Independent Economic Contribution Analysis

Independent analysis of Los Alamos National Laboratory’s economic contribution on New Mexico’s economy in Fiscal Year 2022

This independent analysis from two New Mexico academics (Dr. Robert Grassberger, Assistant Professor Emeritus of Organization, Information and Learning Sciences at UNM, and Dr. Jay M. Lillywhite, Assistant Dean for Economic and Rural Development, College of Agricultural, Consumer, and Environmental Sciences at NMSU) used data provided by the Laboratory for Fiscal Year 2022 to estimate the Laboratory's economic and fiscal contributions to the region. Read the news release here.

The analysis explores direct, indirect and induced contributions to the economy from the Laboratory’s expenditures for FY22 and makes preliminary calculations for the Laboratory’s FY23 contributions. It also provides profiles of New Mexico small businesses that have benefited from the Laboratory’s policies to support underrepresented or disadvantaged businesses.

This analysis differs from the report issued annually by the Laboratory on its economic impact: the Laboratory report only outlines dollar amounts spent directly by the Laboratory and the number of employees hired by the Laboratory, while this independent analysis calculates the indirect and induced contributions from that expenditure and hiring, presenting a more comprehensive and much more detailed view of the overall contribution of the Laboratory to the state’s economy.

Key findings

Laboratory economic contribution FY22

The Laboratory’s total economic contribution to the state in FY22, including direct, indirect, and induced effects, as measured by economic output derived from the Laboratory’s in-state expenditures of $2.61 billion, was $3.77 billion.
The direct labor of 14,433 employees (including Laboratory employees and those associated with construction purchases) supported more than 18,000 jobs in the region and 21,000 jobs statewide, and generated an estimated $1.7 billion in employment income in the region and $1.90 billion statewide.

The report also outlines the top 15 supported industries based on economic output and jobs created from the Laboratory’s economic contribution, including construction, healthcare and retail.

FY22 tax contributions

The Laboratory also contributes to state and local government tax revenues that are used to fund public services such as safety, health and human services, judiciary, education, and other public services.

Northern New Mexico fiscal impacts:

The Laboratory supported combined tax revenues of $109.5 million to county and municipal governments in the seven-county region around the Laboratory (Los Alamos, Mora, Rio Arriba, Sandoval, San Miguel, Santa Fe and Taos), based on Laboratory payroll and procurement data and the indirect and induced impacts of household and business expenditures and tax payment rates derived from secondary sources
GRT payments to local governments in the seven-county region totaled $54.3 million.
Residential property taxes were estimated at $28.8 million, and non-residential property taxes were $26.4 million.

Statewide fiscal impacts:

The Laboratory supported combined tax revenues of $304.9 million to New Mexico’s General Fund as well and local governments. This included $53.4 million in personal income tax payments made by Laboratory employees and others employed because of Laboratory spending.
$191.4 million in GRT was generated at the State and local government level. (The Laboratory paid $134.2 million in GRT in FY22. The rest was paid by households on goods and service purchases.)

Preliminary FY23 estimates

The report mainly focuses on FY22 information, but using the multipliers generated for FY22 it also includes a preliminary measurement of the Laboratory’s FY23 economic and employment contribution:

Total expenditures within New Mexico in FY23 are estimated to equal $2.68 billion, including employee compensation.
The Laboratory’s economic contribution to the state in FY23 can be approximated to equal $3.88 billion, using the output multiplier of 1.45 calculated from the FY22 analysis.
The total employment contribution in FY23 is estimated to equal 23,446, using the employment multiplier calculated for FY22.

Examples of qualitative contribution

While largely quantitative in nature, the report also takes a qualitative approach to explore the Laboratory’s policies and procedures that aim to support small and sometimes marginalized or disadvantaged businesses. The report provides profiles of several New Mexico businesses who have benefited from these approaches including Performance Maintenance Inc. (PMI), Tsay Corporation, and Wildflower International.

The authors conclude, “The laboratory’s efforts in these areas have allowed business owners to expand beyond their relationship with the laboratory, generating additional economic benefits that are not directly measured in this analysis.”

Methodology

Grassberger and Lillywhite used a Multi-Regional Input-Output (MRIO) analysis with a Social Accounting Matrix (SAM) model, as facilitated by the popular economic modeling software IMPLAN.

They chose to conduct a contribution analysis (rather than an impact analysis). The analysts conclude, “As such, the results presented in the report should be considered conservative as compared to those that would have been estimated using an impact analysis.”

Full report

Download the full report.