Rail Runner tax snafu could hamper spaceport funding

The newest snafu over whether to raise local taxes to pay for operation of the Rail Runner could harm the state’s ability to secure approval in Sierra and Otero counties for a similar tax to help fund Spaceport America.

In addition, the question of how to come up with millions each year to operate the commuter train when federal money runs out in 2009 threatens to further strain the state’s finances as it tries to complete the two massive projects and come up with some $500 million for needed road construction and maintenance.

State Transportation Secretary Rhonda Faught publicly proposed earlier this week implementation of a local gross receipts tax in Bernalillo, Santa Fe, Sandoval and Valencia counties to come up with $25 million a year to pay for the train’s operating costs. The state has provided some $400 million for acquisition and construction of tracks and trains, but the federal government agreed to pay for the first three years of operations.

In this election season, the presidential candidate and Gov. Bill Richardson quickly put out a news release saying there will be no tax increase.

“Gov. Richardson is not interested in a tax increase,” said spokesman Gilbert Gallegos. “The… expansion will move forward as planned, and the governor expects to consider different options, other than a tax increase, to pay for its operations in the future.”

“Different options” appears to be code for additional state money for a project that is never projected to be solvent. The discussion of how to pay for operations comes as the state is extending the line, which already runs from Belen to Bernalillo, into Santa Fe, which will increase operating costs.

If not for the train, why a local tax down south?

The funding plan for the spaceport includes local buy-in through a gross receipts tax. Voters in Doña Ana County narrowly approved a 1/4 increase in April, but county commissions in Sierra and Otero counties haven’t even scheduled elections. Though the majority of the local funding was to come from the more populated Doña Ana County, that money can’t be spent until a tax district is created – and that requires approval of a tax increase in at least one of the other counties.

Commissioners in Sierra and Otero counties have stated their intentions to hold elections, but there’s a political reality to face: The more liberal Doña Ana County barely approved the tax. It’s going to be an even tougher sell in those counties.

Many spaceport tax opponents have questioned why, since the spaceport is a state project, officials didn’t seek a statewide tax increase. The state has been quick to counter that it has pitched in well over $100 million through legislative appropriations.

There is also a local buy-in for the Rail Runner. Communities have to build their own train stations. But that didn’t require increased tax burden on residents of those counties.

The governor’s unwillingness to agree to a tax for a Northern New Mexico project when he supported a similar tax for one in Southern New Mexico is certain to be used by opponents as an argument against the proposed increases in Otero and Sierra counties, making the campaign to secure the final piece of funding for the spaceport even more difficult. Southern New Mexico has always felt – for the most part, justifiably – that it gets the shaft from Santa Fe.

Many will wonder why they have to pay increased taxes for the spaceport when those who benefit from the commuter rail don’t have to pay increased taxes for it. That argument was used by opponents during Doña Ana County’s tax election, but the governor’s renewed opposition to a local Rail Runner tax will provide additional fuel.

To top off that frustration, the state is spending on the commuter rail more than three times what it has committed to the spaceport.

Bigger problems

But there’s a larger reality here. Both projects were driven by a governor who swept into the Roundhouse in 2003 looking to build a platform for a presidential run. Richardson cited the state’s economic growth in this week’s presidential debate when he said he could make social security solvent through economic development alone.

As Richardson attempts to leave the state, one has to wonder whether the political will remains to see the projects through to fruition. Many question whether that determination even should exist.

The train’s funding is stretched. In rejecting the tax plan, the governor provided no alternatives for coming up with the annual $25 million. In addition, two recent fatal accidents south of Albuquerque highlight another reality the Richardson Administration didn’t plan for – increased use of the tracks necessitates upgrades of aging crossings.

How many upgrades? How will those projects be funded?

Lawmakers are going to be asked for more money for the spaceport as well. They’ve already been told the Spaceport Authority will need more than $3 million next year to operate as it expands and begins construction. State officials also want another $15 million they sought but didn’t get for a road to the spaceport earlier this year.

And what if the taxes in Sierra and Otero counties aren’t approved? That’s another $10 million the state will have to find to meet the spaceport’s cost estimate of just under $200 million. If construction is further delayed, that cost estimate could rise.

Looming over all of that is the fact that lawmakers don’t know how they’re going to come up with the $500 million they need for road construction and maintenance, and an increasing worry that the state budget has grown beyond its britches in recent years.

Richardson had the vision – or, depending on who you talk with, the foolishness – to sell these two projects, but he doesn’t plan to stay in the state long enough to see them through to fruition. If he wins the presidency or decides to leave the governor’s office for another job, and as the spaceport and commuter-rail funding questions become increasingly difficult, what’s going to happen?

Though it’s still expanding, the Rail Runner is already operational and will be difficult to shut down. For that reason, and because the other project is hidden away in the desert hundreds of miles from Santa Fe, if lawmakers think a project has to die, they may be more likely to kill the spaceport.