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House gets plan to pay half of film backlog

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New Mexico Economic Development Secretary Alicia Keyes talks with Rep. Roberto “Bobby” Gonzales, D-Taos, about a bill to pay off some of the state’s film rebate backlog. The bill passed the House Appropriations and Finance Committee on Thursday and now goes to the House Floor. (Eddie Moore/Journal)

SANTA FE – A revised plan to pay off more than half of a hefty backlog in New Mexico film credits is headed to the full House, despite concern about ever-changing cost estimates.

The legislation, House Bill 527, would authorize paying up to $225 million over the next 16 months – with $30 million of that contingent on state revenue levels – to reduce the backlog that’s accumulated under a 2011 law that limits annual state spending on the film incentive program.

The House Appropriations and Finance Committee on Thursday approved the measure on a party-line 10-6 vote, with Democrats voting in favor and Republicans in opposition.

“It’s a bill we owe, whether we like it or not,” said the committee’s chairwoman, Rep. Patricia Lundstrom, D-Gallup, in reference to the backlog of rebates for movies and TV shows filmed in New Mexico.

Gov. Michelle Lujan Grisham, a Democrat who took office in January, has called for eliminating the $50 million cap yearly cap on film subsidy spending.

She has also urged lawmakers to authorize a one-time payment to cover the entire backlog, which was recently estimated to be $382 million at the end of this year.

But some lawmakers have balked at that request, saying the film industry provides little benefit to rural New Mexico and arguing the money would be better spent on the state’s roads or on other projects.

“I really can’t support putting out this much money unless we can figure out how to avoid accumulating this much debt in the future,” said Rep. Paul Bandy, R-Aztec.

Specifically, the bill approved Thursday after being amended would allow for $100 million to be paid toward the backlog during the budget year that ends in June. An additional $125 million could be paid in the coming budget year, though some of that appropriation would be authorized only if incoming state revenue levels end up exceeding estimates.

Two Cabinet secretaries in Lujan Grisham’s administration testified in support of the legislation, with Economic Development Secretary Alicia Keyes calling the film industry a valuable part of the state’s economy.

“It’s bringing money that would not be here otherwise,” Keyes told legislators.

For her part, Finance and Administration Secretary Olivia Padilla-Jackson said the bill would help assure national credit rating agencies that the state has a plan to pay off the accumulated backlog and not let it grow any larger.

In its current form, the bill would not affect the annual cap on film rebate spending. A separate piece of legislation, Senate Bill 2, seeks to remove the cap.

Currently, film companies receive a 25 percent rebate on expenses for most projects in New Mexico and up to a 30 percent rebate for some TV shows.

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