Los Alamos National Laboratory struck information from a commissioned study that would have shown that the Lab’s fiscal impact on surrounding counties–especially on Rio Arriba–has been negative.
An initial draft of a 2019 University of New Mexico Bureau of Business and Economic Research study, commissioned by the Lab to show the Lab’s economic impact on Northern New Mexico, contained data demonstrating that in Fiscal Year 2017, the presence of the Lab in the region had a negative fiscal impact on Santa Fe, Taos and Rio Arriba Counties.
A slideshow version of the original draft, presented at a February meeting of the Regional Coalition of Los Alamos National Laboratory Communities, contains a table stating that the Lab’s presence cost Santa Fe County $1,414,655, Taos County $809,406 and Rio Arriba $3,215,566.
It also states that the Lab’s fiscal impact on Los Alamos County has been positive–Los Alamos County received $11,642,589 because of the Lab in Fiscal Year 2017.
But the Lab asked the Bureau to remove the data from study, and the final version does not contain it.
The final version does contain a table stating that state government received a substantial net benefit from the Lab, at $11,734,491, while the governments of the seven counties surrounding the lab together received a net benefit of $6,038,085–but there is no county-by-county breakdown.
The fiscal impact for individual counties was calculated by comparing the amount of revenue the local governments receive because of the Lab to the costs of services those governments provide for Lab employees and affiliates residing in their counties.
A laboratory spokesperson wrote in a Tuesday email that Lab representatives did not want to include the data because the focus of the study was on state, rather than county, impact.
“The focus of the study 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,” they wrote.
The study, however, does include county specific data–the report states how much revenue each of the seven surrounding counties receives from the Lab.
In a Feb. 13 email between Bureau Director Jeffrey Mitchell and Regional Coalition Executive Director Eric Vasquez, Mitchell offered a different explanation as to why the Lab wanted the data out.
The county-by-county breakdown “shows there are some winners and some losers,” he wrote. “I suspect that LANL was less interested in presenting that.”
Lab representatives asked the Bureau to remove the data because they said they were not confident in the county-by-county estimations of costs of services, Mitchell wrote.
But they said that they were confident in the revenue numbers, and in the aggregate version of the counties’ costs of services, he wrote.
It is not clear why they would be comfortable with the aggregate version of counties’ expenditures but not with the county-by-county breakdown, as the aggregate version is the sum of the individual counties’ estimations.
And Mitchell wrote that the estimation of the costs of services is actually one of the most straightforward calculations in the report.
Both Los Alamos County Commissioner David Izraelevitz and Los Alamos County Manager Harry Burgess defended the Lab’s decision to exclude the information.
Izraelevitz wrote in a Feb. 14 email that the people who receive the most services from Rio Arriba are from “a disadvantaged socio-economic segment which is not the LANL employee profile,” so, he argued, it is not possible to calculate county expenditures on a per capita basis, as would be needed for the fiscal impact calculation.
Burgess wondered in a Feb. 14 email why BBER would present the fiscal impact data to begin with, given the Lab’s decision to remove it from the study.
“I find it problematic that a consultant, in this case BBER, would present information that their client told them not to, specifically since they considered such information suspect,” he wrote.
The final version of the study does state–though without displaying any data to back up the statement–that the fiscal impact on Northern New Mexico’s county governments is “mixed.”
“In general, jurisdictions with businesses that serve LANL and its employees do well as these generate substantial GRT (Gross Receipts Tax) revenues while incurring relatively few costs,” the report states. “By contrast, jurisdictions that are primarily bedroom communities for LANL employees depend on smaller property tax revenues while funding costly services to working households.”
The report states that the contrast is characteristic of New Mexico government finances and not an impact specific to the Lab.
Rio Arriba County Economic Development Director Christopher Madrid also said that the negative economic impact of the Lab on Rio Arriba is the result of the County’s status as a bedroom community.
The County pays for County residents’ services, including emergency and fire response and road and building maintenance, but Los Alamos receives the Gross Receipts Tax for the labor of Rio Arriba residents who work at the Lab, and for the money those employees spend in Los Alamos.
So the County is not getting reimbursed as much as it would if all residents who lived in Rio Arriba also worked and shopped in Rio Arriba.
“Under this structure, we’re the net loser,” Madrid said. “How can we address that inequity?”
He said it is important that the public have access to the data that demonstrates the Lab’s negative fiscal impact on local governments, so that policymakers can examine the inequities that arise out of local tax structures.
“There’s no blaming,” he said. “We want facts so policymakers are aware, so they can try to find an equitable opportunity to balance things out.”