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New Mexico governor calls for big cut in film tax rebate program

New Mexico may be running away from runaway production.

One of California's biggest rivals for film production has proposed a heavy cut in its tax rebate program, which offers filmmakers a 25% rebate on their production costs.

New Gov. Susana Martinez, a Republican who has vowed to curtail government spending, on Monday called for reducing the credit to 15% under a plan to balance the state's budget.

The recommendation follows the recent resignation of former New Mexico Film Office Director Lisa Strout, who served under the administration of Democratic Gov. Bill Richardson, and triggered alarm in New Mexico's production community.

Supporters said the cut would effectively take New Mexico out of the running for Hollywood productions because its credit would be lower than what most other states now offer.

"Any kind of reduction, and particularly a 40% reduction, says New Mexico is now closed for business,'' said Dana Arnold, partner for Albuquerque Studios, which is scheduled to host the Marvel Studios superhero movie "The Avengers" in April. "In these tough economic times, we need to do everything we can to foster job creation, and a reduction in the film incentive program is not the solution to continued job creation." 

New Mexico's move is just the latest sign of retrenchment of state film programs, which are drawing sharper scrutiny at a time when many states are facing fiscal crises and as new, more conservative-leaning administrations take steps to curb government spending.

Ohio Film Office Director Jeremy Henthorn was asked to resign last week as new Republican Gov. John Kasich took office. Iowa's new Gov. Terry Branstad plans to dismantle the state's incentives in the wake of a scandal there. And Nick Paleologos, head of the Massachusetts Film Office, resigned last month in a cost-cutting move.

-- Richard Verrier

Comments () | Archives (14)

Governor Martinez would be foolish to cut the movie industry incentives as in actuality the industry provides much needed discretionary spending in other areas and provides many jobs for the locals who otherwise be unemployed .
Many within the industry have bought homes in the Santa Fe and Albuquerque areas .With the sale of a home comes many required services that employ locals .
She is being extremely shortsighted .

Gov. Martinez is not well informed on the film industry or on matters of economic development in general. So it's no surprise to me that she would listen to the most ignorant people in the state who fail to see the benefits of this program. So much for NM being "open for business". When the states private sector unemployment rate goes up, then the Democrats will smell blood in the water.

New Mexico does not need the film industry anymore because we are dispensing with all the environmental regulations so we can turn over the state's natural resources to the oil and gas industry.

Tax credits and/or incentives are bad deals for the citizens. Financial journalism is a hard beat and it's even harder for the lay person to understand it. The only one who has gotten close to making this kind of information palatable is the author Michael Lewis ("The Big Short" et al).

A couple journalists have explained why these tax deals are a boon to the studios and a bust for the state, but all people remember is the ubiquitous press conference by the governor who declares: "We're bringing Hollywood to (fill in the state) and we're creating new jobs and new careers...." It makes for a wonderful news clip on the local news shows and papers and that's about all it does for the state. It's a money-loser and that's why very few states do them. In plainer language, it's called a subsidy.

Great logic. Soon they'll be zero money coming in via the movies so no need to worry about taxing it period.

New Mexico's tax incentives to Film production have positive effects on the community that cannot be measured. I have seen a tremendous amount of civic pride from so many people who are happy and excited that the film industry is here and is growing. WHY would you kill that? Local industries benefit from the influx of production and crew. Restaurants, Hotels, Retail. if you close that off then you will see significant job loss. It's a big deal that The 25% tax break keeps New Mexico competitive and it is the only thing that will keep that business coming back.

WOW... get rid of one business to create another.... Want a wonderful business plan that the new governor has proposed to the state. By getting rid of the movie industry in NM, which will happen if there is a move to a lower rebate. The income outweights the outgoing cost. The taxesthe state receives off the housing and items purchased while the cast and crew are here.. let alone the locals that are hired. Utah is hoping NM will chase the movie industry to them, some of the posted comments here might even be from people in Utah hoping for a move to them. Thanks, (from Carlsbad, NM)

Shame on you, Susana Martinez. Pennywise, poundfoolish antics will lead to 30,000 jobs disappearing, related retail and hospitality revenue tanking, and a veritable ghost town of already existing studio back lots.

We the people will fight this and see New Mexico's film industry boom to newer and bigger heights.

I moved to New Mexico to work in film. I bought a house and a car and contribute to the economy here everyday. By taking away this incentive, I will be forced to go on unemployment, foreclose on my house and move to another state. I am one of thousands - tell me how does this fix anything in New Mexico?

The film industry makes billions and billions of dollars, and top actors, producers, and directors make obscene amounts of money, yet they expect our poorest states to subsidize them.

Enough already. Pay your taxes like everybody else!

Anything Dana Arnold says is right on the money.

Movie / TV industry are just like coupon-clippers that go with the lowest price option. It is a never ending battle for states to keep them and not worth it.

To the people in NM, quit whining about it, no job is 100% guaranteed to last for any amount of time. Maybe you shouldn't have bought a house and instead should have rented!


Now maybe ReelzChannel will return to LA from its tax-haven exile, hire back the 150 people it laid off 2 years ago, and actually tape its Hollywood Dailies flagship show in Hollywood!

She also wants to eliminate New Mexico's medical marijuana ("MM") program, claiming in encourages state employees to violate federal law.


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