Martinez cheers record impact of film industry
Governor, who once sought to cut rebates for moviemakers, now touts success of state’s incentive program
The movie and television industry generated a record $505 million for New Mexico’s economy in the past year, an increase of nearly $120 million over the previous 12 months, Gov. Susana Martinez said Wednesday.
“From our talented workforce to our unmatched scenery and robust incentives, the choice is clear,” the governor said from a soundstage at Albuquerque Studios. “New Mexico is the perfect place for film and television production.”
Her comments reflect a sharp departure from her early days as governor, when she said the state’s film incentives were draining money from schools and children. Martinez, a Republican, wanted to reduce the tax rebates for moviemakers who shoot in New Mexico from 25 percent to 15 percent, but the Democrat-controlled Legislature fought her and maintained the higher rate.
Martinez said Wednesday she was never against the state’s film incentive program, signed into law by former Republican Gov. Gary Johnson and then expanded to 25 percent by former Democratic Gov. Bill Richardson.
“I always knew how important the film industry has been,” Martinez said. “But at the time we had to balance the budget and ensure our children received a good education. It is not that I did not support the film
industry, but we had to live within the confines of our state budget.”
State Rep. Antonio “Moe” Maestas, D-Albuquerque, said Martinez’s account amounts to revisionist history.
“Her intent was to kill the film industry,” Maestas said, adding that Martinez had campaigned against tax rebates for “Hollywood” and then chilled interest in New Mexico as a site for movies and television shows. His
suspicion, he said, is that the Republican governor regularly spoke against the movie industry because it is heavily unionized and Republicans nationally were trying to drive it from states that allow compulsory fees for workers who elect not to join a union.
And the governor’s remarks do not take into account that the budgets for the film industry and public education come from separate streams of money.
Television producers and filmmakers can only receive tax rebates on qualified expenses for projects shot in New Mexico. For instance, a filmmaker who spends $10 million in New Mexico can qualify for a rebate of $2.5 million. But that money exists only because the moviemaker chose to do business in New Mexico.
Martinez in 2013 vetoed a bill by Maestas to increase rebates for long-running television series shot in New Mexico from 25 percent to 30 percent. His Breaking Bad bill, named after the popular television series that was set in Albuquerque, was soon revived and added to a bill to cut corporate taxes that Martinez favored. That measure was approved by lawmakers in the final minute of the 2013 session and signed by Martinez.
Martinez said in finding ways to expand the incentive program, “We have seen how successful [the film business] can be.”
Martinez said more than 60 film and television productions, including a number of independent films made by native New Mexicans, were shot in the state during the 2016-17 fiscal year.
All told, the governor said, the film industry provided close to 450,000 workdays for New Mexicans, up from some 260,000 workdays the previous year.
Among the film and television series that either just completed production or are currently shooting in the state are the television series Better Call Saul, Graves, The Night Shift and the Coen brothers’ Western anthology, The Ballad of Buster Scruggs.
The state maintains a cap of $50 million a year on film and television industry rebates. For tax credits under $2 million, the money is paid immediately. For rebates of $2 million to $5 million, a production receives 50 percent of the money immediately and the other 50 percent a year later. Those qualifying for more than $5 million in rebates receive the money in three equal installments over about two years.
Advocates and critics of the program have expressed concern that the $50 million cap will discourage filmmakers or lead to a backup in rebates that are due.
Nick Maniatis, head of the New Mexico Film Office, said the state more than likely will hit the $50 million cap this fiscal year. He said production companies will continue to get their rebates, though anything that goes above that cap this year will be paid out after July 1, 2018.
He said the film office estimate on how much the film industry financially helps the state is based on an analysis of a year’s worth of industry expenditures. Qualifying productions receive rebates on such items as salaries for New Mexico workers, car rentals, hotel rooms, and location and studio rentals, provided they are New Mexico-based companies.
The rebates are meant to put new money in the state economy and to encourage filmmakers to use New Mexican talent, including production members working behind the scenes. For example, The Brave, a new series about an elite undercover military unit, could employ some 600 New Mexico crew members, 180 resident actors and several thousand extras between this summer and December. Film industry insiders have said those are unusually high figures for a production shot in the state.
Maniatis said at least 17 television and movie productions have filmed in New Mexico since January and “a lot of productions are stacked up into January.”
Wayne Rauschenberger, senior vice president and chief operating officer of Albuquerque Studios, said that at one point this year, four productions were shooting at the same time at the studio. He said he received word that three television shows that have shot in New Mexico will “likely come back in the next six months.”
In addition, he said, a couple of feature films are contemplating shooting in New Mexico.
Martinez said she does not expect any new bills to increase or decrease the $50 million cap on incentives during the next legislative session. Maestas agreed with the governor on that point. He said New Mexico’s film industry is succeeding, so Democrats don’t want any bills that could disrupt it or instigate a new fight over the tax rebates.
But Rauschenberger said he would like to see the Legislature adjust the cap so the state can continue to expand the film industry. “We need to address it in the right way, with some increase that we can control.”
He also said Martinez has been good at “getting the message across” that the film industry is paying off for the state. Regarding a new governor taking office in January 2019, he said, “We’re always concerned when there are executive branch changes.”
Many other states, including Louisiana, Georgia, Utah and New York, offer similar incentive programs to attract the film and television industry.
Contact Robert Nott at 505-986-3021 or rnott@sfnewmexican.com.