3-4 Not Just Sending Rich Into Space

By JAY MILLER
Syndicated Columnist
SANTA FE -- New Mexico's spaceport was not conceived as an operation to take rich people into space.
The Las Cruces community and New Mexico State University began working over 20 years ago to create a commercial spaceport that would take advantage of the area's many benefits.
Those advantages included good weather, high elevation, clear airspace, a strong NMSU science department and the proximity to White Sands Missile Range.
The purpose of building a spaceport was to get a jump on the rest of the nation and world in building a commercial space industry that would bring business and jobs to the area.
NMSU's Garrey Carruthers was governor at the time. He supported the idea enthusiastically. Gov. Bruce King followed him and also backed the effort.
Then came Gov. Gary Johnson who let the idea wither, partly because the commercial space industry was not moving as fast as had been expected.
When Gov. Bill Richardson took over in 2003, he was enchanted with the idea. He began by getting a $132 million appropriation to build a spaceport. Later that year, he talked Dr. Peter Diamandis, founder of the X Prize foundation, to base his competitions at the spaceport as soon as it was built.
The first big X Prize competition was a $10 million award to the first company that could fly to the edge of space twice within two weeks. Burt Rutan and Paul Allen's Scaled Composites company won that contest with Spaceship One, flying out of Edwards Air Force Base in California..
Quickly, Sir Richard Branson's Virgin Galactic signed a contract with Scaled Composites to build Spaceship Two to fly several passengers at a time into space for $200,000 apiece.
And just as quickly, Gov. Richardson started working on Branson to base Virgin Galactic out of our spaceport. Branson agreed and made a grand announcement, along with Richardson and film star Victoria Principal, who plunked down her $200,000 for a seat on the first flight.
But Branson wouldn't sign a contract to be the anchor tenant until Dona Ana County voters approved a quarter-cent sales tax to help support the spaceport. Branson wanted to be as sure as possible, considering New Mexico's political vagaries, that we'd carry out our end of the deal.
On Dec. 31, 2008, Branson signed a 20-year lease. He may not be too happy he did it now that this governor is saying she wants private money to finish the spaceport.
That sounds like a kiss of death What company is going to sink its money into an unproven spaceport? Private money doesn't finance commercial airports. Airlines pay money to lease space but they don't own the airports. So why should we expect private investment in a spaceport?
Any aerospace company, including Virgin Galactic, is putting its money into getting its rockets off the ground. The amount Martinez wants might be pocket change to Branson but he didn't become a billionaire by making investments he doesn't have to make.
At least five other states have spaceport licenses and would love to lure Branson their way. And Branson isn't limited to the United States. He's based in London and is closer to European countries and the United Arab Emirates that are very much in the ballgame.
Just as the discouraging film industry news out of New Mexico is going global, so is the spaceport news. A lengthy Feb. 23 New York Times article spells out our new governor's disinterest in spending the little bit of extra money necessary to finish off the Spaceport America facility.
Gov. Martinez says she wants to encourage business in New Mexico by easing the regulatory climate on them. But the spaceport and film industry are two major, clean industries that she appears to be chasing away for some reason.
The spaceport has several other tenants, some of which are currently conducting test firings of the type originally envisioned. But they are small potatoes compared to Virgin Galactic. We're fortunate for the publicity boost this lucky find gave us.
FRI, 3-4-11

JAY MILLER, 3 La Tusa, Santa Fe, NM 87505
(ph) 982-2723, (fax) 984-0982, (e-mail) insidethecapitol@hotmail.com

 

