7-26 Casting Light on Film Tax Credits
By JAY MILLER
Syndicated Columnist
SANTA FE -- New Mexico lawmakers are finally getting a little closer look at film industry expenditures in New Mexico.
Earlier this month the New Mexico Film Office revealed to the Legislature's interim Revenue Stabilization and Tax Policy Committee a breakdown by spending categories of expenses incurred by six big-ticket films shot in the state this past year.
The state Film Office director Lisa Strout said this was a very big step for the industry because, she said, her report isn't required by other states that offer tax rebates to film productions.
Whoopee. Big deal. She said she couldn't break down costs by film and that she didn't even know which six films were included in her report..
We've already learned that national think tanks on both the left and right say that fewer than 10 states don't systematically analyze the effectiveness of tax credits. And we think we're getting more information than those 40-some states that do analyze effectiveness?
Something is screwy here. We are told there have been 141 major film and television productions filmed in New Mexico since the film production tax credit began in 2003.
Obviously all 141 of those productions reported individually to the state of New Mexico in order to receive their tax credit. They didn't report anonymously because the state Taxation and Revenue Department had to know where to send the check for 25 percent of their allowed expenses.
When those productions report to the state, it should be a public record. Some $65 million of taxpayer money is going to those companies.
There may be reasons why those 141 companies don't want to report how they spend their money but if they are going to receive major handouts of taxpayer money, they should be required to allow the state to reveal what is in the reports.
The state has the data lawmakers want but it had to agree not to reveal it -- not to the film office director or the Legislature, which is the ultimate decision maker about tax policy.
Sure, the film industry is a big and glamorous business and maybe it would completely leave the state, as Strout tells us, if the tax credit were to be repealed.
But there is middle ground. We could scale back the $25 we give the industry every time it reports $100 of expenditures. That would help us determine if state government claims are true that it is the tremendous service we deliver to film companies and our beautiful scenery.
Or we could start requiring film industry agreement that more information can be released. This release of additional information earlier this month happened as a result of Gov. Richardson implementing a new policy last September. requiring film companies to agree to the release.
In fairness, there are reports that a few states offer even higher credits than the 25 percent New Mexico offers. But it is difficult to believe the film industry is powerful enough to get big rebates without agreeing to make any information available to the public.
It has also been revealed that two of the 27 business tax credits aimed at stimulating economic growth are being analyzed to determine their effectiveness by tracking dollars and economic impact.. They are the Job Training Incentive Program and the Small Business Assistance Program.
On two items we know our two gubernatorial candidates agree. They are the need for tracking the use of tax incentives for their effectiveness and the imposition of no new taxes.
If state revenue projections in August turn out as dismal as predicted by some legislative leaders, we may need to have some very tough looks at tax credits, exemptions and deductions.
Current governors across the nation are busy trying to convince the White House and Congress to give another economic stimulus boost to the states. New Mexico already has $200 million of stimulus funds figured into its budget.
MON, 7-26-10
Syndicated Columnist
SANTA FE -- New Mexico lawmakers are finally getting a little closer look at film industry expenditures in New Mexico.
Earlier this month the New Mexico Film Office revealed to the Legislature's interim Revenue Stabilization and Tax Policy Committee a breakdown by spending categories of expenses incurred by six big-ticket films shot in the state this past year.
The state Film Office director Lisa Strout said this was a very big step for the industry because, she said, her report isn't required by other states that offer tax rebates to film productions.
Whoopee. Big deal. She said she couldn't break down costs by film and that she didn't even know which six films were included in her report..
We've already learned that national think tanks on both the left and right say that fewer than 10 states don't systematically analyze the effectiveness of tax credits. And we think we're getting more information than those 40-some states that do analyze effectiveness?
Something is screwy here. We are told there have been 141 major film and television productions filmed in New Mexico since the film production tax credit began in 2003.
Obviously all 141 of those productions reported individually to the state of New Mexico in order to receive their tax credit. They didn't report anonymously because the state Taxation and Revenue Department had to know where to send the check for 25 percent of their allowed expenses.
When those productions report to the state, it should be a public record. Some $65 million of taxpayer money is going to those companies.
There may be reasons why those 141 companies don't want to report how they spend their money but if they are going to receive major handouts of taxpayer money, they should be required to allow the state to reveal what is in the reports.
The state has the data lawmakers want but it had to agree not to reveal it -- not to the film office director or the Legislature, which is the ultimate decision maker about tax policy.
Sure, the film industry is a big and glamorous business and maybe it would completely leave the state, as Strout tells us, if the tax credit were to be repealed.
But there is middle ground. We could scale back the $25 we give the industry every time it reports $100 of expenditures. That would help us determine if state government claims are true that it is the tremendous service we deliver to film companies and our beautiful scenery.
Or we could start requiring film industry agreement that more information can be released. This release of additional information earlier this month happened as a result of Gov. Richardson implementing a new policy last September. requiring film companies to agree to the release.
In fairness, there are reports that a few states offer even higher credits than the 25 percent New Mexico offers. But it is difficult to believe the film industry is powerful enough to get big rebates without agreeing to make any information available to the public.
It has also been revealed that two of the 27 business tax credits aimed at stimulating economic growth are being analyzed to determine their effectiveness by tracking dollars and economic impact.. They are the Job Training Incentive Program and the Small Business Assistance Program.
On two items we know our two gubernatorial candidates agree. They are the need for tracking the use of tax incentives for their effectiveness and the imposition of no new taxes.
If state revenue projections in August turn out as dismal as predicted by some legislative leaders, we may need to have some very tough looks at tax credits, exemptions and deductions.
Current governors across the nation are busy trying to convince the White House and Congress to give another economic stimulus boost to the states. New Mexico already has $200 million of stimulus funds figured into its budget.
MON, 7-26-10
JAY MILLER, 3 La Tusa, Santa Fe, NM 87505
(ph) 982-2723, (fax) 984-0982, (e-mail) insidethecapitol@hotmail.com
I'll be at the Wild West History Assn Roundup in Ruidoso through Thursday.
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