The Economic Importance of the Arts and Cultural Industries in Santa Fe County

Jeffrey Mitchell and Lee A. Reynis

  • In 2002, Santa Fe's arts and cultural industries (A&CI) and cultural tourism generated over $1 billion in receipts, employed 12,567 workers (17.5 percent of total employment in Santa Fe county), and paid $231.5 million in wages and salaries. Just over one half of employment and wages are generated by industries that are either directly engaged in the creation, presentation, or preservation of art and/or cultural activities, or indirectly engaged with cultural content but not themselves “source activities.” The balance is generated by the tourism industry to the extent that tourism is associated with an interest in Santa Fe's art, cultural, and historical attractions.
  • Santa Fe's cultural activities are funded principally with revenues that originate outside the county. Of the total revenues generated by the industries in 2002, 78 percent, or $814 million, were drawn from areas outside of Santa Fe County. Including the indirect and induced effects of these revenues, and subtracting leakages from local economy, the total impact of A&CIs on the economy of Santa Fe County that are associated with outside funds was $773.3 million, creating 12,953 jobs and paying $310.3 million in disposable income.
  • The funds that the A&CIs draw to Santa Fe represent a substantial contribution to the local economy. By definition, local spending does not create new jobs or incomes—local spending serves only to redistribute existing dollars. By contrast, the funds that the A&CIs inject into the economy create new jobs and new sources of income on a net basis. In this regard, the contribution of the A&CIs to Santa Fe County is very substantial. By estimates [from the Bureau of Business and Economic Research], the $814 million that the A&CIs and cultural tourism bring into Santa Fe may account for as much as 39 percent of the total inflow of money into the local economy from a variety of sources, including exports of goods, tourism, consulting contracts, and dividend and interest income.
  • Santa Fe's A&CIs and related cultural tourism contribute substantially to public finances in New Mexico. Activities related to Santa Fe's A&CIs produce an estimated $22.6 million in taxes and other revenues to the City of Santa Fe—about five dollars for every dollar that the city spends on the arts and culture. Similarly, activities associated with the county's A&CIs generate about $36 million in revenues on an annual basis—some 40 percent more than state budgets in support of the arts and cultural activities in Santa Fe.

Comparative Analysis of Santa Fe's Arts and Cultural Industries

  • The contribution of the A&CIs to Santa Fe's economy exceeds the contributions of the A&CIs to other communities in the United States. Widely recognized studies by Americans for the Arts and by Professor Richard Florida, author of The Rise of the Creative Class, rank Santa Fe first among cities of similar size in terms of the contributions of the A&CIs to the economy. Representation of artists and cultural workers in Santa Fe's labor force is unparalleled—the city boasts the largest proportion of artists, performers, and writers as share of total employment of any U.S. city, and is among the top ten in terms of museum curators, architects, and graphic designers. According to the Economic Census, in terms of dollar sales Santa Fe is among the largest art markets in the United States.
  • Santa Fe's A&CIs rank among the top contributors to economic development in New Mexico. Preliminary estimates based on secondary sources and previous work by BBER suggest that the volume of dollars Santa Fe's A&CIs bring into the county is one hundred times greater than what New Mexico's film industry brings to the state; is comparable to all aspects of the University of New Mexico's contributions to the state; is roughly equal to the total contribution of Intel (which has benefited from generous tax breaks); and is equivalent to about 70 percent of the volume of funds brought into the state by the Los Alamos National Laboratory.
Excerpt from The Economic Importance of the Arts and Cultural Industries in Santa Fe County,
by Dr. Jeffery Mitchell and Dr. Lee A. Reynis, published by the University of New Mexico Bureau of Business and Economic Research, November 2004.