Gov. Susana Martinez is striking a kinder, gentler tone when it comes to the rebate program for movies and television shows filmed in New Mexico.
Given the state’s improved finances, Martinez said she might be willing to consider pumping more money into the program to make it more enticing to producers.
“I understand that it (the film industry) is very important as part of our economy,” the governor told reporters during a visit last week to the set of the TV show “Longmire” in Santa Fe.
Now, let’s push the rewind button.
During the gubernatorial campaign in 2010, Martinez said she supported efforts to bring the film industry to New Mexico but, if elected, would order “an independent economic review of these incentives to ensure New Mexicans are getting an adequate return on investment.” (That review, by the way, has never been conducted.)
Faced with a budget crunch after taking office in January 2011, the governor proposed that the rebate rate for film productions be cut from 25 percent to 15 percent of allowable expenses.
Martinez made Hollywood sound like a villain in pushing the rate reduction.
If there were no cut in the rebate rate, there would be less money for child care services for working moms, the governor said. And less money for public education. And less money for health care for the poor. And less money for prisons.
“We can continue to fund Hollywood at 25 percent on the backs of our kids, or we can start cutting back,” Martinez said at a news conference in early 2011.
Other industries also benefit from substantial financial incentives in state law, but few, if any, of those other incentives are as sweet as the deal for the film industry.
But for Martinez, it was never the oil and gas industry versus working moms. Or insurance companies versus kids.
The governor also said the film program had been abused, with Hollywood collecting rebates for money spent on private jet travel, gifts, five-star hotels and parties. There certainly was evidence to support Martinez’s criticism.
Martinez eventually compromised with the Legislature on the future of the program, agreeing to keep the rebate rate at 25 percent but capping total payouts at $50 million a year.
Under an omnibus tax bill approved in March by the Legislature and signed by the governor, the rebate rate for long-running TV shows filmed in New Mexico will jump to 30 percent.
The tax bill also included two major tax initiatives sought by Martinez: a reduction in the top-end corporate income tax rate and a change in tax law to allow manufacturers to use a “single sales factor,” meaning their taxes will be based entirely on New Mexico sales. Their taxes are now based on a combination of sales, payroll and property.
For Martinez, the tax bill was perhaps her biggest legislative achievement since taking office, and film workers helped her win it.
The New Mexico Federation of Labor, whose members include the film workers local, lobbied for the tax legislation. Jon Hendry, president of the federation’s executive board, is also the business agent for the film workers.
“We all got something we wanted by holding our nose to things we didn’t want,” Hendry says of the tax bill.
So, was Martinez’s visit to the set of “Longmire” and her softer tone toward Hollywood a way to say “thank you” for help in getting the omnibus tax bill passed by the Legislature? No, says Hendry.
“Just because we supported this tax bill don’t think she’s changed her mind on unions,” he says.
Hendry says he believes Martinez came to the conclusion that beating up on Hollywood isn’t a winning political strategy among New Mexicans.
“They like seeing New Mexico in the movie theater,” he says. “They like seeing people working.”
Hendry says Martinez also finally got the message that the film industry is an economic engine that produces not only jobs, but increased sales for businesses that supply goods and services to productions.
The governor insists her stance on the film industry hasn’t changed since she took office.
“I’ve never been critical of the subsidy to the film industry if it didn’t cost, or take away, from education,” Martinez said during her visit to the “Longmire” set.
UpFront is a daily front-page news and opinion column. Comment directly to Thom Cole at firstname.lastname@example.org or 505-992-6280 in Santa Fe. Go to ABQjournal.com/letters/new to submit a letter to the editor.
— This article appeared on page A1 of the Albuquerque Journal