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Air Force Lab pegs impact at $659 million

ALBUQUERQUE, N.M. — The Air Force Research Laboratory located on Kirtland Air Force Base reported a $659 million economic impact on the state in fiscal year 2016.

That’s more than $120 million more than in fiscal year 2013, the last data the AFRL reported on in 2014.

The report took into account salaries, direct spending, taxes and other indirect factors.

Matt Fetrow, director of the Kirtland AFRL’s Technology Engagement Office, presented the report’s findings to a group of stakeholders at Innovate ABQ in Downtown Albuquerque on Thursday.

The AFRL is a research organization under the U.S. Air Force Materiel Command that has directorates around the country.

Kirtland is home to the Directed Energy and Space Vehicles Directorates. New Mexico is also home to a Directed Energy Directorate testing site at White Sands Missile Range and a Space Vehicles Directorate high altitude balloon program at Holloman Air Force Base.

Fetrow said additional federal funding was a considerable contributor to the increased impact.

Fetrow touted the large proportion — 49 percent — of  research and development contracts that went to New Mexico contractors. Fetrow said that number has historically been around 20 percent.

Of the $322 million AFRL spent on those contracts, $159 million went to in-state contractors in FY16. He credited increased outreach efforts and elevated capacities at New Mexico businesses.

The report also analyzed contractors’ use of available New Mexico tax incentives, including a gross receipts tax deduction implemented in 2015 meant for goods and services related to directed energy and satellites sold to the U.S. Department of Defense, enacted by the state Legislature in 2014.

“We did not find a lot of evidence… that those tax incentives are being widely used,” Fetrow said.

According to the report, “fewer than three” taxpayers took advantage of the deduction. Fetrow said that could be due to a variety of factors, like companies not being aware of the deduction or the deduction process lagging behind.

“We’d like to look into this more,” he said.

The report noted that AFRL was responsible for more than 4,100 jobs in FY16, compared to 3,714 in FY13.

Fetrow said they hope to begin issuing an annual economic report in the future.

The report was prepared in conjunction with the University of New Mexico Institute for Policy, Evaluation and Research.