a favorable atmosphere for business that is a stark change from the state’s mentality in the mid-1970s, when state officials refused to help a promising young company named Microsoft.

"The climate here has changed considerably since then," Peach said. "Bill Richardson has been a big part of that. He’s not the whole story, but he’s been a big part of it."