No End in Sight for Spaceport America Tax

Sunset at the “Virgin Galactic Gateway to Space” terminal hangar facility at Spaceport America. (Credit: Bill Gutman/Spaceport America)

The tax increase that Sierra County voters approved in 2008 to support the construction of Spaceport America has no expiration date and no restrictions on the use of excess revenues that might be collected each year, according to the ordinance passed by county commissioners.

Critics of the $225 million project have claimed they were promised by spaceport supporters that the quarter of one percent increase would expire once bonds used to fund the spaceport are paid off in 2028.

However, neither the legislation passed in Sierra County nor a similar spaceport tax ordinance passed by Dona Ana County commissioners in 2007 contains an expiration date. Voters in both counties approved .25 cent tax increases.

Critics have also objected to the use of revenues collected in excess of what is needed to pay off the bonds to plug holes in the spaceport’s budget. They would prefer to see the funds put toward paying off the bonds early.

However, neither ordinance has any restrictions on the use of excess revenues to support spaceport operations.

New Mexico Spaceport Authority CEO Dan Hicks has said the authority needs the extra revenues to be able to compete with other spaceports across the nation. He also said the issue of continuing the tax beyond 2028 should be put before voters at that time.

Meanwhile, Hicks is looking for more state funds to support the spaceport’s operations.

While a $1 million appropriation, up from $375,900 this year, would still amount to a small portion of state spending, agency officials, who for years have talked about working toward financial self-sufficiency, acknowledge the budget request could be a big ask from legislators who expected the facility would be sending people into space by now. And it comes after the state has made painful budgets cuts across government and nearly emptied reserves….

Hicks said additional money from the state’s general fund would help the spaceport catch up on two years’ worth of maintenance that was delayed amid budget cuts. And he said the extra money would allow Spaceport America to hire staff to draw more business.

The agency would still cover most of its own budget with revenue from aerospace companies, according to spaceport staff.

Virgin Galactic’s annual rent soon will increase to about $3 million from $1 million.

Although the spaceport was completed years ago, delays by Virgin Galactic in beginning suborbital space tourism flight have caused financial challenges for the authority. Commercial flights with SpaceShipTwo could begin next year.

  • aa jondo

    We keep hearing year after year that we poor New Mexicans have just not given enough to the Home of Rich Flights to the Moon! And why, if $pacepork is about to cover ts own costs through incoming revenues, why won’t they show us how much those annual revenues are and compare them to the costs we foot? Even if the rent for VG goes up, How long will that take to get us our hard earned taxes back and at a break even? Instead of 200 years, we now are only looking at 100 years?! And what kind of plan do they have to start paying the taxpayers back some interest on our investment… and a bunch of us warned of this, and a bunch of us complained about the use of excess funds from GRT and $pacepork found a hole in the law via a screw up by our local leaders!!!???

  • Hemingway

    The Spaceport is only really designed for one tenant: Virgin Galactic with its carnival ride to space.

  • savuporo

    Isn’t the Romanian dream team moving in as well ? They are ready to go to orbit, as soon as someone will sell them some propellant ..

  • Hemingway

    Unfortunately I don’t think this is going to happen. ARCA was heavily criticized by the Romanian Space Agency by its Director, Marius Ioan Piso. Piso called ARCA as “amateur Advertisers ‘and that”s kind of what they do bungee jumping there for 40 kilometers”.

    ARCA Space Corporation is great at advertising potential products. However, this is the only successful witnessed rocket launch – Demonstrator 2B rocket launch for the Ansari X Prize, in 2004. I can’t find any record of subsequent launches.

  • Hemingway

    From 2004 to the present, ARCA MEDIA has produced the following videos related to its Haas 2C rocket. There is hardly any substance to the videos. You do not see any product in production or demonstrated – just poor prototypes. Some of the videos are laughable.

    Stabilo and Helen, engine test, Video 1, 2009

    Helen rocket loaded onboard Navy ship

    2010 ARCA Team Interview | Google Lunar XPRIZE

    New ARCA facility for Haas 2C and Excelsior rocket plane, under construction, 2011

    A new milling machine was purchased by ARCA, 2011

    IAR-111 Excelsior rocket-plane capsule molds casting, 2011

    IAR-111 Excelsior cockpit airframe completion, 2011

    Excelsior rocket plane cockpit, drop test, Mission 6, Video 2, 2011

    Excelsior rocket plane, cockpit airframe, 2011

    Stabilo capsule launch, Mission 1, 2006

    Haas 2C orbital rocket, first public display, 2012

  • ThomasLMatula

    Yes, instead of the focused R&D facility that was envisioned, one that could create new jobs and industry for the state by leveraging its strengths, the leaders bought into the con of space tourism hook, line and sinker.

