A study completed and released in February 2009 by the University
of New Mexico Bureau of Business and Economic Research (BBER) estimated construction
of the BDD Project will inject $287.2
million in net economic benefits to the regional economy through the completion of
construction in 2011. It also will generate and sustain
more than 500 jobs per year during the same period.
The study defined net economic benefits as the total benefits of the project
minus the negative impacts on the economy of taxes and water rate increases
that are providing funding to build the BDD Project.
The study estimated the BDD Project will “create or sustain over 500 jobs
in the local economic region.” Based on commuter patterns and spending,
BBER defines the local economic region to include Santa Fe, Bernalillo, Rio
Arriba and Sandoval counties, which are a “functional economic area,” or
a semi-self sufficient economic unit.
The study estimated construction spending will support an additional $286.6
million in economic activity (including the contractor’s receipts from
the project, spending on goods and services for construction of the project
and spending by contractor employees or those indirectly supported by the
project) for the four-county region while the project is being built. The
total labor income will be $93 million during BDD construction. BDD Project construction
is expected to generate nearly $3 million in gross receipts tax revenues
for Santa Fe County and $9 million for the State of New Mexico, not including
revenues on a PNM construction project to support the BDD.
Spending by employees supported directly and indirectly by the BDD Project
is estimated to generate an additional $1 million in gross receipts taxes
for local governments in the economic region.
In terms of professional services contracts, the study estimated $25.8
million will be spent during BDD Project construction, with most of the money going to pay
for architectural and engineering services provided by local firms. The economic
impact to the region is predicted to be $34.8 million, with the BDD Project generating
an average of 83 professional services jobs and $14.2
million in labor earnings.
Professional services contracts will generate more than $250,000 in gross
receipts tax revenue for communities and counties and another $320,000 for
the state during construction.
The economic impact of the BDD Project is particularly important, according
to the study, because the Santa Fe Metropolitan Statistical Area (MSA), which
consists of Santa Fe County, has been one of two areas in the state “hit
very hard” by the national recession.
According to the New Mexico Department of Workforce Solutions, the seasonally
adjusted unemployment rate in the Santa Fe MSA was 3.6 percent in November
2008, one percent higher than the 2.6 percent rate in November 2007. Also,
year-over-year job growth was a -0.9 percent, representing a total loss of
600 jobs out of 65,700 jobs as of November 2007. The report noted that Santa
Fe has experienced year-over-year job losses since June 2008 – the
first instance of negative growth since April 2001.
BBER Report on Economic Impact of Buckman Direct Diversion (BDD) Construction