SANTA FE – New Mexico’s generous tax incentives for film production have supported thousands of local jobs and generated an estimated $ 933 million in total economic output last year, according to a study released Tuesday by the Department of Economic Development of State.
The report from Olsberg SPI, a London-based company, said every tax dollar spent on the film program has brought in about $ 8.40 to the state economy over the past two years.
In a presentation to state lawmakers, analysts at the company did not ask whether the program resulted in additional tax revenue for the state due to the additional economic activity. But they said it had a positive impact on the economy as a whole.
New Mexico offers a 25% refundable tax credit for expenses on state film crews, goods, services, and other qualifying expenses. The rate can reach 35%, depending on where it is shot, among other factors.
Eleanor Jubb, economist and senior consultant at Olsberg SPI, said the bulk of film production in New Mexico is the result of incentives. At least 92% of the activity would not take place, she said, without the incentives, according to the company’s research.
His company calculated that every $ 1 invested in the program resulted in an additional economic value of $ 8.40.
“It’s a really positive and significant economic return on investment,” Jubb said.
Lawmakers reacted cautiously to the report.
House Majority Leader Javier Martínez, D-Albuquerque, has said he wants to make sure tax incentives are effective and reach the people who need them most, perhaps by targeting companies that establish their headquarters and engage in New Mexico.
“When I start looking at the numbers,” Martínez said, “they make less and less sense as we go along.”
Rep. Larry Scott, R-Hobbs, has suggested that movie incentives are too expensive for the state, given teachers’ low income. He also questioned the findings of the study.
“My fear here is that we put the foxes to count the chickens,” he said.
Jon Clark, a former legislature economist who now serves as assistant secretary for economic development, said his department would welcome legislative funding for another study.
But Clark said Tuesday’s report already shows the incentive program offers solid economic benefits to New Mexicans. About 8,000 jobs are associated with the industry, a number he says is almost certainly a serious undercoverage.
And “these are very high paying jobs,” said Clark.
Amber Dodson, director of the state film bureau, said New Mexico’s incentives are in line with what’s offered elsewhere and are proving to be effective.
“We feel like we’re in a really good place where we are,” Dodson said.