The world is in awe that billionaire Sir Richard Branson has finally accomplished his 17-year goal of achieving spaceflight. On July 11th, 2021, Virgin Galactic’s spaceship Unity reached 53.5 miles above the Earth with a crew including Sir Branson himself. They spent a few minutes in zero gravity and returned safely to the runway of Spaceport America near the small town of Truth or Consequences, New Mexico. Congratulations!
The international scene is abuzz with this latest and undeniably impressive addition to Branson’s resume: but at what cost?
Branson launched his flight from Spaceport America, a project initially conceived as early as 1992 when the Southwest Space Task Force was formed to develop and advance New Mexico’s space industry. The project received seed funding through a taxpayer-approved initiative in April 2007 when voters in Doña Ana County approved the spaceport tax.
Almost every year since, supporters of Spaceport America announce the “upcoming launch” from their facility or the need for additional tax dollars to expand the Spaceport and its capabilities. To bolster their claims for extra tax money, Spaceport America commissioned a study by the consulting firm Moss Adams of Albuquerque. The study made headlines with the implausible claim that Spaceport America began producing net benefits for New Mexico as early as 2013.
In March 2020, the Rio Grande Foundation tallied up the total costs to taxpayers, determining that New Mexicans have borne a total project cost of $275 million while revenues approach only $54.3 million for the State over the last 12 years. The vast majority of taxpayer-funded spending was related to capital projects and nearly $10 million in operational expenditures.
That figure does not include the additional expenses on launch day: $1.5 million in advertising was shelled out from the New Mexico Tourism Department “to market and promote New Mexico during that inaugural flight.” The state expects that this investment will be paid off, but given the questionable returns already, I doubt this will ever be realized.
The man is already a billionaire. Why are New Mexico’s politicians beholden to the ingratiating task of lining the pockets of these already wealthy and successful entrepreneurs through taxpayer-funded industry-specific subsidies? The impact of corporate welfare disproportionately affects the economically disadvantaged, especially so in impoverished communities like Doña Ana County and New Mexico as a whole.
In 2019, the state suffered from one of the highest poverty rates in the nation. The impact of the coronavirus pandemic and the corresponding economic lockdown of the past 15 months has undoubtedly exacerbated our financial woes.
In fact, New Mexico trails the southwest in employment recovery. A recent report by Wallethub highlights the state’s 620%+ increase in unemployment claims, referring to the change in the number of initial unemployment insurance claims in the week of July 5, 2021, compared to the week of July 8, 2019. How can a state in this state afford to help send a billionaire to space?
Sir Richard Branson is now an astronaut. But from my perspective as a New Mexican and taxpayer, he sure seems like a wild-west robber baron, holding up taxpayer stagecoaches of the poorest state in the country to fulfill his personal vendetta of beating fellow billionaires Jeff Bezos and Elon Musk in the billionaire space race. He’s “Six-Gun” Branson, 21st-century robber baron, a stark reminder of our 19th-century industrial past.
In the end, his mission was accomplished. But Six-Gun Branson has only proven that he can launch his spacecraft from any airport with sufficient runway length. This also calls into question the disturbing trend of taxpayer-funded subsidies and the validity of corporate welfare as a money-making scheme. I’d hazard a guess that soon he’ll be riding off into the sunset while my fellow New Mexicans are left holding the $275 million bag.
Patrick Brenner is the Vice President of the Rio Grande Foundation, New Mexico’s free-market research institute and think tank. An advocate for open government, he leads the Foundation’s government transparency and accountability efforts.
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