Economy of New Mexico New Mexico State Quarter Oil and gas production, tourism, and federal government spending are important drivers of New Mexico’s eco- nomy. State government has an elaborate system of tax credits and technical assistance to promote job growth and business investment, especially in new technologies. In 2007 New Mexico’s Gross Domestic Product was $76.178 billion (preliminary figure).[1] In 2007 the per capita personal income was $31,474 (rank 43rd in the na- tion).[2] In 2005 the percentage of persons below the poverty level was 18.4%.[3] The New Mexico Tourism Department estimates that in Fiscal Year 2006 the travel industry in New Mexico generated expenditures of $6.5 billion.[4] Major industries/products New Mexico Industries by 2004 Taxable Gross Re- ceipts (000s) Retail Trade 12,287,061 Construction 5,039,555 Other Services (excluding Public Administration) 4,939,187 Professional, Scientific and Technology Services 3,708,527 Accommodation and Food Services 2,438,460 Wholesale Trade 2,146,066 Health Care and Social Assistance 1,897,471 Utilities 1,654,483 Mining and Oil and Gas Extraction 1,238,211 Manufacturing 926,372 Information and Cultural Industries 849,902 Unclassified Establishments 725,405 Real Estate and Rental and Leasing 544,739 Finance and Insurance 254,223 Transportation and Warehousing 221,457 Public Administration 159,013 Educational Services 125,649 Arts, Entertainment and Recreation 124,017 Admin & Support, Waste Management & Remediation 73,062 Agriculture, Forestry, Fishing and Hunting 71,853 Management of Companies and Enterprises 48,714 Totals 39,473,429 Source: State of New Mexico Department of Labor Agricultural and mining Cattle and dairy products top the list of major animal products of New Mexico. Cattle, sheep, and other live- stock graze most of the arable land of the state throughout the year. Limited, scientifically controlled dryland farming prospers alongside cattle ranching. Major crops include hay, nursery stock, pecans, and chile peppers. Hay and sorghum top the list of major dryland crops. Farmers also produce onions, potatoes, and dairy products. New Mex- ico specialty crops include piñon nuts, pinto beans, and chiles. The Carlsbad and Fort Sumner reclamation projects on the Pecos River and the nearby Tucumcari project provide adequate water for limited irrigation in those areas of the desert and semiarid portions of the state where scant rainfall evaporates rapidly, generally leaving insufficient water supplies for large-scale irrigation. Located upstream of Las Cruces, the Elephant Butte Reservoir provides a major irrigation source for the ex- tensive farming along the Rio Grande. Other irrigation projects use the Colorado River basin and the San Juan River. Lumber mills in Albuquerque process pinewood, the chief commercial wood of the rich timber economy of northern New Mexico. Mineral extraction: New Mexicans derive much of their income from mineral extraction. Even before European exploration, Native Americans mined turquoise for making jewelry.[5] After the Spanish introduced re- fined silver alloys they were incorporated into the Indian jewelry designs. New Mexico produces uranium ore (see From Wikipedia, the free encyclopedia Economy of New Mexico 1 Uranium mining in New Mexico), manganese ore, potash, salt, perlite, copper ore, beryllium, and tin concentrates. Energy New Mexico is rich in fossil fuel and renewable energy resources. Major petroleum and natural gas deposits are located in the Permian Basin in southeast New Mexico and in the San Juan Basin in the northwest. The San Juan Basin Gas Area is the largest field of proved natural gas reserves in the United States. According to the Energy In- formation Administration, State crude oil output is typic- ally just over 3 percent of the annual U.S. total, and natur- al gas output is nearly 10 percent of the U.S. total. New Mexico also contains major coal deposits in the northwest corner of the State. Nine tenths of electricity production in the State is from coal-fired plants. Much of New Mex- ico’s geologically active Rocky Mountain region holds geothermal power potential, and pockets of the State are suitable for wind power development. New Mexico’s southern deserts offer the State’s most concentrated solar power potential.