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SANTA FE - Is subsidizing moviemakers with taxpayers' money a sound investment or a government giveaway?
Neither New Mexico legislators nor economists can agree on an answer.
Perhaps the only certainty is that Gov. Susana Martinez has picked a fight with Hollywood as one of her first actions, proposing to cut subsidies for moviemakers in a state whose film industry has exploded during the last decade.
Martinez, a Republican, wants to reduce tax credits for film productions from 25 percent to 15 percent. She said the change would save state taxpayers $25 million this year.
Numerous other governors, such as Republican Rick Snyder of Michigan, also want to cut money for the movie industry. Michigan has had the nation's most generous movie subsidy since 2008, but a state study said the cost of the program outweighed the benefits.
Studies in New Mexico have reached differing conclusions on whether taxpayer support for moviemakers has paid off through more jobs and revenue.
But New Mexico state Rep. Dennis Kintigh said using tax money to help the movie industry is bad public policy. He has reintroduced a bill to kill the moviemaker subsidy altogether.
Kintigh, R-Roswell, said the benefits of the film industry are exaggerated and the subsidy for Hollywood puts a burden on taxpayers.
"If film producers spend $1,000 to feed people on a set, they receive a check from the state for $250 because food is a production cost. No other industry gets that," Kintigh said.
Another
"The only industry in New Mexico that had sustained growth is the film industry," Beffort said.
She said movies had become a sophisticated enterprise in the state. Private studios have blossomed, and community college programs have tailored training so New Mexico residents can fill the specialized production jobs of movies and television shows.
Beffort also said the complexities of making movies necessitated a consistent state policy. A filmmaker who was told a 25 percent tax credit is available may take three years to get into production. He likely would shift his project elsewhere if the incentives in New Mexico were cut, Beffort said.
The New Mexico Film Office lists more than 150 movies and television series as having been produced in the state since 2003. Beffort said that benchmark was used because it was when New Mexico became "the gold standard" nationally for attracting moviemakers. The state's incentive program and its structure to accommodate productions with skilled crews gave New Mexico an edge over most places, she said.
"Employee of the Month," "The Longest Yard," "No Country for Old Men," and the AMC television series "Breaking Bad" were among the projects filmed in New Mexico during that stretch.
"Due Date," a comedy starring Robert Downey Jr., and "The Burning Plain," starring Charlize Theron and Kim Basinger, were both shot in part in Las Cruces.
Most films are made on sound studios indoors, Beffort said. So a state that has trained workers and the right economic package can offset a seeming geographic advantage elsewhere and land a movie, she said.
Dana Arnold, president of Albuquerque Studios, said New Mexico's program is an investment that grows jobs, not corporate welfare.
"The movie business is nuanced, it's complicated and it may not be understood by everybody. But we have phenomenal crews and great people. We can build an industry here," he said.
As for subsidies, Arnold said, government provides them for everything from agriculture to manufacturers to oil explorers.
"This tax credit for film is a tiny one compared to all the other incentive programs for businesses, yet it's the one that gets focused on," Arnold said.
Robert Tannenwald, a senior fellow with the nonpartisan Center on Budget and Policy Priority in Washington, said there was good reason to scrutinize state governments' treatment of moviemakers. He recently authored a study titled: "State Film Subsidies: Not Much Bang for Too Many Bucks."
In an interview, Tannenwald said Martinez and other governors were right to be skeptical of funneling public money to moviemakers.
"You get the illusion of a cost-effective economic driver because you see a set and people working," Tannenwald said. "But when you actually cost it out, movies don't translate into good, long-term jobs for residents. And long-term jobs for residents is, to me, the goal of economic development."
Subsidies have led to other problems.
In Iowa, Democratic Gov. Chet Culver closed the state film office because of a scandal on improper payments to film companies. One moviemaker has pleaded guilty to felony theft, and four other people have been charged with crimes.
State Rep. Kintigh, a retired FBI agent, said he had investigated every economic study on public subsidies for movies and the overwhelming majority found it a bad idea.
"We've paid for this through the nose, and they can pack up and leave tomorrow," he said.
Both Kintigh and Beffort are fans of Martinez. Each hopes to persuade the governor in a different direction when it comes to film subsidies.
Beffort said the movie business is a complex one, and that Martinez had been overwhelmed in crafting a budget during her first two weeks. Beffort said New Mexico's film program might be tweaked, but reducing it by 40 percent as Martinez proposes would hurt a private industry that is growing in New Mexico.
On this debate, Beffort said, every eye in Hollywood is watching New Mexico.
Santa Fe Bureau Chief Milan Simonich can be reached at msimonich@tnmnp.com or (505) 820-6898.
