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Surprising numbers in UNM report on lab’s impact

A recent UNM study calculates the local government cost of providing basic services to employees of Los Alamos National Laboratory, such as these working in the lab’s plutonium facility, versus local tax revenue paid by lab workers and on LANL procurements. (Courtesy of the National Nuclear Security Administration/LANL)

A recent study by the University of New Mexico’s respected economic studies office details the huge economic impact of Los Alamos National Laboratory on New Mexico.

The report by UNM’s Bureau of Business and Economic Research (BBER) says LANL supports employment of more than 24,000 workers in New Mexico and creates a total output of more than $3.1 billion.

In addition to the jobs, half of the lab’s annual $752.5 million in purchases of goods and services are made in-state, most of it from entities based in Los Alamos and Bernalillo counties, although Santa Fe County gets a good chunk – an average of $63 million for fiscal years 2016-18, BBER says. LANL’s procurements in Rio Arriba County averaged about $9 million annually over the three-year period.

But for all the dollars LANL spreads around, there’s one negative financial impact. Surprisingly, BBER found that it costs almost all of the counties in the seven-county region around the lab more to provide such basic services as roads, parks and policing to LANL employees, based on their percentage of county populations, than the counties take in as revenue from taxes paid by the workers and on lab procurements. Only Los Alamos County nets positive financial numbers in this regard.

As the Rio Grande Sun has reported, LANL scrubbed these findings from the final version of the BBER study, which the lab itself commissioned. But the local governments’ deficits were revealed when a draft version of the study was presented to the board of the Regional Coalition of LANL Communities earlier this year.

The issue also was discussed at a coalition board meeting last month. The study found that Los Alamos County has a net gain of $13 million from tax revenues created by the lab, while local governments in the other six counties lose an average of $1.25 million. Santa Fe County’s deficit is $2.2 million and Rio Arriba’s is even bigger at $2.6 million. Also netting losses were Sandoval, San Miguel, Taos and Mora counties.

Part of the problem is New Mexico’s tax structure. The personal income taxes paid on those attractive lab salaries go to state government, not cities or counties. The local governments get most of their locally generated revenue from gross receipts and property taxes.

Also, BBER says, higher-income households, such as those of LANL workers, generally spend smaller shares of their incomes locally. Rural counties “leak” the gross receipts taxes generated by personal purchases of goods and services – meaning these counties’ lab employee residents go elsewhere to spend their money. The fact that Bernalillo County, outside the seven-county LANL region, siphons off a lot of the lab’s procurement dollars is another factor.

A lab spokesman told the Sun that LANL didn’t want this local government financial information included in the final BBER report because the study’s focus “was to assess impact on the State as a whole and not County-specific impacts, as County-wide data may not present a complete picture of the Lab’s impact on a particular community.”

But BBER’s director Jeffrey Mitchell said in an email to a Regional Coalition official that the county financial figures show “there are some winners and some losers. I suspect that LANL was less interested in presenting that.”

Look, there’s no denying LANL’s vast economic impact on New Mexico, and on northern New Mexico in particular. The region benefits not just from local tax dollars, but also state tax revenue generated by the lab. But just how much the lab does or could do for the surrounding counties has long been an issue.

Before the U.S. Department of Energy chose a new contractor to run the lab in 2018, representatives of the bidders showed up to effusively promise there would be much more outreach to local communities and new economic development efforts.

People in northern New Mexico want to know how much the lab brings to the region and what LANL’s huge presence can do to improve things beyond the boundaries of Los Alamos County in one of the country’s poorest states. The lab’s impact on the local governments around it is part of the overall picture.

Lab officials touted the BBER’s finding of a $3.1 billion benefit to New Mexico long before the study was released. They shouldn’t have tried to hide the one part of the study that dims in a small way the economic glow shining down among us from Los Alamos.



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