New Mexico Needs To Recruit More Immigrant Students, Think Tank Suggests

Students work out math problems during a class for Hispanic adults, Wednesday, March 16, 2005, at Cary High School in Cary, N.C. Even among Hispanics 16-to-19 who were educated entirely in the United States, 15 percent nationally are dropouts, compared with 12 percent for blacks and 8 percent for whites. (AP Photo/ Karl DeBlaker) ((AP Photo/ Karl DeBlaker))

SANTA FE, N.M. – New Mexico needs new ideas to jump start its economic development, including permitting international students to pay in-state tuition to study science, technology and business at public universities, according to a new report by an independent think tank.

Think New Mexico calls for establishing a scholarship program for international undergraduate students as a way of increasing the ranks of future entrepreneurs who could start businesses and create jobs in the state.

New Mexico lost about 43,000 jobs and 3,000 businesses from 2007 to 2011 because of the recession, and only recently has the state's economy started to rebound and gain jobs. But the report warns that many of the new jobs aren't higher wage positions such as in manufacturing. The state's economy also is at risk from government spending cuts because the federal government is the largest employer in New Mexico.

Immigrants start business at more than twice the rate of non-immigrants.

— Think New Mexico report

"So rather than picking economic winners and losers as many state governments attempt to do, New Mexico's state government might better serve its constituents by adopting policies that will supplement the number of entrepreneurs in New Mexico by attracting new ones," said the report released on Saturday.

"Immigrants start business at more than twice the rate of non-immigrants," said the think tank, which has successfully pushed initiatives such as a recent overhaul of the Public Regulation Commission and bringing price competition to the state's title insurance system.

The report pointed to a success story in Andy Lim, who came to Albuquerque from Taiwan in 2000, earned a degree at the University of New Mexico and founded a software company that now employs more than three dozen people in the state.

International students account for about 1 percent of the undergraduate enrollment at the University of New Mexico, about 2.4 percent at New Mexico Tech and 3.8 percent at New Mexico State University, according to the report.

Foreign students would pay annual out-of-state tuition of $20,688 to attend UNM but that would drop to $8,446 if the state offered scholarships providing the in-state tuition rate.

The report said North Dakota has greatly increased college enrollment of international students by providing them affordable in-state tuition. It could cost about $12 million a year for a similar scholarship program in New Mexico, according to the think tank.

The report questioned the effectiveness of New Mexico's traditional economic development strategy of providing upfront financial incentives to companies to move to the state.

Schott Solar came to New Mexico after receiving $16 million in incentives from the state, but closed its manufacturing plant on the edge of Albuquerque in 2012 because of foreign competition in the solar panel market.

The think tank recommended a different model of "post-performance" incentives, such as rebating up to 30 percent of a company's taxes after it creates new jobs because of relocating to New Mexico or when an in-state business expands its operations.

The group said Utah has successfully used that approach.

The report also said New Mexico should create a "one-stop business portal" for companies to go online for all necessary licenses issued by different government agencies. The goal is to reduce administrative red-tape for new businesses.

To pay for the initiatives, the think tank proposed eliminating some existing tax breaks.

One possibility, the report said, is to require buyers of recreational vehicles and all-terrain vehicles to pay the higher gross receipts tax rate rather than a lower rate for cars and trucks. That could generate more than $3 million a year.

Based on reporting by The Associated Press.

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