Spaceport tax debate reaches climax in New Mexico this week

In April 2007, voters in Doña Ana County, New Mexico, which includes Las Cruces, voted for a quarter-percent gross receipts tax that would be used primarily help fund construction of Spaceport America, with a portion going towards educational programs. A year later, voters in Sierra County, where the spaceport is located, approved the same tax. Now, however, both uses of the tax are under fire in the New Mexico Legislature, with bills pending to alter the use of those tax funds that must pass before the legislature adjourns on Thursday or die.

In the state Senate, Sen. Lee Cotter (R-Las Cruces) introduced SB 172, a bill that would require funds collected by the tax for the spaceport (three quarters of the tax revenue) be used solely for debt service on the bonds sold for spaceport construction or to begin paying off those bonds early. Currently, any excess if funds after interest is paid—currently about $600,000 per year—is used to support spaceport operations. The bill has made it through one Senate committee and is pending approval of another.

In an op-ed in the Las Cruces Sun-News a week ago, Cotter argued that the use of tax funds to support spaceport operations constituted a “bait and switch” for taxpayers. “Every dollar spent on daily operations extends the increase in taxes for years to come, injuring our local taxpayers,” he wrote.

Rick Holdridge, chairman of the board of the New Mexico Spaceport Authority, countered in an op-ed Sunday in the same newspaper that using the funds for spaceport operations is crucial right now, as the spaceport transitions to operations. “Now is not the time to withdraw support, just when the spaceport is poised to start paying dividends,” he wrote, adding that the decision to use the tax revenue in this way has been approved by local officials several times in public meetings.

The other one quarter of the spaceport tax revenue that is earmarked to support educational programs is also under scrutiny in Santa Fe. HB 13 would count that revenue when making calculations of what state aid the districts receive; in essence, the bill would reduce the aid districts in the two counties receive by the amount of funding they get from the spaceport tax—a cut from what they’re getting now. That bill has already passed the New Mexico House and is in committee in the state Senate. That is causing concern in Las Cruces, the Sun-News reported Sunday, although the impact of the bill, even if it does pass and is signed into law by Gov. Susana Martinez, remains unclear.

5 comments to Spaceport tax debate reaches climax in New Mexico this week

  • amightywind

    It saddens me that New Mexico tax payers impoverish themselves for the benefit of businessmen that should be raising capital on their own in the private market. But, a fool and his money are soon parted. That Steve Wynn can raise more raise capital in the junk bond market for his casinos than these space entrepreneurs can for there spaceport is telling. What a boondoggle!

    • Aware

      It never ceases to amaze me the ability of people to delude themselves.

      We’ve given these billionaires millions to build the Spaceport they intend to run for a profit (that will be paid to themselves – not the people who funded it) that has never even begun operations (and probably never will). So we paid to build it and the roads to it. Now we’ll pay to run it. All in the hopes that someday – if they ever begin any real operations besides tours of an empty building run from ABQ – they will hire a janitor or two and a couple of security guards at minimum wage from the local area.

      Meanwhile, their 20 mile no commercial zone is threatening to stop local ranchers from even running cattle on their own land in the area and they have threatened to use eminent domain to get rid of the few remaining residents who no longer have any water thanks to the drain of the aquifier accomplished during the building of the “Spaceport”.

      • common sense

        Who are “we” who gave to the billionaires? You don’t vote in New Mexico? I am not taking party but I don’t think you/we “gave” anything. But if you did give something then you may want to question your and New Mexico’s motivations, your rights, etc.

        Also can you share a link/information about those who did not want to give anything? How many were you opposing it? Approving?

        Do you have a 401k or similar? Because in that case you gave $$$ to banks that may, actually will, never repay you, never mind give you a job.

  • Fred Willett

    Bad investment or not the real issue is the attempt to change the rules half way through the game.
    Issue 1 the spaceport.
    The legislation seeks to stop payments to the development before it becomes operational. That’s a good way to force them out of business loosing all the investment and forcing VG to go elsewhere. But then I guess AW will be able to say “see I told you so”
    Issue 2. The good citizens voted to raise their taxes to improve their schools. The legislation proposes to penalize them by reducing government grants so they get exactly the same funding as before – but continue to pay the extra tax.
    That’s plain highway robbery.
    I suppose the good citizens should have voted to reduce their tax contribution instead. The politicians would then have felt obliged to provide extra funds to make up the difference. No?

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