{"id":1456,"date":"2007-03-22T14:49:00","date_gmt":"2007-03-22T20:49:00","guid":{"rendered":"http:\/\/www.nmpolitics.net\/index\/2007\/03\/county-tax-is-key-element-of-spaceport-funding-plan\/"},"modified":"2007-03-22T14:49:00","modified_gmt":"2007-03-22T20:49:00","slug":"county-tax-is-key-element-of-spaceport-funding-plan","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2007\/03\/county-tax-is-key-element-of-spaceport-funding-plan\/","title":{"rendered":"County tax is key element of spaceport funding plan"},"content":{"rendered":"

This is the first 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 Do\u00f1a Ana County to help fund Spaceport America<\/a>.<\/span> <\/p>\n

<\/o:p><\/p>\n

\"\"<\/a>When staffers for Gov. Bill Richardson<\/a> first pitched the proposal to create a commuter rail<\/a> to the Legislature, they underestimated the cost by almost $300 million.<\/p>\n

<\/o:p><\/p>\n

So when the governor asked for $114.5 million during the 2006 legislative session to help fund Spaceport America<\/st1:place><\/st1:country-region>, many lawmakers balked. Some publicly questioned how they could trust the administration\u2019s assertion that the spaceport would cost $225 million or less.<\/p>\n

<\/o:p><\/p>\n

Ultimately, three conditions were placed on $100 million granted by the Legislature. Before it could be spent, the state had to sign a lease agreement with an \u201canchor tenant\u201d \u2013 ostensibly Virgin Galactic<\/a>, obtain a license from the Federal Aviation Administration to operate a commercial spaceport, and obtain a cost estimate of $225 million or less for the facility.<\/p>\n

<\/o:p><\/p>\n

State Rep. Joseph Cervantes<\/a>, D-Las Cruces, was instrumental in getting the conditions placed on the funding. He said he had concerns \u201cbased on the overruns with the Rail Runner project,\u201d and at least two of the conditions eventually placed on the funding came out of meetings he had with Economic Development Secretary Rick Homans.<\/p>\n

<\/o:p><\/p>\n

This week, the state met the first of those conditions, which officials say proves this project is different. The official cost estimate for the spaceport came in at $198 million. It was developed by DMJM\/AECOM, the firm designing the facility, and was reached after officials decided to build one runway instead of two.<\/p>\n

<\/o:p><\/p>\n

The estimate includes construction of Virgin Galactic\u2019s facility; all roads, water, wastewater, electrical and other lines to the spaceport; and the cost of leasing the land from ranchers through 2007, plus an up-front payment to the ranchers and other money set aside for eventual purchase of the land.<\/p>\n

<\/o:p><\/p>\n

Beginning next year, the $87,500 annual cost of leasing the land will be included in the spaceport\u2019s annual budget, Homans said, so future lease payments are not included in the $198-million estimate.<\/p>\n

<\/o:p><\/p>\n

As the April 3 spaceport tax election approaches in Do\u00f1a<\/st1:placename> Ana<\/st1:placename> County<\/st1:placename><\/st1:place>, there\u2019s still a lot of confusion about how the spaceport would be funded. Here\u2019s a rundown:<\/p>\n

<\/o:p><\/p>\n

State contributes 70 percent of funding<\/span><\/p>\n

<\/o:p><\/p>\n

Funding starts with the $114.5 million appropriated by the Legislature in 2006. In addition to the conditional $100 million approved during that session, the Legislature granted $14.5 million for immediate use. About $4 million was spent to construct the temporary facility that was used for the UP Aerospace<\/a> launch last year.<\/p>\n

<\/o:p><\/p>\n

Earlier this month, the Legislature removed the FAA-license requirement from $33 million of the $100 million it approved in 2006. Assuming it signs a lease with Virgin Galactic, that will allow the state to begin constructing a major road from the Upham exit off Interstate 25 in Do\u00f1a<\/st1:placename> Ana<\/st1:placename> County<\/st1:placename> to the spaceport in Sierra<\/st1:placename> County<\/st1:placetype><\/st1:place> later this year.<\/p>\n

<\/o:p><\/p>\n

The state can\u2019t spend the remaining $67 million until it obtains the FAA license and the lease.<\/p>\n

<\/o:p><\/p>\n

On top of that $114.5 million, Richardson<\/st1:place><\/st1:city> asked during the 2006 and 2007 legislative sessions for an additional $25 million for the road, but didn\u2019t get it. That\u2019s why he asked for the change that would allow the $33 million to be spent on the road this year.<\/p>\n

<\/o:p><\/p>\n

That $25 million is one of the reasons Richardson<\/st1:place><\/st1:city> brought lawmakers back for the current special session, and he has said he\u2019ll use his own capital outlay money next year if lawmakers don\u2019t approve the funding this year.<\/p>\n

<\/o:p><\/p>\n

That would bring the total funding made available by the state to $139.5 million, or just over 70 percent of the funds needed. That leaves $58.5 million, assuming the estimate is accurate.<\/p>\n

<\/o:p><\/p>\n

Do\u00f1a<\/st1:placename> Ana<\/st1:placename> County<\/st1:placename><\/st1:place> residents pay 25 percent of cost<\/span><\/p>\n

<\/o:p><\/p>\n

The next planned funding component is the local gross receipts tax increase in the three counties surrounding the spaceport \u2013 Do\u00f1a Ana, Sierra and Otero. The tax money would actually be used to pay back, over 20 years, bonds the state would sell to finance construction of the project.<\/p>\n

