NM pays $39K for every film job

Current data shows subsidies a bad deal for taxpayers

It was surprising to read the Oct. 6 op-ed by the Secretary of the Economic Development Department contending, without detail, data or explanation, that film production provides 8,000 jobs in New Mexico.

The New Mexico Film Office statistics published in the Journal on Aug. 23 show 320,000 “worker days” in films for fiscal 2019. It also shows annual “worker days” for FY 2015 through FY 2018 ranging from 200,000 to 450,000.

Since there are about 240 work days in a full-time work year, the FY 2019 figures were equivalent to about 1,350 fulltime jobs that year. Figures for the previous four years range from about 850 to 1,900 fulltime equivalent jobs.

The 8,000 jobs figure cited in the recent op-ed must include many part-time jobs of a few days, a few weeks or a few months, perhaps with some part-time employees accounting for multiple jobs in a single year.

Also particularly surprising was the op-ed’s criticism of a (Sept. 8) article by (former Tax & Rev Secretary) Dick Minzner, contending it relied upon “decades-old analysis” and data that is “out of date.”

The New Mexico legislative analysis cited by Minzner was based substantially on recent information provided by the secretary’s Economic Development Department itself. February 2019 EDD data showed that each film job created costs the state $39,000 annually. A 2014 study performed for EDD found the state received 33 cents for every dollar paid in subsidy and a 2019 study commissioned by the film employees’ union found a return of 41 cents on the dollar.

There was one area in which Minzner referred to old data. He suggested the reader Google “film subsidies analyzed.” That search locates studies and commentaries from many states going back to 2010 showing that film subsidies are losing propositions for states. Most of these sources are, in fact, dated within the past two or three years.

This subject is important for the state. The proposed expenditure of $110 million annually, not including additional payments to companies with facilities in the state, far exceeds any other economic development effort.

The secretary generously stated she welcomes a debate on this subject. A good place to start would be to discuss why one industry, film production, should be subsidized by the state far in excess of any taxes it generates when there are frequent assertions by politicians that “all taxpayers should pay their fair share.”

The selection of this industry for unequal treatment is particularly puzzling since a substantial amount of the spending subsidized goes to pay out-of-state performers, and, therefore, it is not available to be recycled in New Mexico. This probably means that spending in movie production has less of a “multiplier effect” than spending in most other industries.

The film industry is inefficient at creating jobs and at generating tax revenues for the state. There are certainly many industries that would create jobs in New Mexico at a lower cost than $39,000 annually per job. Nearly every industry could expand and pay substantial taxes if the state subsidized 25% to 30% of its operating costs.