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Home / Articles / News / Local News /  Incentive Dis
Abe Lederman
Abe Lederman’s company, Deep Web Technologies, designs specialized search engines for government and corporations.

Incentive Dis

Boom-time job program fails in recession

July 22, 2009, 12:00 am

Businesses in Albuquerque get steak. In Santa Fe, they get hamburger.

A crucial state job-creation program on average awarded Bernalillo County $39 per person in aid, versus $8 per person for Santa Fe County, according to the most recent report on the program. That report is five years old, but the basic ratio still holds true today.

“There’s not a lot in Santa Fe—it’s pretty small,” state Economic Development Department spokeswoman Toni Balzano says.

Furthermore, the Job Training Incentive Program, known as JTIP, is ill-suited to tackle the problems of most businesses in this recession. The program helps companies defray the cost of training new employees. Only expanding businesses are eligible. Had layoffs? You’re outta luck.

Last September, Santa Fe’s Economic Development Division gave the local Chamber of Commerce a contract worth up to $30,000 to help businesses here write proposals for JTIP funds. City EDD Director Fabian Trujillo says his staff modeled the program on a similar effort in Albuquerque.

In the first nine months of the chamber’s contract, only one Santa Fe company got JTIP funds. Deep Web Technologies, which has received JTIP assistance since 2007, received $20,251 to hire and train one new employee.

That means the chamber was awarded more money to manage the program than it was able to help secure for local businesses.

“That’s a little bogus,” local businessman Marc Choyt says. “There’s probably better places for that money to have gone.” Choyt co-owns Reflective Images, Inc., a jewelry business, which took $11,000 in JTIP funds in 2005.

Chamber Business Development Director Val Alonzo, who runs the JTIP assistance program, did not return cell phone messages. Chamber President Simon Brackley says the nature of the contract changed after the market crash.

“In the past six months our focus has really been on saving jobs rather than creating new ones,” Brackley says. He says approximately 40 businesses have received direct consultation in that time.

Trujillo says the contract does not allow the chamber to pick winners. “It’s not just for chamber [member] businesses. That’s important. It’s for all businesses in the city of Santa Fe that qualify,” he says. “We want Val to be busy.”

Over the past five years, 13 Santa Fe businesses have received $650,000 in JTIP funds. The companies used that money to hire and train 84 employees.

Deep Web Technologies has been the biggest single recipient, with $184,000 in JTIP funds used to train 11 new employees. Company President Abe Lederman says that without JTIP, he would not have been able to afford all those hires. He says he learned of the program while researching state incentives.

The recession has not forced Lederman to lay off any workers or trainees. But other JTIP beneficiaries have been unable to retain their workforce.

Reflective Images, for instance, is down to nine from 11 employees since the beginning of 2009, Choyt says. And again, companies that are shrinking—or just holding on—are ineligible for JTIP aid. “That’s my one problem with it,” Choyt says.
Deep Web’s Lederman agrees. “If you have a company that’s not expanding, you’re not going to benefit,” Lederman says. “They need to be more flexible.”

Only manufacturing companies and businesses that export most of their goods or services can apply for JTIP funds. This year, the New Mexico Legislature expanded eligibility to “green” businesses that install solar panels, for example, or produce organic food. State Sen. Eric Griego, D-Bernalillo, who spearheaded that change, doesn’t know of any such companies that have yet applied.

A six-member board meets monthly to approve new JTIP projects—approximately 65 each year around the state. In the last 12 months, only two Santa Fe companies benefited. Another company—Divine Beauty, Inc., which markets a treatment for acne scars—was approved in September but never utilized the money.

WEB EXTRA: Chart showing training funds dispersed to Santa Fe companies. Click HERE (35k .pdf)

 

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