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Saturday, January 17, 2009

Film Industry Proves Worth

By Dan Mayfield
Copyright © 2009 Albuquerque Journal
Journal Staff Writer
          The results of a new study are in, and this time the film industry comes out a winner for the state economy.
        The study, researched since September by Ernst & Young and released Friday by the Governor's Office and the state Film Office, reports that for every $1 the state spends on film, it gets $1.50 back.
        "We're really happy," said Nick Smerigan of Albuquerque Studios. "Trust me, across the United States, this is going be the survey that tilts a lot of windmills.
        "But we knew this all along."
        Smerigan and others had disagreed with the results of a study released late last year that showed the state gets back just 14 cents in taxes for every dollar it gives the film industry in incentives. That study was done for the Legislative Finance Committee by the Arrowhead Center, which is the economic development arm at New Mexico State University.
        But critics said the Arrowhead study was too narrow and didn't take into account money spent building studios, revenue from out-of-state crew members and other spending, which the Ernst & Young study did.
        "Finally, somebody actually did the dots and the crosses and looked at the actual info and did a survey based on the people who did this for a living," Smerigan said.
        Albuquerque Studios, for example, has spent more than $100 million building its studios and has hosted several of the state's biggest films, from "Terminator: Salvation" to "The Spirit."
        Last summer state Sen. John Arthur Smith, a Deming Democrat, floated a proposal that would have capped film program incentives.
        Film folks disagreed with the idea, and the state promised research would prove its incentives were well placed and productive, even if they seemed generous to filmmakers. The incentive program rebates up to 25 percent of a film's budget spent in New Mexico and offers other incentives to hire New Mexicans.
        "It's good to have the solid data we were expecting" said Eric Witt, the governor's director of Legislative and Political Affairs.
        The Ernst & Young study said the film industry has brought in several million dollars in capital improvements; created 2,200 direct jobs, including 1,670 jobs with average annual salaries of $49,500; created 9,210 indirect jobs; brought in $22.6 million in state tax collection; and was a boon to the state's tourism industry.
        The study was based on the year 2007, when 36 films were made here. Last year, however, a record-breaking 44 films were made in New Mexico, according to the Film Office.
        "This was absolutely necessary for us to do. It's extremely difficult to gather this data," said Lisa Strout, director of the Film Office. The study cost $50,000.
        Though it seemed unlikely the incentive programs were on the legislative chopping block, several film workers in the state were sweating. What if the incentives were capped or canceled?
        "I'm a total product of the incentives," said Brent Morris, a producer who moved here from Los Angeles in 2005. He's now working on the film "Friendship!", which wraps Wednesday in Albuquerque.
        Morris says he moved here when he noticed that film productions were moving to New Mexico, Louisiana and Toronto because of incentive programs.
        "There are so many people that are coming here, but I don't want to stress that. Albuquerque natives and New Mexico natives are working, too. It's reached a really good critical mass, and if the incentives decline we'll see a decline in the crew base, and the movies wouldn't be here," he said.
        The head of the state film workers' union, Jon Hendry, said he's seen his membership and membership payroll increase.
        For 2007, the study year, the International Alliance of Theatrical Stage Employees 480 had 900 members with a total payroll of about $40 million, Hendry said. In 2008, he said, enrollment increased by 500 members.
        Though jobs and economic impact were the focus of the study, film tourism also was examined. Film is directly responsible for about $18.9 million of tourism money as vacationers look to find the locations of some of their favorite films, the study said.
        "We reached a tipping point in '07," Hendry said. "If you liked '07, you'll love '08."