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.