Santa Fe: Economy
Major Industries and Commercial Activity
Santa Fe's economy has been based largely on tourism and state government. As capitol of New Mexico, the government is the largest employer in the area. Santa Fe receives an average of 1.6 million visitors annually; in 2004, readers of Condé Nast Traveler magazine ranked Santa Fe second only to San Francisco as the best travel destination in the country. Tourism boosts the city's retail industry, which brings in more than $1 billion annually.
Because of the city's proximity to Los Alamos National Laboratory (LANL), 45 miles away, scientific research has also become a factor. Operated by the University of California for the U.S. Department of Energy, LANL is one of the largest research laboratories in the nation. It is an important center for work on defense-related projects, conducting research on technology associated with nuclear weapons and deterrence, as well as energy production and health, safety, and environmental concerns, among other areas. Over one third of LANL's employees live in Santa Fe, and several new research-related firms and high-technology spinoff companies have located in Santa Fe.
Health care and light manufacturing are other significant economic sectors. Santa Fe has emerged as a regional medical center; St. Vincent Regional Medical Center is one of the city's largest employers and serves seven counties. Products manufactured by local companies include electronic instruments and textiles.
Items and goods produced: art, pumice products, weavings, Native American arts and crafts, textiles, electronic instruments, aluminum ware
Incentive Programs—New and Existing Companies
The Santa Fe Business Incubator, considered one of the best of its kind in the nation, assists new businesses with all aspects of start-up. The Small Business Development Center provides one-on-one business advising, encourages and instructs entrepreneurs, and is a strong advocate for local business growth and development.
SCORE (Service Corps of Retired Executives) provides business counseling and support. Santa Fe Economic Development, Inc. supports entrepreneurs and works with businesses interested in relocating to the area.
New Mexico offers a variety of incentives to all new and expanding businesses. Its Build to Suit program facilitates building construction, and ePort New Mexico is a "one-stop" information source offering permitting and licensing. The state's financial incentives include: no inventory taxes; tax credits for high-wage jobs, technology jobs, and childcare; a tax deduction for research and development services; a job training incentive program (the cornerstone of the state's incentives: New Mexico can pay half the salary for new hires for up to half a year); exemptions for qualified businesses from property taxes on land, buildings, and equipment, and from personal property tax on equipment; and laboratory partnerships with small businesses. Further incentives are available for manufacturers, customer support centers, aerospace and aircraft industries, producers of agriculture or energy, and filmmakers. In addition, the state enacted a major personal income tax reduction in 2003, and New Mexico's property taxes are second lowest in the nation.
To attract businesses that rely on high-speed technology, Santa Fe is constructing a "Santa Fe Light Trail" system of digital microwave and fiber facilities; it will be a hybrid network available to the business community as well as educational facilities and local and state government agencies. A new civic center for the city is scheduled for completion in 2007.
Santa Fe is linked with major western and midwestern markets via rail freight service provided by the Santa Fe Southern Railroad, which maintains a main line through nearby Lamy. Several rail sidings are conveniently located in the city's industrial areas. Several interstate motor freight carriers connect Santa Fe with markets on both the East and West Coasts; major parcel express lines also serve the city. Air cargo service is available at Santa Fe Municipal Airport.
Labor Force and Employment Outlook
Santa Fe's economy is lead by government and tourism, and as of 2005, two out of three jobs in the city are in either the government or service sector. Corporations of substantial size are absent from the economy, and recruitment efforts encourage entrepreneurship and small business development. Unemployment is relatively low. Wages, especially in the service industry, have remained low (nearly 20 percent less than the national average) while the cost of living index is high (up to 20 percent higher than the national average). A "living wage" ordinance, passed in 2003, attempts to raise minimum wages to remedy this problem.
The following is a summary of data regarding the Santa Fe metropolitan area labor force, 2004 annual averages.
Size of non-agricultural labor force: 60,600
Number of workers employed in . . .
construction and mining: 4,500
trade, transportation and utilities: 10,200
financial activities: 2,900
professional and business services: 5,100
educational and health services: 8,300
leisure and hospitality: 8,900
other services: 3,000
Average hourly earnings of production workers employed in manufacturing: $14.64
Unemployment rate: 4.2% (January 2005)
Cost of Living
The following is a summary of data regarding key cost of living factors for the Santa Fe area.
2004 (3rd Quarter) ACCRA Average House Price: $315,950
2004 (3rd Quarter) ACCRA Cost of Living Index: 109.0 (U.S. average = 100.0)
State income tax rate: Ranges from 1.7% to 6.8%
State sales tax rate: 5.0%
Local income tax rate: None
Local sales tax rate: 1.0625% (city); 1.25% (county)
Property tax rate: 0.017494 multiplied by one-third of full market value (2004)
Economic Information: Santa Fe County Chamber of Commerce, PO Box 1928, Santa Fe, NM 87504; telephone (505)988-3279; email email@example.com. New Mexico Department of Labor, Economic Research and Analysis, 401 Broadway NE, Albuquerque NM 87102. Bureau of Business and Economic Research, 1 University of New Mexico, Albuquerque, NM 87131; telephone (505)277-2216; fax (505)277-7066
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