New Mexico bankers are backing a proposal by the new governor that they say would stimulate the state's technology economy and steer more high-tech customers their way.
Gov. Bill Richardson, a Democrat, has asked the New Mexico Legislature to approve an economic growth package that includes setting aside $200 million of state funds to provide equity to high-tech start-ups that want to grow in the state. Companies would be eligible for the funds if they could find venture capitalists to match the state's investments.
New Mexico is one of the few states not facing a budget shortfall, so lawmakers are expected to give the bill the green light in the legislative session that ends March 15. Start-ups could receive money as early as June if the bill passes, a spokesman for the governor's office said.
Bankers in the state say the initiative could be a boon to them as well, as more companies would look to them to park their capital while maturing into borrowers.
New Mexico "used to be a big oil and gas producer, but now we're heavily dependent on the federal government," namely through spending at two government defense-research labs, said William C. Enloe, the chairman and chief executive officer of the $891 million-asset Los Alamos National Bank.
Most of the emerging high-tech start-ups are the products of research done at the Los Alamos and Sandia National Laboratories in areas like superconductivity, computer modeling, and genome mapping, Mr. Enloe said.
Michael R. Stanford, the president and CEO of the $1.3 billion-asset First State Bancorp in Albuquerque, said too many founders have taken that technology and housed their companies in other states where they can find more venture capitalists willing to give them seed money. However, Gov. Richardson's proposal aims to get more of those companies to stay in New Mexico and to show venture capitalists that the state is anteing up extra money to expedite their growth.
Mr. Enloe said he expects that many of the start-ups will be profitable in short order - which would allow banks like his to lend them money for further growth. Currently Los Alamos National has about 100 seasoned high-tech companies as customers that have blossomed around the two government labs; about $40 million of its $770 million loan portfolio is dedicated to new high-tech companies there.
R. Greg Leyendecker, the president and CEO of New Mexico Bank and Trust in Albuquerque, said that, though his $337 million-asset bank may not capture a great deal of those start-up companies as customers, it could benefit from the subsequent growth in other industries supporting the high-tech field.
Plus, he said, the economy as a whole should get a lift, because the beneficiaries of the state's investment program should bring more high-paying jobs to the region.
"We have to do something in New Mexico - our economy is stagnant," Mr. Leyendecker said.
The two labs each recently got about $1 billion of additional funding thanks to the passage of the U.S. Homeland Security Act. But Mr. Leyendecker says much more is needed if New Mexico is to genuinely compete with its neighbors.
"Those new high-tech companies can bring in more people making $60,000 or more a year," he said, "and that can help all of us."
