Some lawmakers skeptical of film credit despite return

The film, television and media industry continues to pour hundreds of millions of dollars into New Mexico’s economy, according to a new report the state film office commissioned.

The business created $854 million in direct spending in fiscal years 2020 and 2021, according to the report, conducted by the United Kingdom-based consulting group Olsberg SPI and presented to members of the legislative Revenue Stabilization and Tax Revenue Committee on Tuesday.

In return, the state gave out about $160 million in tax credits during that time.

“There is a really significant return on economic investment,” said Eleanor Jubb a consultant with the Olsberg SPI, which focuses on the film and related media industries. “The reason it is so high is because of the success of the New Mexico tax credit incentive.”

Among other benefits, filmmakers can qualify for 25 percent tax rebates on qualified expenses for projects shot in New Mexico. Television production companies that bring long-term series to the state can receive rebates of 30 percent. Additional potential incentives for shooting a film in rural areas can bring that rebate figure up to 35 percent for some productions.

Not all the lawmakers were impressed with the study.

Rep. Larry Scott, R-Hobbs, said he would be more comfortable accepting those figures if a major auditing firm had conducted the study rather than a group that stands to benefit from the industry it is analyzing.

“My fear here is ... that we’ve set the foxes to count the chickens,” Scott said.

Some Democratic lawmakers more friendly to the film incentive program — which has over the years driven up the number of film, television and media productions in the state — still voiced a few concerns about the way the deal works.

Rep. Javier Martinez, D-Albuquerque, said the “numbers make less and less sense as we move forward” in some cases. He said while he is a big fan of the film industry, it’s probably fair to assume the movie business will go to the state offering a better incentive deal.

“There are some very real issues here that bear discussion,” he said.

New Mexico Film Office Director Amber Dodson told Martinez and the other lawmakers film companies prefer stability, and New Mexico offers that

in its film crew base, movie studios and financial offers. “New Mexico does have other assets that cannot be created elsewhere,” she said.

She and Leon Forde, managing director for Olsberg SPI, said New Mexico’s film incentives are pretty much in line with those offered by other states. In response to a question from Martinez asking if the state would hold the line at its current incentives even if other states offer more, Dodson replied: “Yes.”

For years the state has used financial data from film, television and media productions filming in New Mexico to compile an annual estimate of how much they spend to help justify the production incentives New Mexico offers to the industry, which has undergone intense scrutiny locally and nationally in the wake of a shooting on the set of the movie Rust that left a cinematographer dead and the film’s director wounded.

The controversy surrounding Rust did not come up during the hearing. The case is still under investigation and has prompted a number of civil lawsuits in California.

The film office commissioned the Olsberg SPI study in May. It was not designed to look at employment metrics, though a member of the film office told lawmakers about 8,000 New Mexicans are employed in the business over the course of a year. According to the study, analysts used registration forms, film statistics data, tax rebate applications to the state, data on the disbursement of the tax credit and “consultations with supported productions, legislators, vendors and other stakeholders.”

Former Gov. Gary Johnson, then a Republican, is credited with signing the first level of film production incentives into place in the 1990s. The incentives have been tweaked and expanded over the years and led both Netflix and NBC Universal to set up anchor production facilities in New Mexico. Netflix has committed to spending $10 billion over the next 10 years, Dodson said, a sign the state can become a hub for filmmaking.

Martinez said he likes the idea of pitching incentives toward media groups that want to make New Mexico home, rather than for companies that come in to shoot a movie and then leave. Both he and Rep. Antonio “Moe” Maestas, D-Albuquerque, said they’d like to see future incentive pitches aimed at supporting New Mexico-based talent and tales.

“Telling a New Mexico story is key,” Maestas said.

In January, MovieMaker magazine chose Albuquerque and Santa Fe as among the top cities for film workers.