The Las Cruces Economy 

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Las Cruces Demographics

Population (2005)
City 82,671
County 189,444
(80% urban, 20% rural)
Estimated median household income (2005)
Las Cruces $29,363
New Mexico $37,492
Estimated median house/condo value (2005)
Las Cruces $121,500
New Mexico $125,500
Median gross rent (2005) $587
Median real estate property taxes (2005)
($27.53 per $1,000 of 33.3% of assessed value)
Housing units with mortgages $735
Housing units with no mortgage $614
Residents living in poverty (2005) 27.50%
For population 25 years and over:
High school or higher 80.30%
Bachelor's degree or higher 28.40%
Graduate or professional degree 12.10%
Unemployment (September 2007)
Las Cruces 3.00%
New Mexico 3.30%

On This Page

Major Industries and Commercial Activity
Items and Goods Produced
Incentive Programs
Job Training Programs
Development Projects
Largest County Employers
Cost of Living

See also Meet Las Cruces and Las Cruces Links.

Major Industries and Commercial Activity

Like many other sunbelt communities, Las Cruces' economy is booming. The city is the fastest-growing metro area in New Mexico and among the top 10 in the United States. The median age is younger than the state or national average, providing a prime, mostly bilingual, labor source. Private and public sectors continue to fuel the economy, whereas the conditions in other parts of the country, such as climate, cost of living, and quality of life, are less attractive to people and companies looking to relocate.

The four mainstays of the local economy are agriculture, commerce, education, and defense/aerospace. Since World War II, federal, state, and local government have become the main source of jobs in the area, due to the proximity of New Mexico State University (NMSU) and White Sands Missile Range. NMSU is the city's largest employer, and it also provides training and education for research facilities at White Sands. White Sands Missile Range is the Army's largest installation, and the largest military installation in the Western Hemisphere covering more than 2.2 million acres, and is used by the Navy, Air Force, and NASA. Other government agencies, universities, private industries, and even foreign militaries conduct research there as well.

Although Las Cruces was never primarily an industrial town, manufacturing and commerce has been growing in importance. The North American Free Trade Agreement, or NAFTA, passed in 1994, has influenced this trend, as has the opening in 1991 of the border crossing at Santa Teresa, just 40 miles south of Las Cruces. Many companies are finding it advantageous to relocate in the Mesilla Valley area in order to do business with maquilladoras (factories) in Mexico. NAFTA and the Mexican government's maquilladora program enacted in the 1960s encourage this type of trade by lowering or completely eliminating tariffs. For example, a U.S. company may send automobile parts to be assembled in Mexico; when the assembled car is shipped back, duties are paid only on the value added in Mexico. Molded plastics and electronic components are the top materials purchased by the maquilladoras.

On the U.S. side of the border, there are nine industrial and research parks in Doņa Ana County. Reports from 2000 indicate the sale price of land in these developed lots ranged from only $.50 to $2.50 per square foot. Some are municipally owned and some private, but most have rail and interstate access and utilities included.

Las Cruces is definitely a land of peppers. Chile, cayenne, jalapeņo, and bell peppers in every color imaginable are all raised locally. The pungent aroma of roasting peppers and the sight of strings of red peppers drying on rooftops enliven the local scene. Stahmann Farms on Highway 28, which originally focused on cotton and tomatoes, is now the world's largest producer of pecans. Other agricultural products include cotton, onions and various other vegetables, and dairy products. Research into developing new plant strains, particularly of peppers, takes place at New Mexico State University.

An enormous influx of retirees, students, and tourists has boosted the economy and has led to a building boom, including many senior citizen residences. A total of 796 new building permits for single-family units were issued in 2003, at an average cost of $144,900.

