Economy of New Mexico

Economy of New Mexico
Statistics
GDP $94.8 billion[1]
GDP per capita
 $45,465 (based on estimated 2015 population of 2,085,109)[1]
Population below poverty line
 17.1%[2]
0.453[3]
Labor force
 934,200[4]
Unemployment 6.6%[5]
Public finances
Revenues $4,413.988 million[6]
Expenses $6,080 million[7]

Oil and gas production, tourism, and federal government spending are important drivers of New Mexico's economy. State government has an elaborate system of tax credits and technical assistance to promote job growth and business investment, especially in new technologies.

In 2014 New Mexico's Gross Domestic Product was $94.8 billion.[1]

In 2014 the per capita personal income was $45,465 (rank 37th in the nation).[1]

In 2005 the percentage of persons below the poverty level was 18.4%.[8] The New Mexico Tourism Department estimates that in Fiscal Year 2006 the travel industry in New Mexico generated expenditures of $6.5 billion.[9]

Major industries/products

New Mexico Industries by 2004 Taxable Gross Receipts (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 livestock 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 Mexico 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 extensive 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.

New Mexicans derive much of their income from mineral extraction. Even before European exploration, Native Americans mined turquoise for making jewelry.[10] After the Spanish introduced refined silver alloys they were incorporated into the Indian jewelry designs. New Mexico produces uranium ore (see Uranium mining in New Mexico), manganese ore, potash, salt, perlite, copper ore, beryllium, and tin concentrates.

Energy

Further information: Solar power in New Mexico

New Mexico is rich in fossil fuel and alternative 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 Information Administration, State crude oil output is typically just over 3 percent of the annual U.S. total, and natural 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 Mexico'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.[11]

The Waste Isolation Pilot Plant (WIPP) is located in the Delaware Basin, and is used to store nuclear waste.

New Mexico Wind Generation (GWh, Million kWh)
Year Total Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
2009 1,547 142 149 163 145 108 90 94 123 95 163 133 140
2010 1,832 156 94 168 199 193 139 102 120 136 144 182 199
2011 2,089 183 186 210 248 235 203 118 92 113 159 196 145
2012 219 213 220 193 194

Source:[12][13]

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 ordnance. Important high-technology industries include lasers, data processing, solar energy and semiconductors.

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 revenue collected from the state. This rate of return is higher than any other state in the Union.[14] The federal government 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 observatories 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 employment base.

Tourism and Retirement

Virgin Galactic, the first space tourism company to develop 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 had its inaugural launch of the VSS Enterprise spaceship in 2008, and has begun launching ordinary citizens since early 2009.[15][16][17]

The New Mexico Tourism Department estimates that in Fiscal Year 2006 the travel industry in New Mexico generated expenditures of $6.5 billion.[9]

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 increasingly gaining notice as a health-conscious community, and contains many hospitals and a high per capita number of massage and alternative therapists. The warm, semiarid climate has contributed to the exploding population of Albuquerque, attracting new industries to New Mexico. By contrast, many heavily Indigenous American and Hispanic rural communities remain economically underdeveloped.

Film and television

Feature films have used New Mexico as a location since The Indian School in 1898. Financial incentives and construction of facilities (such as The Albuquerque Studios)[18] 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 calendar year in history.[19] The New Mexico Film Office assists the industry in coming to and filming in the state.[20]

In 2011 the state placed a cap of $50 million on tax credits for the film industry. The cost of funding the incentive soared from just $3.4 million in 2004 to $76.7 million in 2009.[21]

Facilities

Garson Studios is an established film production facility is on the campus of Santa Fe University of Art and Design that has helped turned out many feature-length films with its soundstage and high tech equipment.

Film and television post-production is also growing.[22]

Taxes

Beginning in 2008, personal income tax rates for New Mexico range from 1.7% to 4.9%, within four income brackets.[23] Beginning in 2007, active-duty military salaries are exempt from the state income tax.[24]

New Mexico imposes a Gross Receipts Tax on businesses. This resembles a sales tax but unlike the sales taxes in many states it applies to services as well as tangible 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 cities.[25] As of July 1, 2008 the combined tax rate ranged from 5.125% to 8.4375%.[26]

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 applied 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 residence is remodeled or sold.[27]

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 incentives are based on job creation.[28]

New Mexico law allows governments to provide land, buildings, and infrastructure to businesses to promote job creation. Several municipalities have imposed an Economic Development Gross Receipts Tax (a form of Municipal Infrastructure GRT) that is used to pay for these infrastructure improvements and for marketing their areas.[29]

The state provides financial incentives for film production.[30][31] 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.[32]

Largest employers

(Not ranked by size)

Source: Economic Research & Analysis Bureau New Mexico Department of Labor[33]

Notes

  1. 1 2 3 4 "U.S. Dept of Commerce Bureau of Economic Statistics". U.S Dept of Commerce Bureau of Economic Statistics. 2016-06-14. Retrieved 2016-10-28.
  2. ↑ http://www.census.gov/compendia/statab/2011/ranks/rank34.html
  3. ↑ http://factfinder.census.gov/servlet/DTTable?_bm=y&-context=dt&-ds_name=ACS_2009_1YR_G00_&-_geoSkip=0&-CONTEXT=dt&-mt_name=ACS_2009_1YR_G2000_B19083&-tree_id=307&-_skip=0&-redoLog=false&-geo_id=04000US01&-geo_id=04000US02&-geo_id=04000US04&-geo_id=04000US05&-geo_id=04000US06&-geo_id=04000US08&-geo_id=04000US09&-geo_id=04000US10&-geo_id=04000US11&-geo_id=04000US12&-geo_id=04000US13&-geo_id=04000US15&-geo_id=04000US16&-geo_id=04000US17&-geo_id=04000US18&-geo_id=04000US19&-geo_id=04000US20&-geo_id=04000US21&-geo_id=04000US22&-geo_id=04000US23&-geo_id=04000US24&-geo_id=04000US25&-geo_id=04000US26&-geo_id=04000US27&-geo_id=04000US28&-geo_id=04000US29&-geo_id=04000US30&-geo_id=04000US31&-geo_id=04000US32&-geo_id=04000US33&-geo_id=04000US34&-geo_id=04000US35&-geo_id=04000US36&-geo_id=04000US37&-geo_id=04000US38&-geo_id=04000US39&-geo_id=04000US40&-geo_id=04000US41&-geo_id=04000US42&-geo_id=04000US44&-geo_id=04000US45&-geo_id=04000US46&-geo_id=04000US47&-geo_id=04000US48&-geo_id=04000US49&-geo_id=04000US50&-geo_id=04000US51&-geo_id=04000US53&-geo_id=04000US54&-geo_id=04000US55&-geo_id=04000US56&-geo_id=04000US72&-search_results=01000US&4-_showChild=Y&-format=&-_lang=en&-_toggle=
  4. ↑ http://research.stlouisfed.org/fred2/data/NMLFN.txt
  5. ↑ http://research.stlouisfed.org/fred2/data/NMUR.txt
  6. ↑ http://www.census.gov/govs/statetax/1032nmstax.html
  7. ↑ http://nasbo.org/LinkClick.aspx?fileticket=w7RqO74llEw%3d&tabid=79
  8. ↑ "Persons Below Poverty by New Mexico County". University of New Mexico, Bureau of Business and Economic Research. 2008-01-18. Retrieved 2008-10-13.
  9. 1 2 "Travel Economic Impact Model" (PDF). New Mexico Tourism Department. Retrieved 2008-10-02.
  10. ↑ Anderson, Lee. " The History of American Indian Jewelry " – Anderson's Americana Indian & Western Shows
  11. ↑ "EIA State Energy Profiles: New Mexico". 2008-06-12. Retrieved 2008-06-24.
  12. ↑ EIA (July 27, 2012). "Electric Power Monthly Table 1.17.A.". United States Department of Energy. Retrieved 2012-08-15.
  13. ↑ EIA (July 27, 2012). "Electric Power Monthly Table 1.17.B.". United States Department of Energy. Retrieved 2012-08-15.
  14. ↑ "Federal Spending Received Per Dollar of Taxes Paid by State, 2005". Tax Foundation. 2007-10-09. Retrieved 2008-09-21.
  15. ↑ Virgin Galactic's website overview of what is to come
  16. ↑ "Spaceports" from web blog with link to BBC video
  17. ↑ Scott Allen, "Richard Branson – The Rebel Billionaire and the Ultimate Multipreneur" from about.com
  18. ↑ Schneider, Wolf "Facilities fuel New Mexico production boom". The Hollywood Reporter. – September 18, 2007.
  19. ↑ "New Mexico Filmography". New Mexico Film Office. Retrieved September 11, 2007.
  20. ↑ New Mexico Film Office
  21. ↑ Filmworks
  22. ↑ Seimers, Erik "Special effects company to open Duke City branch". Albuquerque Tribune. – May 27, 2007.
  23. ↑ "Personal Income Tax Rates" (PDF). State of New Mexico Taxation and Revenue Department. 2008-08-25. p. 3. Retrieved 2008-09-04.
  24. ↑ "Governor Richardson Announces New Laws to Take Effect; New State laws go into effect June 15, 2007" (PDF) (Press release). Office of the Governor, State of New Mexico. 2008-06-14. Retrieved 2008-09-05. HB 436 Working Families Tax Credit...eliminates taxes on active duty military salaries.
  25. ↑ "Gross Receipts Taxes FAQ" (PDF). State of New Mexico, Taxation and Revenue Department. 2006-08-06. Retrieved 2008-10-09.
  26. ↑ "Gross Receipts Tax Rate Schedule, Effective July 1, 2008 through December 31, 2008" (PDF). State of New Mexico, Taxation and Revenue Department. 2008-06-05. Retrieved 2008-10-09.
  27. ↑ "Property Tax FAQ" (PDF). State of New Mexico, Taxation and Revenue Department. 2007-08-07. Retrieved 2008-10-09.
  28. ↑ "Business Assistance: Incentives". State of New Mexico Economic Development Department. Retrieved 2008-06-02.
  29. ↑ Domrzalski, Dennis (2003-09-19). "28 New Mexico towns tap into $45M in incentives". New Mexico Business Weekly. OCLC 30948175. Retrieved 2008-06-02.
  30. ↑ "Governor Signs Film Production Tax Incentives". New Mexico Economic Development Department. 2002-03-04. Archived from the original on 2007-10-12. Retrieved September 12, 2007.
  31. ↑ "New Mexico's Film Incentives". New Mexico Film Office. Retrieved 2008-06-02.
  32. ↑ Hay, Kiera (2007-12-10). "State's Incentives Keep Film Industry Growing". Albuquerque Journal. OCLC 9392114. Retrieved 2008-06-02.
  33. ↑ New Mexico Department of Labor statistics
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