"Make no mistake," Governor Bill Richardson said as he signed the legislation into law: "The point of cutting the personal income tax and the capital gains cut is to send an unmistakable message to business leaders--here in this state and across the nation: New Mexico is open for business."

New Mexico Secretary of Economic Development Rick Homans was just as upbeat when he explained to Expansion Management: "New Mexico is one of two states in the U.S. that is financially in the black, and can afford a tax cut of the magnitude that we have just enacted. This is roughly a 40% cut in our personal income tax, and we want to send a powerful message that we are very aggressive about recruiting new business to a strong economic climate here in New Mexico. At the same time we are certainly encouraging businesses that are already here to stay and expand in New Mexico."

What kinds of businesses would Homans prefer to recruit to his state? "We would like to attract an automotive manufacturer, and with our proximity to Mexico, we hope to create an international manufacturing campus on our border," said Homans. He added: "The billions of federal dollars that is being spent on research & development here at the labs, and through our three very good research universities, will attract high-tech businesses." New Mexico already has a very strong presence among aerospace firms, said Homans.

"I think the sweeping tax cuts are going to be very positive, because most states are raising taxes, while we are lowering them," said Fred Nathan Jr., founder and executive director of Think New Mexico, an independent think tank based in Santa Fe. Nathan also told Expansion Management: "I think there's just a different mood and a different culture now about attracting businesses to the state."