Items and Goods Produced

Incentive Programs

Local Programs

The city may issue Industrial Revenue Bonds (IRBs) for new businesses and industries, and will work with private bond counsel of the company and the State Investment Council to have the bonds purchased by the State Investment Pool or through a private placement. These IRBs can be used for construction, site costs, equipment, and training. The City Special Projects Office assists in expediting all permit applications. Doņa Ana County also has the Investment Credit Act which encourages employers to locate in the area. The act requires companies to hire new workers and gives tax credits for machinery and other expenses. Las Cruces' 220 acre foreign trade zone exists in three sub-areas adjacent to the Las Cruces airport and West Mesa Industrial Park.

State programs

The City of Las Cruces participates in all New Mexico incentives for new businesses. These programs feature:

The Severance Tax Loan Program and the Community Development Revolving Loan Fund both provide money for establishing and expanding businesses in the area. New Mexico's 27J exemption helps small business ventures raise capital. State of New Mexico Investment Council Venture Capital Investment is a program that gives funds to experienced partnerships that have demonstrated successful investment performance. Still other state-wide programs include Enchantment Land Certified Development Company, which administers low interest, fixed rate, low down payment loans; and the New Mexico Community Development Loan program which is geared toward helping low income people. Funding for the latter, for example, can be used to build housing developments as well as business.

Job Training Programs

On-site and classroom job training is available at NMSU through the New Mexico Industrial Development Training Program. Some features of the program include training customized to individual companies' needs, and freedom of the employers to select training candidates. It is not limited to economically disadvantaged people. Eligible workers are selected by the company from its entire labor pool. This program is directed primarily toward manufacturers although, under some circumstances, it can be used to assist businesses in the services sector. Maximum training is 1,040 hours with the program paying one-half of the training employees' wages (in rural area it pays up to 80% of the wage and training expense).

Development Projects

Housing needs are on the minds of developers and planners in Las Cruces and any fast growing city. Las Cruces issued over 1,200 permits in 2004 for construction of all types of commercial and residential buildings. The Community Development Department has cooperated with 16 agencies to obtain over $1.1 billion for services for low income families, including helping 25 families though its Home Rehabilitation Program. This city department has also helped rewrite zoning codes according to citizen's requests, and has designed the future Mesquite Historic District community garden.

A major accomplishment was to facilitate commercial airline service at Las Cruces International Airport as of November 2004. Before this, the nearest full service airport was 40 miles away in El Paso, Texas. In the mid-2000s, a $3 million construction project dubbed "Community of Hope" is ongoing, renovation of the downtown Rio Grande Theatre (operated by the Doņa Ana Arts Council) was completed, playground equipment was replaced in 25 parks, and there were many other renovations of various city facilities, such as flood drains, street signs, and traffic signals. The importance of water and wastewater management to the region was not overlooked. A two million gallon capacity Telshor water tank was restored and nearly $1 million was spent for various upkeep projects on Las Cruces' more than 390 miles of water lines and 50 wells.

Spaceport America is and will continue to be a major development project for the area. A study conducted by New Mexico State University projects that by Spaceport America’s fifth year of operation, it will employ 2,300 people with a payroll of $300 million. Futron Corporation predicts that by 2020, Spaceport America will employ more than 5,000 people with an excess of $1 billion in total revenues.

Economic Development Information:

Mesilla Valley Economic Development Alliance, 2345 East Nevada, Las Cruces, NM 88001; telephone (575) 525-2852; fax (575) 523-5707

Largest County Employers

New Mexico State University 6,980
White Sands Missile Range 4,357
Las Cruces Public Schools 3,316
NASA 1,500
City of Las Cruces 1,251
Memorial Medical Center 1,198
Walmart 700
Allied Signal Aerospace 667
Excel Agent Services 300

Cost of Living

The following is a summary of data regarding several key cost of living factors for the Las Cruces metropolitan area.

2004 (3rd Quarter) ACCRA Average House Price $275,188
2004 (3rd Quarter) ACCRA Cost of Living Index 99.5 (U.S. average = 100.0)
State income tax rate 1.7% to 8.2%
State sales tax rate* 5.0%
Local income tax rate None
Local sales tax rate 7.0%
Property tax rate $27.53 per $1,000 of 33.3% of assessed value

*Prescription drugs and certain food and medical expenses are exempt.

Economic Information: