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New Mexico film impact estimated at $1.5 billion

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Seth MacFarlane wrote, directed and starred in the film "A Million Ways to Die in the West," which was shot in Jemez Springs, Shiprock and Santa Fe.

Seth MacFarlane wrote, directed and starred in the film “A Million Ways to Die in the West,” which was shot in Jemez Springs, Shiprock and Santa Fe.

SANTA FE – New Mexico’s film industry has pumped millions of dollars into the state’s economy, provided thousands of jobs and generated $1.5 billion in total economic output during a roughly four-year period starting in mid-2010, a new state study concludes.

But the long-awaited study, released

Tuesday, also found that film production activity – both movies and TV shows – generated an estimated 43 cents in tax revenue for every incentive dollar spent by the state between 2010-2014, the study says.

An estimated 15,848 full-time jobs were created by the industry during that period, while the state paid out $251 million in total incentives in the same time frame.

A scene is filmed for the TV show "Better Call Saul" on a billboard next to Interstate 25 near Albuquerque High School on Tuesday. (Greg Sorber/Albuquerque Journal)

A scene is filmed for the TV show “Better Call Saul” on a billboard next to Interstate 25 near Albuquerque High School on Tuesday. (Greg Sorber/Albuquerque Journal)

That finding falls between two previous studies on the economic impact of film tax credits in the state. A New Mexico State University analysis had estimated the return on every dollar the state spends in the form of tax rebates at just 14 cents, while an Ernst & Young study had pegged the figure at $1.50 for every dollar of state subsidy.

Rick Clemente, the CEO of I-25 Studios in Albuquerque, said the latest study is probably the most “real” of the three reviews of the industry in New Mexico. He said it shows the value of the film industry as an economic driver and job-creating force for the state.

“These jobs that are being created are $52,000-a-year jobs,” Clemente told the Journal. “Film is good for New Mexico.”

The state film study, which was conducted by the Canadian accounting firm MNP, has been in the works for several years. State lawmakers approved a bill mandating the analysis in 2011.

Gov. Susana Martinez, who pushed to trim the film incentive program after taking office in 2011 but has since signed legislation expanding the size of available rebates for qualifying TV shows, said the film industry has helped diversify the state’s economy.

“We continue to have a strong incentive program, with increased predictability and stability in our state budget, and we are fighting to build a more competitive, diverse economy in every corner of the state,” Martinez said in a statement.

“New Mexico has so much to offer to those who are in the business of searching for the right place to shoot a movie or television program, and our communities clearly benefit from these opportunities,” the Republican governor added.

Jon Hendry, the business agent for a local film workers union, cited the overall economic findings – total dollars in the economy and jobs – and said the direct tax return figure does not tell the full story of the film industry’s impact in New Mexico.

“It’s kind of confirming what we’ve been saying all along,” Hendry said.

Early incentives

New Mexico was one of the first states to launch a film incentive program – it began in 2003 – and is now one of 36 states to offer tax incentives to filmmakers, according to the study.

The state currently offers a 25 percent rebate to film companies for most direct, in-state expenditures. Under the 2011 legislation that was dubbed the Breaking Bad bill, long-running television programs are eligible for an additional 5 percent credit – or 30 percent in all.

Concerns about the increasing amount of state money being spent on film incentives prompted Martinez to push to trim the program in 2011. State lawmakers eventually enacted an annual $50 million cap on film incentive spending, as well as other restrictions.

After a slowdown in filming that followed the 2011 changes, filming in the state has picked up in the last two years.

A total of 58 registered productions – including movies, TV shows and music videos – were filmed in New Mexico during the first three quarters of the 2014 budget year, the study found. That’s equal to the entire amount of productions shot statewide during the previous budget year, and an increase from the 2012 output of 55 productions.

New Mexico-based shows such as “Breaking Bad” and “Longmire,” have drawn critical acclaim and Clemente said two new major TV network productions could be announced soon.

Despite the recent debates over the film program’s future, the study found New Mexico is viewed favorably by the film and TV industry and has become a “well-established and important” production location.

Johnny Depp starred in the sci-fi thriller "Transcendence," filmed in New Mexico and released this year. (Warner Bros./AP Photo)

Johnny Depp starred in the sci-fi thriller “Transcendence,” filmed in New Mexico and released this year. (Warner Bros./AP Photo)

Review continuing

Sen. Tim Keller, D-Albuquerque, who sponsored the legislation that mandated the film incentive study, said the analysis will give state lawmakers a better handle on the tax credit program and could lead to future policy changes.

He also pointed out the data represents just the first phase of the study. Three additional phases, analyzing the film industry’s impact on tourism, state education and more, will be released on a once-per-year basis through 2017.

“I think the very encouraging news is the numbers are only going to get better once they dive deeper,” Keller said.

While Martinez has said she would consider future changes to the film tax credit program, a state Economic Development Department spokeswoman said no policy changes are currently being considered.

Meanwhile, state officials said the study shows the state is still a major player on the film production landscape.

“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,” said Nick Maniatis, the director of the New Mexico Film Office.

The state is paying $208,000 for the study, though the costs will be spread out over its four-year lifespan, according to the Economic Development Department.

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