NM has too much invested to give up on Spaceport
Spaceport America was promoted by Gov. Bill Richardson and launched with much fanfare a decade ago. The $218.5 million futuristic site was developed with $142.1 million in state funds and $76.4 million from a sales tax increase approved by voters in two southern New Mexico counties. Since then, there has been progress — and setbacks. Anchor tenant Virgin Galactic has yet to take any paying customers for a ride into near space. In 2014, its test vehicle, SpaceShipTwo, exploded over the Mohave Desert, killing one of its two pilots.
And SpaceX, which signed a three-year lease in 2013, has failed to repeat its single successful landing, elsewhere, of its planned reusable booster rocket.
Virgin Galactic’s new rocket ship is expected to be unveiled this month, ready for testing. However, Spaceport Chief Executive Officer Christine Anderson says Virgin Galactic isn’t projected to fly at the Spaceport until after July 2017.
The SpaceShipTwo explosion was a wake-up call for the state and Spaceport authorities who had placed nearly all of their bets on Virgin Galactic. Spaceport officials have scrambled to come up a more aggressive business plan and stepped up marketing. But beyond some tourist events and commercial film shoots, only a few new tenants have been nailed down.
A recent bright spot is the $300,000 deal with Google for testing solar powered drones.
Although Virgin Galactic started paying $1 million in annual rent and $600,000 in user fees in 2013, revenue from flights can’t materialize until the company starts flying from New Mexico. Its lease increases to $3 million in Fiscal Year 2018, so that will help.
Spaceport officials were projecting a $2.8 million shortfall between the $4 million in expected revenues next fiscal year and the $6.8 million needed to run the place. They wanted the state to cover the shortfall. But in light of depressed oil revenues, they have scaled the budget back and are asking for an increase of about $2.2 million in state funding to help get through what Anderson calls a “bridge year.”
The governor had requested $2.35 million in non-recurring funds and the Legislative Finance Committee had recommended $612,500 in general fund transfers. But that was last month, when the state thought it might have $232 million in new money. Now, with only about $30 million expected to work with, the House Appropriations and Finance Committee this week approved $1 million in a special appropriation in addition to $462,500 in operating money for the Spaceport in its version of the state budget. The House budget bill goes to the floor today.
The reality is that anticipated revenues haven’t materialized because the fledgling commercial space industry hasn’t taken off as quickly as hoped. Anderson projects the spaceport will be self-sustaining within a year of regular Virgin Galactic flight activity.
While the state waits for that to happen, taxpayers are left propping up the Spaceport, which has security, maintenance and administrative needs whether it’s used by enough clients or not. That’s a hard expense to swallow, considering the many other worthy competitors for state funding.
Yet, having come this far and investing this much, New Mexico can’t afford to simply abandon Spaceport America. Some amount of new funding or still more budget cuts will be needed as the state tries to find new customers and hopes for greater success by the companies trying to privatize space travel.