LEDA allows local governments to invest public money in private business ventures that benefit the community in specific ways, such as job creation. The New Mexico Municipal League helped lead the effort to get LEDA enacted in 1994, because the 106-city member association saw the benefits of empowering municipalities to participate in public-private partnerships that strengthened local economies.
Before LEDA, governments couldn’t devote public funds to privately sponsored economic development initiatives. LEDA changed that by letting municipalities pass a local ordinance that let them earmark proceeds from the 1/8 percent local-option gross receipts tax to publicly beneficial infrastructure projects.
LEDA’s most recent iteration augments such local efforts using money appropriated by the state Legislature and managed by the Economic Development Department. These state funds use the same mechanism and process: The state consigns money for an approved project to a local government body that acts as the fiscal agent.