[6] The Waste Isolation Pilot Plant (WIPP) is located 26 miles (42 km) southeast of Carlsbad, in the Chihuahuan Desert. Here nuclear wastes are buried deep in carved out salt formation disposal rooms mined 2,150 feet (655 m) underground in a 2,000-foot (610 m) thick salt formation that has been stable for more than 200 million years. WIPP began operations on March 26, 1999. Manufacturing Industrial output, centered around Albuquerque, includes electric equipment; petroleum and coal products; food processing; printing and publishing; and stone, glass, and clay products. Defense-related industries include ord- nance. Important high-technology industries include lasers, data processing, and solar energy. Government and military Federal government spending is a major driver of the New Mexico economy. In 2005 the federal government spent $2.03 on New Mexico for every dollar of tax reven- ue collected from the state. This rate of return is higher than any other state in the Union.[7] The federal govern- ment is also a major employer in New Mexico providing more than a quarter of the state’s jobs. Many of the federal jobs relate to the military; the state hosts three air force bases (Kirtland Air Force Base, Holloman Air Force Base, and Cannon Air Force Base); a testing range (White Sands Missile Range); and an army proving ground and maneuver range (Fort Bliss - McGregor Range). In addition to the National Guard, New Mexico has a New Mexico State Defense Force. Other minor locations include the New Mexico Army National Guard Headquarters in Santa Fe county and the National Guard Armory in far northern Rio Rancho in Sandoval county. Other federal installations include national observat- ories and the technology labs of Los Alamos National Laboratory (LANL) and Sandia National Laboratories (SNL). SNL conducts electronic and industrial research on Kirtland AFB, on the southeast side of Albuquerque. These installations also include the missile and spacecraft proving grounds at White Sands. Other federal agencies such as the National Park Service, the United States Forest Service, and the United States Bureau of Land Management are a big part of the state’s rural employ- ment base. Tourism and retirement Virgin Galactic, the first space tourism company to devel- op commercial flights into space, has decided to put its world headquarters and mission control at Spaceport America in Upham, New Mexico (25 miles (40 km) south of Truth or Consequences); Virgin Galactic will have its inaugural launch of the VSS Enterprise spaceship in 2008, and will begin launching ordinary citizens in early 2009.[8][9][10] The New Mexico Tourism Department estimates that in Fiscal Year 2006 the travel industry in New Mexico generated expenditures of $6.5 billion.[11] The private service economy in urban New Mexico, especially in Albuquerque, has boomed in recent decades. Since the end of World War II, the city has gained an ever-growing number of retirees, especially among armed forces veterans and government workers. It is also in- creasingly gaining notice as a health conscious com- munity, and contains many hospitals and a high per capita number of massage and alternative therapists. The warm, semiarid climate has contributed to the exploding popula- tion of Albuquerque, attracting new industries to New Mexico. By contrast, many heavily Native American and Hispanic rural communities remain economically underdeveloped. Movie and TV Feature films have used New Mexico as a location since The Indian School in 1898. Financial incentives and con- struction of facilities (such as The Albuquerque Studi- os)[12] have created opportunities for locally based crew members with production reaching an all time high in 2007. As of the end of August 2007, 30 major projects have been filmed in the state, more than in any other cal- endar year in history.