<\/o:p><\/p>\n

\n

In Do\u00f1a<\/st1:PlaceName> Ana<\/st1:PlaceName> County<\/st1:PlaceName><\/st1:place>, voters are being asked to approve a 1\/4 percent increase, which would cost the average taxpayer about $30 each year. It would generate about $6.5 million annually for 20 years. Of that, state law allows counties to keep up to 25 percent for use on local spaceport-related projects. Do\u00f1a<\/st1:PlaceName> Ana<\/st1:PlaceName> County<\/st1:PlaceName><\/st1:place> commissioners have approved a resolution stating their intent to invest that 25 percent in the local school districts for space-related programs.<\/p>\n

\n

<\/o:p><\/p>\n

After that money is set aside and interest and financing costs are taken out, about $49 million would be left, over the course of the 20-year tax, for construction of the spaceport, Homans said. That\u2019s about 25 percent of the money needed to meet the cost estimate.<\/p>\n

<\/o:p><\/p>\n

That would leave $9.5 million.<\/p>\n

<\/o:p><\/p>\n

Sierra and Otero commissioners are also considering asking voters to approve gross receipts tax increases to help fund the spaceport. Though neither commission has voted to take the issue to voters, Homans said he has verbal commitments that it will happen.<\/p>\n

<\/o:p><\/p>\n

If Otero<\/st1:placename> County<\/st1:placetype><\/st1:place> voters approve the 1\/8 percent tax increase Homans says will be proposed, it will generate $6.6 million for construction of the spaceport.<\/p>\n

<\/o:p><\/p>\n

That would leave $2.9 million.<\/p>\n

<\/o:p><\/p>\n

If Sierra<\/st1:placename> County<\/st1:placetype><\/st1:place> voters approve the 1\/4 percent gross receipts tax increase Homans says will be proposed, it will generate $2.3 million for construction of the spaceport.<\/p>\n

<\/o:p><\/p>\n

That would leave about $600,000 unfunded.<\/p>\n

<\/o:p><\/p>\n

Federal funds are also a possibility<\/span><\/p>\n

<\/o:p><\/p>\n

Homans and staffers have met with New Mexico<\/st1:state>\u2019s congressional delegation in Washington<\/st1:city>, D.C.<\/st1:state><\/st1:place> to ask for federal funds for the project. Though no money has been appropriated, Homans said he is optimistic.<\/p>\n

<\/o:p><\/p>\n

\u201cWe are confident they are coming, and the delegation has been very encouraging,\u201d Homans said.<\/p>\n

<\/o:p><\/p>\n

One proposal that will be made to Congress by the FAA is the creation of a federal fund for spaceport infrastructure grants, which would allow states to apply for federal dollars to help construct spaceports.<\/p>\n

<\/o:p><\/p>\n

U.S. Sen. Jeff Bingaman<\/a>, D-N.M., is optimistic about securing federal funds for Spaceport America<\/st1:place><\/st1:country-region>, said spokeswoman Jude McCartin.<\/p>\n

<\/o:p><\/p>\n

\u201cSen. Bingaman does support the spaceport,\u201d she said. \u201cHe is working with other members of the congressional delegation to secure funding for the infrastructure associated with it.\u201d<\/p>\n

<\/o:p><\/p>\n

U.S. Sen. Pete Domenici<\/a>, R-N.M., didn\u2019t sound so certain. He pointed out that a number of states are developing spaceports, and \u201cthere is a great deal of competition for attention and resources.\u201d He said the \u201cstate and local governments will have to determine to what extent they are willing to find the revenues to support the facility, and there will be much competition for what is likely to be scarce federal dollars.\u201d<\/p>\n

<\/o:p><\/p>\n

\u201cI have received the state\u2019s request for federal funding for the spaceport,\u201d Domenici said. \u201cIt will be reviewed along with all the other requests I have received for fiscal year 2008, which at this point total more than $1.4 billion. \u2026 I look forward to helping on the federal level where and when I can.\u201d<\/p>\n

<\/o:p><\/p>\n

What happens next?<\/span><\/p>\n

<\/o:p><\/p>\n

The immediate focus of officials trying to make the spaceport a reality is the April 3 election in Do\u00f1a<\/st1:placename> Ana<\/st1:placename> County<\/st1:placename><\/st1:place>. Sometime in the next few weeks, Homans said, he expects Virgin Galactic to sign a memorandum of understanding that will set the terms of a lease and be the precursor to the actual signing of the lease.<\/p>\n

<\/o:p><\/p>\n

The environmental impact statement necessary for the spaceport license is scheduled to be submitted to the FAA in May, and the state expects to obtain its license no later than the first quarter of 2008, Homans said. He expects the Otero and Sierra county commissions to vote to hold tax increase elections later this year or early next year.<\/p>\n

<\/o:p><\/p>\n

Meanwhile Virgin Galactic, which says it has invested more than $200 million in development of the spacecraft it will use to ferry paying passengers into space, plans to begin launches next year from an airport that has been converted to a spaceport in Mojave, Calif.<\/st1:state><\/st1:place> The company says it plans to move operations to Spaceport America<\/st1:place><\/st1:country-region> as soon as the facility is ready. Virgin has worked with the architects hired by the state to design the facility.<\/p>\n","protected":false},"excerpt":{"rendered":"

This is the first 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 Do\u00f1a Ana County to help fund Spaceport America. When staffers for Gov. Bill Richardson first pitched the proposal to create a commuter rail to the Legislature, they […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1456","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/1456","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/comments?post=1456"}],"version-history":[{"count":0,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/1456\/revisions"}],"wp:attachment":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/media?parent=1456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/categories?post=1456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/tags?post=1456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}