    How sad for what started out as a very good idea, leveraging the experience and workforce of WSMR, NMSU PSL, Kirkland AFB and Sandia to turn NM into a research hub for space development… I guess what the Southwest Regional Spaceport Task Force promised, hard work and a slow climb up the industry building process was not as attractive as the get rich quick visions of the X-Prize Cup, VG and similar New Space firms.

  • Andrew Tubbiolo

    Sorry, all economic models are schemes to take wealth from the many and channel it to the few. Some are better than others. Some even create real wealth that sometimes even finds it way to the masses.

  • aa jondo

    Next month the $pacepork people will have another venue to push off their dribble when they are part of International Symposium on Personal and Commercial Space… I think I got that right… I talked with a yong lady today at an economic development forum about the $pacepork… she woeks for a mechanical company which works at the $pacepork doing all the repairs of contractor fu’s…she was so proud about how they are finally getting the $apcepork finished and ready for all those companies which will be coming… I smile, told her of my backgrouns and how I follow all the space news I can, and that I am the $pacepork’s biggest critic… Oh, she assured me it is coming with her sweet sycophant smile, and I said, “We don’t have a hundred years to wait!”

  • aa jondo

    Oh say Hemmingway… I got a little bit of a report on them from one of my friends with the High Tech Consortium today… he is like us in criticism of $pacepork and was one of those who joined with me to pressure on Santa Fe to get rid of Anderson… ARCA is one of those small companies we need to be fostering, for it does not rely on $pacepork…they have had a test done at WSTF and will do a test, as you noted, at $pacepork, which claimed would be in August instead of October as planned…then ARCA goes to Wallops for a real launch… they are moving slowly, and who knows if we gave too much money or not, but it’s those small R&D’s we need to foster, and not, as said, look for the big splash…never has worked here in NM…

  • savuporo

    I said “dream team” for a reason 😉

  • Ron Fenn

    At the latest Spaceport America Board meeting in Las Cruces on Thurs. Aug 31, there were exactly 2 members of the public (I counted the other person) to sit through nearly 3.5 hours of grueling self-admiration and praise.
    But exactly how does the NM facility fit in the picture of the reported 3.3 Billion dollar space industry? I like to compare it with the relationship between the shoe shiners and the footwear industry. I have had my shoes shined in glorious surroundings at the Waldorf Astoria preceding a business meeting at NYU and I most recently had one sitting on a box in a dusty street in Palomas, MX, I must say that the latter was all as good as the fancy former albeit a bit less expensive. What did the shine (launch) have to do with the quality or make of the shoe and how did it relate to the business conducted following the shine? Nothing! Rocket launches can (as we’ve recently seen in GA) be done from nearly anywhere. The quality of the spot from which it takes place is unrelated to the quality and make of the launched craft or the shoe. Realize this, and it won’t be so important to tax the residents forever, of only 2 of 33 counties in the economically strapped State of New Mexico.

  • Hemingway

    Here is the Facebook Page of the Sierra County New Mexico Free Press fighting the Spacepork!

  • Kenneth_Brown

    I find the argument about being competitive with the other spaceports as being rather specious. SA needs to leverage that since they are in the middle of nowhere + 5 miles, they can host projects that are more secretive or need the increased buffer room. I’ve come under the microscope for taking photos of tests being done by a large company but they didn’t have a leg to stand on since I was on public property when I made the images and I had a clear view of the test stand with only a moderate telephoto lens. Blue Origin’s tests could be visible from neighboring properties, but since they are so far away from anything and don’t typically announce their tests, it’s difficult for outsiders to monitor their tests. SA would have much of the same privacy if the company’s involved don’t make their testing schedules known outside of the people that need to know.

    Open ended taxation that is sold to the public to be for a specific project should not be allowed. We are battling this in California with fuel taxes that are expected to be used for roads winding up in the general fund and used for controversial social programs. The legislature just got another fuel tax passed that was supposed to have a road’s requirement, but even that would expire after a few years with the tax income shifting to the General Fund once again. Why did NM even have to build the spaceport? If they truly had the best location, VG would have been able to raise the money to build it otherwise, NM was just recklessly spending money to attract a startup company attempting a novel and untested business plan using newly developed technology. Any real investor knows that those ventures are huge risks, not something that a public agency should be using tax money on.

  • ThomasLMatula

    That was one of the factors in the original selection, especially as the USAF was very interested in using it for contractor testing under its original business model. And one of the launches that has taken place at SA was by Lockheed under a USAF contract for RLV research. One of the functions of the NM Space Institute I proposed in the original business model was too attract exactly those types of R&D launches.

  • ThomasLMatula

    Yes, they really need to look at the original marketing white paper for it and start implementing it. The sad thing is they put all their eggs in the space tourism market, the one that was the least attractive and least likely to be viable.