Taos broadband construction reflected in economic numbers


Data from the state shows the total Taos economy grew for the first time in more than a year during the third quarter of 2012 — an increase that appears to be partially attributable to Kit Carson Electric Cooperative’s ongoing broadband installation project.

The co-op is in the midst of a $64-million initiative to install fiber optic cable to every home and business it serves, and construction began in earnest last summer. The project is part of the federal stimulus bill and the co-op has long lauded the immediate local benefits the project will have on the Taos economy. Signs of those benefits are now beginning to appear in hard numbers.

The Taos Economic Report analyzes publicly available gross receipts numbers reported to the state every quarter. Businesses in Taos County are required to report gross receipts for tax purposes, indirectly providing a glimpse of activity in every sector of the economy.

The state publicly reports the gross receipts amounts anonymously, meaning they cannot be tracked back to a specific business. However, big jumps in industries related to the broadband project strongly suggest it is having a noticeable effect on the local economy.

Co-op CEO Luís Reyes told The Taos News that construction of the broadband system is being reported to the state in the “utilities” category. The economic report for the third quarter of 2012 shows that the utilities industry grew by nearly $3 million compared to the same quarter in 2011. Total dollar volume reported by electric contractors — hired to do installation work — more than tripled between the same two quarters, jumping from $730,000 to $2.3 million.

All told, the economic report shows the total reported gross receipts for the third quarter of 2012 were the highest they had been for that quarter since 2008.

To download a copy of the most recent Taos Economic Report, find this story at www.taosnews.com.

While the most notable increases are in the above fields, peripheral industries like accommodations, retailers and restaurants will likely see a slight uptick because of the influx of out-of-town workers, as well as contractors who are leasing office space and renting vehicles. Reyes estimates that these increases so far amount to about $2.5 million, but it is nearly impossible to verify that figure by reviewing gross receipts numbers because the windfall is spread out over several industry categories.

Reyes said there were about 200 people working on the project at peak times of activity. Ten local contractors have been hired, accounting for about 80 percent of the workforce, Reyes said adding that $18.5 million of the total project budget has been spent so far. Of that amount, $7.7 million has gone to payroll expenses, with $6 million of that for local workers, Reyes said.

Construction on the project is expected to be completed by mid-2014. A government website that tracks the progress of stimulus projects shows that an estimated 212 people were employed as part of the broadband project in the third quarter of 2012. The site shows that the co-op had received more than $6 million for the project at the end of September.

While the project is having a noticeable impact in some sectors, it is adding a relatively small amount to Taos’ overall economy. Annual gross receipts for Taos County added up to $817 million in 2011. Even if the entire $64 million budget for the project were spent in Taos County in a single year, it would be a one-time increase of 8 percent.

Still, Kit Carson’s broadband is a welcome boost at a time when construction is still in limbo, tourism is sputtering and the real estate industry appears to only now be showing real signs of recovery. The broadband project follows major, publicly funded Taos County and Taos schools construction projects. The authors of the economic report noted those projects went a long way in buoying the construction industry, but they left a big hole when the jobs were completed.


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