- Associated Press - Tuesday, July 22, 2014

SANTA FE, N.M. (AP) - New Mexico has created one job for every $8,519 spent on tax incentives to attract film and television productions during the past five years, according to a state-commissioned study released Tuesday.

Film-production spending created nearly 15,900 full-time jobs and generated about $104 million in taxes from mid-2009 through earlier this year, said the report released by the state Film Office. It estimated that the average annual wage of an industry job was $52,723.

“New Mexico is clearly a top-notch location for film and TV production, and the results of this study show the important, positive role that this industry plays in communities throughout the state,” Film Office Director Nick Maniatis said in a statement.

The report by a Canadian consulting firm, which included interviews with film and TV industry officials, said New Mexico is viewed favorably in the industry because of its tax incentives and other factors such as its diverse landscapes and the availability of local film crews.

Film and TV production generated $1.5 billion in direct and indirect economic output, the study said. That’s the value of goods and services produced by the industry in New Mexico, according to the study.

“Based on the limited information we have about other programs, it’s very likely this is the single biggest and most effective economic development program we have in New Mexico,” said Senate Democratic Whip Tim Keller of Albuquerque. Keller has pushed for better assessments of government tax incentives.

The state offers up to a 30 percent tax refund for certain film and TV production expenses. But a 2011 law capped the total incentives at $50 million a year. New Mexico is among 36 states that provide film tax incentives.

The film industry has received nearly $405 million in tax refunds in New Mexico since the incentives were enacted in 2002. About $239 million was provided during the time period covered by the report.

The study examined the impact of spending on film productions, such as salaries for crew members, equipment rental, leasing of sound stages, food catering and lodging.

Future reports by the consulting firm will examine other issues, including what impact the incentives have had on New Mexico tourism, educational programs for training film industry workers and local businesses that supply services for film companies.

A final report will be issued in 2017 providing an overall assessment of the incentives and making recommendations for better targeting them.

According to the report, film production generated about 43 cents in state and local taxes for each dollar of incentive the state granted. However, the consulting firm cautioned that “government tax incentives seldom return more in tax revenues than they cost.”

Wayne Rauschenberger, chief operating officer of Albuquerque Studios, said, “I think everyone would like to see a higher return on investment, but I think this is probably a reasonable return given the state of the industry over the past five years.”

The next phase of the study should show an improved return on the state’s investment as broader financial benefits are taken into consideration, such as film-related tourism and investments in studios and other infrastructure, he said.

In assessing the economic cost effectiveness of the incentive, the report said each dollar spent by the state on tax refunds for the industry resulted in about $7.18 in new gross state product from film work.

Jon Hendry, a union representative for film workers, said the report was being reviewed. But “our first impression is that this study confirms what we’ve been saying all along - that movies make money for New Mexico,” Hendry said.

Copyright © 2018 The Washington Times, LLC.

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