[13] Garson Studios The most established Movie produc- tion facility is on the campus of the College of Santa Fe. Garson Studios has helped turned out many feature length films with its soundstage and high tech equipment. url = http://www.garsonstudios.com/ • 14,000 Square Foot Soundstage • Dimensions: 127’ l x 110’ w x 33’ h • Hard Cyclorama 77’ l x 55’ w x 24’ h • 1600 amp./ 3-phase • Production offices • Wardrobe facilities • Ample phone/fax lines • High-speed Internet • Storage lockups • From Wikipedia, the free encyclopedia Economy of New Mexico 2 Ample fenced parking • Trailer hook-ups • Student in- terns • Short and long-term rentals New Mexico Filmmaker’s Intensive url = ht- tp://www.filmmakersintensive.com/ Funded in part by a $1 million grant from the state of New Mexico, the New Mexico Filmmakers Intensive builds on the national repu- tation of the Moving Image Arts Department at the Col- lege of Santa Fe. With state-of-the-art equipment, world- class facilities and an extraordinary faculty of film in- dustry professionals, the goal of the New Mexico Film- makers Intensive is to support and cultivate emerging voices in American cinema right here in New Mexico. Film and television post-production is also growing with companies such as Sony Imageworks establishing a permanent home in the state.[14] Taxes Beginning in 2008, personal income tax rates for New Mexico range from 1.7% to 4.9%, within four income brackets.[15] Beginning in 2007, active-duty military salaries are exempt from the state income tax.[16] New Mexico imposes a Gross Receipts Tax on busi- nesses. This resembles a sales tax but unlike the sales taxes in many states it applies to services as well as tan- gible goods. Normally the business passes the tax on to the purchaser. There is a tax imposed by the state and there may also be local taxes imposed by counties and cit- ies.[17] As of July 1, 2008 the combined tax rate ranged from 5.125% to 8.4375%.[18] Property tax is imposed on real property by the state, by counties, and by school districts. In general personal property is not taxed. The taxable value of property is 1/3 of the assessed value. A tax rate of about 30 mills is ap- plied to the taxable value, resulting in an effective tax rate of about 1%. In the 2005 tax year the average millage was about 26.47 for residential property and 29.80 for non- residential property. Assessed values of residences cannot be increased by more than 3% per year unless the resid- ence is remodeled or sold.[19] Economic incentives New Mexico provides a number of economic incentives to businesses operating in the state, including various types of tax credits and tax exemptions. Most of the in- centives are based on job creation.[20] New Mexico law allows governments to provide land, buildings, and infrastructure to businesses to promote job creation. Several municipalities have imposed an Eco- nomic Development Gross Receipts Tax (a form of Muni- cipal Infrastructure GRT) that is used to pay for these in- frastructure improvements and for marketing their areas.[21] The state provides financial incentives for film pro- duction.[22][23] The New Mexico Film Office estimated at the end of 2007 that the incentive program had brought more than 85 film projects to the state since 2003 and had added $1.2 billion to the economy.[24] Largest employers (Not ranked by size) • • College of Santa Fe • Boy Scouts of America • U.S. Bureau of Land Management (BLM) • Mesa Air Group • Navajo Nation • Los Alamos National Laboratory • Wal-Mart • New Mexico State Government • New Mexico Department of Transportation • Northern New Mexico College • • PNM Resources and PNM Electric & Gas Services • Presbyterian Health Plan • Sandia National Laboratories • Intel • University of New Mexico • New Mexico State Government • Kirtland Air Force Base • • Albertson’s Supermarket • Kmart Corporation • U.S. Postal Service • Wal-Mart • Navajo Refining Company • U.S. National Park Service (NPS) • Allsup’s Convenience Stores • • Immigration and Naturalization Service (INS) • Lockheed Engineering and Sciences • New Mexico State University • Lovelace Healthcare • Pepsi Bottling • New Mexico Institute of Mining and Technology • U.S. Army (Fort Bliss) Source: Economic Research & Analysis Bureau New Mexico Department of Labor[25] Notes [1] "New Mexico Gross Domestic Product by Industry". University of New Mexico, Bureau of Business and Economic Research. 2008-06-11. http://www.unm.edu/~bber/econ/st-gsp1.htm. Retrieved on 2008-10-09. [2] "Per Capita Personal Income by State". University of New Mexico, Bureau of Business and Economic Research. 2008-04-04. http://www.unm.edu/~bber/ econ/us-pci.htm. Retrieved on 2008-10-13. [3] "Persons Below Poverty by New Mexico County". University of New Mexico, Bureau of Business and Economic Research. 