This is the second in a series of articles examining the issues surrounding the April 3 election on whether to raise the gross receipts tax 1/4 percent in Doña Ana County to help fund Spaceport America.
Many opponents of the proposed gross receipts tax increase that would help fund Spaceport
Many tax supporters are quick to counter that people don’t support the spaceport if they don’t support the tax, because, without that funding source, there won’t be enough money to construct the spaceport.
Interviews with state lawmakers reveal that, at the very least, securing additional funding from the state would be difficult. The state has already pitched in about $115 million toward the project’s estimated $198 million cost. Another $25 million Gov. Bill Richardson wants from lawmakers has encountered steep resistance for two years, but he has pledged to fund it from his share of capital outlay money next year if lawmakers don’t approve it during the languishing special session.
The
If the
Speaker of the House Ben Lujan, D-Nambé, said such a request from
“We want to help that side of the state, but we want to see local support there. I think it would be very hard for us to come back and do more,” Lujan said. “I’m very much in favor of (the spaceport), but I know legislators are very concerned that if the tax doesn’t pass, then the local support’s not there.”
Sen. John Arthur Smith, D-Deming and co-chair of the powerful Senate Finance Committee, said locals should approve the tax.
“The state has already stepped up to the plate,” he said. “If the locals don’t want to step up to the plate, why should we do it?”
Smith is a supporter of the spaceport, and didn’t discount the possibility of additional state funding if county voters don’t approve the tax. But he spoke at length about massive increases in the state’s budget in recent years. Smith joins many lawmakers in fearing the current budget is not sustainable.
“We’re rapidly exhausting resources at the state level,” he said, adding that, if the tax isn’t approved, “I won’t say the state is going to step up to the plate again, but we’ll do what we can.”
Some locals think state should pay it all
State officials view the spaceport as a project that will help the entire state, but will primarily benefit Doña Ana, Sierra and Otero counties, with the
Most local officials agree, and have endorsed the tax increase, but a few have a different perspective: They view the spaceport as a state project that will benefit the entire state.
Doña Ana County Commissioner Oscar Vasquez Butler has repeatedly pushed for a small, statewide tax increase to help fund the spaceport, saying rural residents of his district are too poor to take on such a large share of the funding.
Las Cruces City Councilor Ken Miyagishima sides with
“Why do we have statewide bond issues for educational purposes that benefit other parts of
Commissioner Bill McCamley, on the other hand, has pointed out that residents of
Many lawmakers began the 2006 legislative session opposed any state funding for the project. The funding mechanism that is in place – the state money coupled with local tax increases – was the result of a hard-fought compromise reached by Richardson and lawmakers. New Mexico Economic Development Secretary Rick Homans said that’s part of why approval of the tax increase in
“A defeat on April 3 would put the spaceport in serious jeopardy,” he said. “A final decision about whether to proceed would come from the governor, with input from the legislative leadership and our anchor tenant, Virgin Galactic, after thorough consideration of all the options.”
Other funding options?
But there aren’t many other funding opportunities. State officials have asked for federal money for the project, but there has been no commitment at this point. At most, the federal government is expected to pitch in $25 million and, with the always-rising costs of construction materials, that money might be needed on top of the state funds and the local tax revenue.
Some have suggested Virgin should build its own spaceport, but that won’t happen. The company signed a memorandum of agreement this week stating its intent to pay rent and other fees over the course of a 20-year lease at Spaceport
Locals or the state will have to pay
That means, if the tax fails, the $49 million will have to be picked up by the state, if the project is to continue.
The spaceport is located in the district of Sen. Leonard Lee Rawson, R-Las Cruces and the minority whip. He said if the tax fails and the governor pushes for additional state funding, he believes the Legislature will provide it. That’s because, Rawson said, “You can’t quit. You’re into the project. You’ve got to finish it.”
“If the local community does not step up to raise the gross receipts tax, then I’m confidence the Legislature and state will make it happen,” Rawson said.
Rawson worked tirelessly to reach the compromise that resulted in the state funding and the statute that allows the local tax increase. He wouldn’t say whether he supports raising taxes for the spaceport.
“I worked hard to get the public a chance to decide this, and I don’t want to influence that,” Rawson said. “I’ve supported the spaceport the whole way.”
Rawson said he has competing philosophies: He supports the economic development the spaceport will bring, but also supports less taxation.
Many of Rawson’s colleagues aren’t as optimistic that the state will provide additional funding if the tax fails.
“I hope the tax passes,” said Sen. Mary Jane Garcia, D-Doña Ana and the majority whip. “If it doesn’t, I guess we go back to the drawing table.”
Garcia said she would also fight for more state money if the tax failed, but didn’t sound as optimistic that her colleagues from the rest of the state would approve it.
“I would hope that they would be willing,” she said.
House doesn’t want to give more
Lujan, the leader of the House, isn’t the only member of that chamber who doesn’t want to give any more state money to the project. On the other side of the aisle, many Republicans don’t think the project should have received any public funding.
State Rep. Justine Fox-Young, R-Albuquerque, said she is “adamantly opposed” to additional state funding for the project. Though Virgin has invested more than $200 million to develop its spacecraft, Fox-Young said she wants to see a larger investment from the private sector in the spaceport, which she said was originally considered part of the funding plan when the state began considering building a spaceport decades ago.
“As far as I can tell, it is an ill-formed concept with no business plan and no private sector investment,” she said. “As an alternative, the state could use the $100 million-plus in question to provide real tax relief, to provide badly needed resources to law enforcement and to our languishing schools.”
House Minority Whip Dan Foley, R-Roswell, agreed.
“This whole thing has been a farce from the beginning,” he said. “There are a million other things we could do with that money.”
Fox-Young said she believes
“Realistically, if the tax increase fails in Doña Ana County, I think Gov. Richardson is prepared to mortgage our schools, our police departments, our museums and our parks to find whatever amount of money he thinks is necessary to buy the Democrat presidential primary election,” Fox-Young said.
Homans and proponents counter by talking about two studies that predict widespread economic development that will create thousands of jobs and brings hundreds of millions of dollars into the economy, and say that will increase the tax base and generate more money to meet the needs of New Mexicans.
Homans said he doesn’t believe tax supporters will have to ask the Legislature for additional funding.
“At this point we are optimistic about the vote and hopeful that the community sees that it will realize a big return in the form of jobs and opportunities from a small investment, a 1/4-cent tax,” he said.