Last again: Digital financial publication ranks New Mexico as the worst-run state

For the second year in a row, a national online financial publication has named New Mexico as the worst-run state in the nation.

The New York-based 24/7 Wall St., which has ranked the best and worst-run states for the past seven years, referred to New Mexico’s revenue shortfall and its downgrade by a leading credit-rating agency as major reasons for giving New Mexico the dubious distinction.

“Following a large and unexpected tax shortfall in the state’s fiscal 2016 and 2017 budgets, Moody’s downgraded the state’s credit rating and outlook,” the entry on New Mexico says.

But 24/7 Wall St. offered one glimmer of hope: “Despite the outlook, according to the credit agency, New Mexico has a strong history of balancing its budget, and the state’s debt levels are manageable and on the decline.”

The section on New Mexico goes on to say, “The likelihood of living in poverty is very high for individuals without a high school diploma. In New Mexico, fewer than 85 percent of adults have a high school diploma, nearly the lowest high school attainment rate, and more than 20 percent of state residents live in poverty, the second highest rate of all states. Like most poorly-run states, New Mexico’s labor market is struggling. The state’s labor force declined over the last five years, and 6.5 percent of workers were unemployed as of October, the highest October jobless rate of all states.”

Actually, the state unemployment rate was higher in October. According to the latest statistics from the federal Bureau of Labor, New Mexico had the second highest rate of unemployment, with a rate of 6.7 percent. Only Alaska had a higher rate with 6.8 percent unemployed. A news release from New Mexico’s Workforce Solutions Department said that total non-farm employment went down by 2,900 jobs, or 0.3 percent, between October 2015 and October 2016.

A spokesman for Gov. Susana Martinez on Tuesday blamed the global decline in oil and gas prices for the low rating.

“As the study points out, states like New Mexico took a massive hit because of the steepest oil and gas crash in our time,” Michael Lonergan said. “This not only hurt the state’s budget, but also led to thousands of job losses. It’s why the governor has worked since day one to diversify our economy and create jobs in the private sector — so that our state isn’t reliant on just one or two industries, which has been the case for decades.”

24/7 Wall St., in its introduction to this year’s feature on best- and worst-run states, said, “The very resources that help some states can become a burden to those that are overdependent on them. The massive decline in global oil prices from the second half of 2014 through 2015 has taken a serious toll on state oil revenues. Should prices persist at these low levels, the socioeconomic benefits from the oil boom in these states may soon evaporate.”

The publication also said, “While some states’ economic fortunes are closely tied to the rise and fall of individual industries, which are often outside of the government’s control, each state must make the best of its own situation. Governments, as stewards of their own economies, need to prepare for the worst, including the collapse of a vital industry.”

In his response, Lonergan said “The study also takes into account poverty. As the governor has always said, in order to break the decades-long cycle of poverty, we have to improve our schools and provide every kid with a great education. That’s why she’s going to continue fighting for reforms that challenge the decades-long failed status quo.”

The rankings, according to 24/7 Wall St., are based on factors of financial health and fiscal responsibility, as well as unemployment, poverty, and crime — “conditions state governments are tasked with managing and improving.”

In May, 24/7 Wall St. ranked New Mexico near the top of its list of worst states for business. Only four states got lower ratings on that list.

“New Mexico’s business climate is not very inviting,” the publication said. “Between a sluggish economy and relatively low-skilled workforce, the state likely struggles more than most to attract businesses. … One factor that likely contributes to high poverty and unemployment in the state is the relatively low adult educational attainment. Only 26.4 percent of adults in New Mexico have at least a bachelor’s degree. …”

The state that the authors consider the best-run is North Dakota, which has received that honor for the past five years, followed by Minnesota and Nebraska.

As for states neighboring New Mexico, Texas ranked seventh, Colorado eighth, and Arizona 35th.

The Santa Fe New Mexican is a sister-paper of The Taos News. Contact Terrell at (505) 986-3037 or sterrell@sfnewmexican.com.