2008-01-18. From Wikipedia, the free encyclopedia Economy of New Mexico 3 http://www.unm.edu/~bber/demo/ SAIPEallagepov05.htm. Retrieved on 2008-10-13. [4] "Travel Economic Impact Model". New Mexico Tourism Department. http://www.newmexico.org/ department/research/docs/ Economic_Impact_FY2006.pdf. Retrieved on 2008-10-02. [5] Anderson, Lee. " The History of American Indian Jewelry " - Anderson’s Americana Indian & Western Shows [6] [http http://tonto.eia.doe.gov/state/ state_energy_profiles.cfm?sid=NM "EIA State Energy Profiles: New Mexico"]. 2008-06-12. http http://tonto.eia.doe.gov/state/ state_energy_profiles.cfm?sid=NM. Retrieved on 2008-06-24. [7] "Federal Spending Received Per Dollar of Taxes Paid by State, 2005". Tax Foundation. 2007-10-09. http://www.taxfoundation.org/research/show/ 266.html. Retrieved on 2008-09-21. [8] Virgin Galactic’s website overview of what is to come [9] "Spaceports" from web blog with link to BBC video [10] Scott Allen, "Richard Branson - The Rebel Billionaire and the Ultimate Multipreneur" from about.com [11] "Travel Economic Impact Model". New Mexico Tourism Department. http://www.newmexico.org/ department/research/docs/ Economic_Impact_FY2006.pdf. Retrieved on 2008-10-02. [12] Schneider, Wolf"Facilities fuel New Mexico production boom". The Hollywood Reporter. - September 18, 2007. [13] "New Mexico Filmography". New Mexico Film Office. http://www.nmfilm.com/filming/filmography/. Retrieved on 2007-09-11. [14] Seimers, Erik"Special effects company to open Duke City branch". Albuquerque Tribune. - May 27, 2007. [15] "Personal Income Tax Rates" (PDF). State of New Mexico Taxation and Revenue Department. 2008-08-25. 3. http://www.tax.state.nm.us/forms/ year08/pitrates_2005_2008.pdf. Retrieved on 2008-09-04. [16] Office of the Governor, State of New Mexico (2008-06-14) (PDF). Governor Richardson Announces New Laws to Take Effect; New State laws go into effect June 15, 2007. Press release. http://www.governor.state.nm.us/press/2007/june/ 061407_04.pdf. Retrieved on 2008-09-05. "HB 436 Working Families Tax Credit...eliminates taxes on active duty military salaries." [17] "Gross Receipts Taxes FAQ". State of New Mexico, Taxation and Revenue Department. 2006-08-06. http://www.tax.state.nm.us/oos/ GrossReceiptsTaxFAQ.pdf. Retrieved on 2008-10-09. [18] "Gross Receipts Tax Rate Schedule, Effective July 1, 2008 through December 31, 2008". State of New Mexico, Taxation and Revenue Department. 2008-06-05. http://www.tax.state.nm.us/pubs/ GrossReceiptsRates/grt_rates_july_2008.pdf. Retrieved on 2008-10-09. [19] "Property Tax FAQ". State of New Mexico, Taxation and Revenue Department. 2007-08-07. http://www.tax.state.nm.us/oos/ PropertyTaxFAQ.pdf. Retrieved on 2008-10-09. [20] "Business Assistance: Incentives". State of New Mexico Economic Development Department. http://www.edd.state.nm.us/businessAssistance/ incentives/index.html. Retrieved on 2008-06-02. [21] Domrzalski, Dennis (2003-09-19), "28 New Mexico towns tap into $45M in incentives", New Mexico Business Weekly, OCLC 30948175, http://www.bizjournals.com/albuquerque/stories/ 2003/09/22/story2.html, retrieved on 2008-06-02 [22] "Governor Signs Film Production Tax Incentives". New Mexico Economic Development Department. March 4, 2002. http://www.nmpartnership.com/ press-releases/ article.php?id=1022&title=Governor+Signs+Film+Production+T Retrieved on 2007-09-12. [23] "New Mexico’s Film Incentives". New Mexico Film Office. http://www.nmfilm.com/filming/incentives/. Retrieved on 2008-06-02. [24] Hay, Kiera (2007-12-10), State’s Incentives Keep Film Industry Growing, Albuquerque Journal, OCLC 9392114, http://www.abqjournal.com/AED/ 268427business12-10-07.htm, retrieved on 2008-06-02 [25] New Mexico Department of Labor statistics Retrieved from "http://en.wikipedia.org/wiki/Economy_of_New_Mexico" Categories: Economy of New Mexico From Wikipedia, the free encyclopedia Economy of New Mexico 4 This page was last modified on 1 May 2009, at 04:04 (UTC). All text is available under the terms of the GNU Free Documentation License. (See Copyrights for details.) Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a U.S. registered 501(c)(3) tax-deductible nonprofit charity. Privacy policy About Wikipedia Disclaimers From Wikipedia, the free encyclopedia Economy of New Mexico 5