By Sophie Wickert and Jeremy Zeilik
Efforts to repeal the statewide film tax-cap failed in this year’s session of the New Mexico state legislature, raising concerns that New Mexico will lose film and TV business to other states.
The New Mexico state government provides a tax incentive of 25 percent to any film that shoots in the state, but there is a limit in the form of a $50 million cap.
While a bill to remove the cap failed in the 30-day legislative session, the idea has become a central talking point among local filmmakers and among candidates in the 2018 gubernatorial race.
A bill to remove the $50 million tax cap failed to pass at the last legislative session. Photo: Jeremy Zeilik / NM News Port
The film cap was put in place by Gov. Susana Martinez in 2011 to limit the amount of money the state was spending on tax incentives during the recession.
“So far the cap hasn’t affected production yet,” said Nick Maniatis, the head of the New Mexico Film Office. “We haven’t reached the cap naturally, yet, but we may this year or the following.”
Maniatis explained that the cap works by keeping the amount of money the state spends each year on film rebates to a $50 million maximum. This doesn’t mean that if the cap is reached, productions won’t get paid. Instead they will have to wait for the rebate during the state’s next budget cycle, said Maniatis.
“If we do hit the cap naturally, than those claims that come after the $50 million will instead of getting their check in January, will get it July 1,” said Maniatis.
The bill to remove the film cap failed to make it to the floor for a vote during the 2018 session. It was introduced by Democratic House Majority Whip Antonio “Moe” Maestas.
Maestas says he sponsored the measure to help make New Mexico a competitive film market.
“When you take out Manhattan and Hollywood, there are only three competitors for film: Georgia, Louisiana and New Mexico. And we want New Mexico to be the center for film production,” Maestas said.
Though the bill did not pass during this legislative session, Maestas said he is still hopeful it will pass in the future. “We want to put it out there as a campaign issue, so that the people can ask the candidates for governor whether or not they support lifting the cap.”
Compromise is possible too, Maestas said. Short of removing the cap, it could be raised from its current $50 million, which could bring more production dollars to New Mexico, he said.
For independent and local filmmakers like Matthew McDuffie, the tax incentives were the reason to shoot in the state.
“For our production the incentive was one of the main reasons we could do it,” said McDuffie. “It was a quarter of the budget, and that is not nothing when you’re dealing with every penny.”
McDuffie believes the film cap should be removed because the state stands to grow its film industry, he said.
“Those are big machines that come in and shoot movies,” said McDuffie. “That’s a lot of hotel rooms, and a lot of enchiladas to sell.”
Productions that do come to New Mexico often give lower level position workers like production assistants and lighters the opportunity to work in the first place, he said.
Opponents to the removal of the film cap fear that it will cause the state to become overextended both financially and.
Dirk Norris, the executive director of the New Mexico Film Foundation, supports the removal but still has concerns about future productions.
“We could run out of film crew,” said Norris. “That could be an issue.”
Norris said he believes that removing the cap would bring more productions to the state, but that New Mexico wouldn’t have the immediate infrastructure needed to support the growth. The supply of “below the line jobs,” which include people who work on set in positions like lighting and set design, might run out due to high demand, he said. That would require productions to use people from out of state.
“When the productions run out of film crew they go out to find overflow, and sometimes new people have a hard time getting on set because they get locked out by people being flown in from Los Angeles,” said Norris.
The solution might be establishing new internship programs within the state to help on large productions, said Norris. That way people who live in New Mexico have the opportunity to be brought into the industry and to work continually on different projects, he said.
When asked about how the New Mexico film industry might change after the 2018 New Mexico governor’s election, he said, “It couldn’t get any worse than what Gov. Martinez has done.”
But overall Norris was optimistic about the future of film production, noting that all three major gubernatorial candidates, Democrats Michelle Lujan-Grisham and Jeff Apodaca and Republican Steve Pearce, approve of removing the cap.
For more follow Jeremy and Sophie.
