If a New Mexico company wants to make and sell goods to every corner of the world, we shouldn't punish them with our tax structure, like we do now. We should adopt a single sales factor, just as 25 other states have done.
To ensure our veterans stay in New Mexico when they retire, to start a second career or maybe open a small business, I am proposing we exempt their retirement pension income from state taxes. They fought for us and we should fight to ensure they make New Mexico their home.
And while the large employers always dominate the news, we must never forget about our New Mexico small businesses. Last Christmas, I received a letter from Misty Castro. Misty owns a small business – Castro's Barber Shop – and was facing some really difficult choices. She could stay open and hope things turn around or close her doors after 11 years in business. She puts her heart and soul into that business, and she was at her wit's end.
I wrote her back to encourage her. This Christmas, I received another letter from Misty that I'd like to read to you. She says, “I was planning to close the doors and move on. You took the time to write back with such kind words, and you placed a small card that simply said, 'I believe in you.' When I start to feel overwhelmed and down, I look at my little 'I believe in you' note, pick my head up and keep going. Knowing someone believes in me makes it much easier.”
We need to make sure all small business owners know we believe in them. That's why I'm proposing that we give every New Mexico small business a $1,000 tax credit for every job created and retained over the next two years. In these uncertain times, if a small business owner is willing to take the risk to invest in a new job, then we should stand with them.
But competing for jobs goes further than just common-sense tax policy. We need to partner with our small business owners to help them hire and train new workers now. That is why I am also requesting a $4.75 million investment to further the success of our Job Training Incentive Program, or JTIP. This is a partnership with small businesses to help them train new employees and encouraging more hiring.
I'm also asking the Legislature to pass job-creating infrastructure projects, projects like the Paseo del Norte expansion we passed last session, or for water systems, roads, and dam repair. These types of projects create immediate jobs to kick-start our economy, while also building the infrastructure necessary for long-term economic development. And when we invest in local projects, let's make sure they're vetted, prioritized, and fully-funded.
We must also protect the public investments we've made, such as Spaceport New Mexico.
Taxpayers have already spent more than $209 million on this venture. But now, we risk losing this investment. The states competing with us for Spaceport business have passed a bill protecting companies from lawsuit abuse. Because we didn't pass this last year, a company called XCOR Aerospace chose to locate in Texas, over New Mexico. Again, it's about competition. Let's protect our investment in Spaceport and pass lawsuit abuse reform this session.
I am particularly hopeful we can pass these reforms to help our businesses compete because many of them face the daunting challenges imposed by the new federal health care law.
I didn't support Obamacare. But it's the law of the land. The election is over and the Supreme Court has ruled. My job is not to play party politics, but to implement this law in a way that best serves New Mexico.
That's why, last week, I announced we will expand Medicaid to cover up to 170,000 more lowincome New Mexicans. It was the right thing to do. It means expanding the health care safety net to more of those in need and moving care from costly emergency rooms into primary care offices. And, it does not jeopardize the state?s long-term budget outlook. In fact, given our unique population and programs, we can expect revenue increases that offset the cost of providing these services.
But I've been clear: Medicaid expansion is a federal government commitment and if they should ever break their funding promise, New Mexico will not pick up the burden of adults most recently added to the program at the expense of cutting health care for New Mexico kids. I will not let those kids pay the price. Another way New Mexico can level the playing field and become more competitive is to place a high emphasis on developing our workforce. We know that only 63 percent of our students are graduating within four years. Sixty-seven children drop out each and every school day. Those dropping out are not statistics – they are our children. They were once little boys and little girls who believed they could one day fly a spaceship to the moon, who once saw themselves becoming a doctor, or firefighter, or scientist, or whatever they dreamed they could be. But somewhere along the line, the system failed them. They lost hope and they dropped out, dashing those dreams. We have an obligation to focus on raising our graduation rate and better prepare our high school students for New Mexico's workforce or for college.
Let me tell you about a program called the Bridge. The Bridge program was created in response to the gaps that existed between the needs of a 21st century economy and the preparedness of high school graduates in Dona Ana County. It's a partnership between the local business community, their community college and state university, and their public schools. Together, they established the state's first early college high school. The school is located on land donated by New Mexico State University, and it offers dual credits that are accepted by Dona Ana Community College.
Every student who will graduate from this school not only earns a high school diploma, but they also earn an associate's degree and, in some cases, a work-ready certificate. That student is ready to be hired.
Today, we are issuing an achievement award for one of the Bridge students, Maria Guadalupe Carillo. Maria is the first person in her family to attend college. As a high school junior, Maria has already earned 48 college hours. And when she finishes this high school program, she will enter NMSU as a college senior. Congratulations, Maria. New Mexico is proud of you.
Since the Bridge Program has been operating, not one student has dropped out. And let's remember, 78 percent of the students are Hispanic, an incredible 63 percent are first-generation college students, and 43 percent come from low-income families. This is one tool helping the Las Cruces graduation rate rise from 51 percent to 72 percent in just the last four years.
This session, I'm pursuing a plan to take what the Bridge has accomplished in Dona Ana County and bring it to other areas of New Mexico.
For students looking to attend college, I'm asking the Legislature to embrace several other reform opportunities for our high school students, including $2.5 million to expand Advanced Placement courses to provide AP test waivers for low-income minority students, and to train more AP teachers so that every child in New Mexico has the opportunity to get a jump-start on college.
I'm also proposing a new, statewide dropout warning system to help parents and teachers identify students who are at-risk of dropping out long before they reach high school. When we talk about reducing our dropout rate, we need to tackle the root causes head-on.A recent study found that 88 percent of high school students who drop out were not proficient readers in the 3rd grade.
I have had the privilege of visiting thousands of New Mexico kids in classrooms. It's wonderful because those children are so full of hope. I ask them, what do you want to be, what do you want to do? And their eyes light up when they tell me, when they share with me their dreams. That' s why I think of those kids when I think of our dropout rate - Because those dreams get dashed if a child drops out.
We all know there are a lot of factors that determine one?s path in life, but it's difficult to overstate the importance of reading by third grade. Again, a child is four times more likely to drop out if they can't read by the end of 3rd grade. That's why I believe so strongly in early childhood literacy and why I believe we must do all we can to ensure New Mexico's children can read by the 3rd grade.
Last year I was pleased to make permanent the K3 Plus program, a program that helps struggling students with additional instruction and more help. We doubled the funding for Pre-K.
Our reforms are being recognized nationally. New Mexico has competed for the federal Race to the Top funding, seeking money that will be specifically targeted to help our youngest students master the basics.
This year, I am proud to say we were one of only 14 states to be awarded this funding - $25 million to help more children in New Mexico get the help they need in early education.