Economic Dashboard
As with similar local governments, economic data is used by the Mayor, City Council, and Budget staff to guide the financial decisions and budget for the City of Albuquerque (City).
Employment, construction and home sales are major indicators and drivers of economic activity in Albuquerque, and are closely monitored by the City and used in economic models to project City revenue. Additionally, national measures such as interest rates, consumer confidence and legislative changes at the State and federal level also impact the local economy and are closely monitored and used in revenue forecasting.
The following information is intended to provide insight to assist the public in understanding City revenue structure and the economic indicators that impact the most important of these revenues.
Gross Receipts Tax
Dashboard: 2022 Fiscal Year Gross receipts tax (GRT)
View a PDF version of this dashboard.
Gross receipts tax (GRT) is similar to a sales tax, except that it is imposed on the retailer and applied to their gross receipts, or sales; nevertheless, this tax is almost always passed on to the consumer. GRT comprised 66.4% of the City’s General Fund and 35% of the entire operating budget for Fiscal Year 2022.
Every year, the City produces a five-year revenue forecast and then builds an annual budget based on revenue growth expectations for the upcoming fiscal year. On a monthly basis, as the City receives gross receipt tax revenue (GRT), the largest source of revenue for the City, the City economist tracks actual revenue receipts with the growth expectations built into the budget. Monthly tracking and analysis allows the City to make budgetary adjustments if necessary, as with the case of COVID-19 and its negative impacts on City revenues.
The City receives GRT revenue distributions from the State of New Mexico (State) two months after the month of business activity. For example, revenues for July business activity are collected by the New Mexico Taxation and Revenue Department (TRD) in August and then distributed to the City in September. The City monitors GRT growth as measured by the State shared 1.225% revenue increment, which tends to be the least volatile revenue source. New Mexico has a statewide tax rate of 5.0% and shares with each municipality 1.225% of the statewide gross receipts paid by taxpayers doing business within the City.
GRT revenue growth for Fiscal Year 2021 (FY/21), as measured by the State shared revenue, was estimated at approximately -3.4% due to expected negative impacts of the pandemic. However, FY/21 unaudited revenue growth shows final growth for the year at approximately 1.7%, exceeding the City’s conservative expectations. The City’s approach was necessarily conservative given the unprecedented economic and revenue uncertainties, which continue to persist as we enter recovery from the pandemic and its financial impacts.
July 2021 revenue, the first month of Fiscal Year 2022, showed growth of 21.3% over July 2020 and 4.6% over July 2019. This growth reflects pent-up demand as the economy rebounds from the pandemic and the impact of generous federal financial aid during the crisis.
Effective July 1, 2019, New Mexico House Bill 479 repealed several restricted local option tax rates in favor of increasing the unrestricted municipal local option rate from 1.5% to 2.5%, allowing more flexibility in how local governments can use the revenue. Despite the legislation lifting prior use restrictions, for FY/22, the City continues to allocate revenues per historic reporting categories.
City General Fund GRT revenue consists of: 1.225% State shared revenue, 0.25% Public Safety revenue 0.375% Hold Harmless revenue, and 0.5625% other general GRT, and Penalty and Interest earnings. Additionally, the City allocates 0.25% to Transportation Infrastructure and 0.125% to BioPark Capital Infrastructure and therefore not deposited into the General Fund. Finally, TRD charges a 3% administrative fee on local increment revenues. The chart linked below shows that FY/21 revenues only began to exceed that of FY/20 beginning in February, eight months into the fiscal year. July 2021 revenues, the first month of FY/22, exceeded both of July FY/20 and July FY/21.
Employment
The employment outlook for the Albuquerque metropolitan statistical area (MSA)* is developed quarterly by the Bureau of Business and Economic Research (BBER) at the University of New Mexico. BBER uses national forecasts from IHS Global Insights and local information to develop forecasts for the State and local economy. The City then uses this data in its statistical models for estimating revenue. On a monthly basis, the City uses data from the U.S. Bureau of Labor Statistics to monitor individual business sector employment, labor force changes, and the unemployment rate.
*MSA is the formal definition of a region that consists of a city and surrounding communities that are linked by social and economic factors. The Albuquerque MSA comprises the four counties of Bernalillo, Sandoval, Torrance, and Valencia.
- The Albuquerque seasonally-adjusted unemployment rate decreased from 6.9% in July to 5.9% in August. The U.S. rate for July was 5.2%.
- Using seasonally-adjusted data, among the five municipal peers, Albuquerque, El Paso and Tucson have not recouped the jobs lost since August 2019, prior to the pandemic.
- While August growth for most business sectors improved over FY/20, several, including information, leisure and hospitality and local government (representing many tribal businesses) are still below FY/19.
August 2021 Peer City Employment Growth Jobs Change
ABQ August 2021 Jobs Change by Sector
Construction
Construction and construction employment is a major economic driver for the City; therefore, City administration watches these metrics closely and the City Economist uses the information in revenue forecast models. Fortunately, construction continued to grow in FY/20 despite the onset of the pandemic, and in FY/21, finished nearly equal with FY/20 along with projections. Construction employment has continued to grow since 2019.
ABQ Real Construction Values and Jobs 2009 to 2021
Albuquerque and Peer City Gross Domestic Product (GDP)
Similar to national gross domestic product, the U.S. Bureau of Economic Analysis tracks GDP at the local level. GDP is a comprehensive measure of an entity’s overall economy. It estimates the value of the goods and services produced in an area and can be used to compare the size and growth of economies across local governments. The link below contains growth for 2019; GDP for 2020 should be available December 8, 2021.
2019 GDP for ABQ and Peer Cities
Albuquerque – U.S. Economic Indicator Comparisons
It is instructive to compare the Albuquerque MSA with the U.S. in various historical and projected economic indicators, such as single family construction, home prices, and employment in key sectors. The chart linked to below was developed with the October 2020 Five-Year Forecast. It will be updated by the end of October 2021 with the development of the new Five-Year Forecast which will inform the City’s FY/23 budget development process.