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Film Rebates Plunged in Fiscal Year

SANTA FE – The amount of film rebates approved by New Mexico plunged during the just-completed budget year, the first year since the state imposed a $50 million-a-year cap on the controversial incentives.

Finance and Administration Secretary Tom Clifford this week attributed the drop in film incentives to an industry-wide slowdown and a rush to file rebate claims before last year’s new law took effect, though others point to different reasons.

“What we did by capping the film credit is scare off business,” Sen. John Sapien, D-Corrales, said during a legislative hearing Wednesday in Rio Rancho.

A total of 85 film rebate applications totaling nearly $19.2 million were approved during the fiscal year that ended June 30, according to the Taxation and Revenue Department.

In addition, 27 applications that add up to more than $14.1 million in rebates were still pending as of the fiscal year’s end.

Those numbers fall far short of the $102 million the state paid out during the 2011 fiscal year, the final year before implementation of the annual cap and other new restrictions, which were supported by Gov. Susana Martinez.

Martinez and others claimed the film incentives – which offer a 25 percent rebate to film companies for most direct, in-state expenditures – were “Hollywood subsidies” that cost the state money that could otherwise be spent on public education.

Before approval of the cap, the quantity of film rebates paid out by the state to qualified film and television productions had grown by leaps and bounds – from $1.1 million in the 2003 fiscal year to the $102 million mark two years ago.

However, while the price tag for the film rebates decreased significantly in the last year, the number of approved applications actually increased from 55 in the 2011 fiscal year to 85 in the year that just ended, according to the taxation department.

That could be due to several causes, including stricter limitations on how much lodging, rental car and other types of spending are eligible for rebates.

The decrease in approved rebates was not entirely unexpected, as the New Mexico Film Office had predicted the approved amount for the just-completed fiscal year would fall short of the $50 million annual limit.

The Martinez administration is also working on producing a wide-ranging study of the film rebate program’s impact on state tourism, education and job creation. The study was mandated by the Legislature in 2011.
— This article appeared on page C1 of the Albuquerque Journal