Fw: 3-2 No End In Sight For Session

WED, 3-2-11

SANTA FE - This year marks the latest the New Mexico House has gotten the big budget bill to the Senate in a long time. Many years ago, the major battles during legislative sessions were between the House and Senate.
The House would wait until the final days of a session to send the appropriation bill to the Senate in order to give solons little time to make any changes. But senators found a way around the situation. They began holding their own hearings on agency budgets beginning early in the session and sometimes wrote their own bills.
Eventually lawmakers decided that fighting among themselves was counterproductive and only strengthened the governor's position when he got out his veto pen after the session ended.
There is a law that says the governor has only three days to act on a bill received more than three days before the end of a legislative session. So if lawmakers get an appropriation bill passed in time, they have the opportunity to override any vetoes a governor might make.
So a timetable was established two or three decades ago calling for the House to get the appropriation bill to the Senate by mid-session and for the Senate to get the bill to the governor several days before the session's end.
This year it didn't work. As mentioned often in this column, the two branches of government are still feeling each other out. The biggest barrier has been the film industry expense rebate. The House didn't lower it from 25 percent to 15 percent as Gov. Susana Martinez proposed.
House leaders and the governor finally worked out a compromise the governor said she would consider but final agreement on that subject still is far away. House members and the governor still are shaky and the Senate has yet to render its opinion on the film rebate.
The plain truth is that adoption and signing of a budget are nowhere in sight. Special session talk is floating around the Legislature already. Senators, who all are in the middle of their four-year terms, are the most predictable.
But the new House Republicans, elected in large numbers last November, are a huge unknown - even to House Republican leader Tom Taylor. And what Gov. Martinez will do with the budget bill also is a mystery.
One lawyer lobbyist recently observed that Martinez still is thinking like a district attorney. She has all the facts. She knows she's right. And nothing is going to change her mind. Compromise is out of the question. Acting tough is the way to win.
Martinez also is being watched by Republican bigwigs in Washington, who have sent people to the state to help her out. All new Republican governors are being counseled from Washington and from all indications, Martinez wants to stand out.
On the issue of film rebates, I am told executives from the top Hollywood studios have been to New Mexico on more than one occasion to talk with the governor and work out solutions that will benefit everyone. But they are shunted off to staff people and nothing is accomplished.
According to film industry representatives, it isn't about the money because they have proposed ways to work that out. It's about politics. Could it be that Hollywood is too closely aligned with Democrats? Or was it too close to former Gov. Bill Richardson?
Richardson did schmooze Hollywood but he isn't the governor who brought them here. That was Republican Gov. Dave Cargo, who established the nation's first state film office and film commission. He also appeared in several movies shot in New Mexico. And it was under tight-fisted Republican Gov. Gary Johnson that the film rebates began.
How will this all shake out? Will it get more exciting? And what about the price of gasoline? The last time gas approached $4 a gallon, the state was rolling in money from the oil industry? Could that help the budget standoff?

 

 

From: Jay Miller

Sent: Sunday, February 27, 2011 4:11 PM

To: Bloomer Nat ; danielrussell@hobbsnews.com ; Dickson Todd ; editor@roswell-record.com ; Gallagher Tauna ; Hammond Ruth ; Mauritson Martha ; Poertner Andrew ; sflanagan@plateautel.net ; Stinnett Scot ; Waters Bill ; editor@rrobserver.com

Subject: 3-2 No End In Sight For Session

 

 

2-23 No State Govt Restructuring?

WED, 2-23-11

SANTA FE - It doesn't appear as though the restructuring of state government is going to be a go. It doesn't save much money and there is no departmental cooperation with the effort.
A changeover in administrations seems like the perfect time for reorganizing. Cabinet secretaries could be hired with the stipulation that they cooperate. But that evidently was not done.
The reorganization bill passed during last year's legislature required the cooperation of every cabinet secretary. But if ever a legislative mandate were completely ignored, this was it.
All departments were asked to meet with legislative staff to provide suggestions about how they could operate more efficiently. Instead, the meetings resulted in existing departments justifying why operating in exactly the same manner was ideal.
Both Susana Martinez and her general election opponent, Lt. Gov. Diane Denish, supported restructuring of state government and presented some ideas of their own. Since the election, little has been heard from Martinez on the subject. She has proceeded to appoint secretaries for every department.
That means two things. Lawmakers are going to meet with just as much resistance from the new group of cabinet secretaries. And no cabinet secretary brought in from the other side of the country is likely to go along with a demotion a few months into the job.
Every department has its own problems. The Cultural Affairs Department and Tourism Department were favorite dumping grounds for Gov. Bill Richardson to unload political employees. Maybe he figured those jobs were pretty easy. Most anyone can give tours at a museum or stand behind a desk at a trade show.
But the jobs are much more than that. The science of preserving documents and artifacts, while still displaying them for the public requires tremendous competency. Gov. Martinez wants to combine the two.
But she has already hired secretaries for both departments. The new secretaries appeared at a legislative committee meeting recently at which they acknowledged they work well together but saw no reason to combine the two departments.
The Legislature would like to move the Tourism Department into the Economic Development Department. Judging from their performances over the years, it would seem moving economic development under tourism would be a better idea.
New Mexico is a leader in tourism but not economic development. One reason is that the Economic Development Department puts little emphasis on further developing New Mexico businesses that already are here.
So restructuring does not appear to be a solution to New Mexico's financial needs despite considerable effort that has been put into it. Salary cuts have been a solution Gov. Martinez has been willing to impose. The only salaries she can directly affect are those of her political appointees.
She has been willing to do that both by capping cabinet secretaries at $125,000 and cutting back on the number of political appointees. That will help but she must go further. Her enthusiasm for that seemed to wane when she was asked if she was going to cut her own salary.
Salaries of employees covered by the personal system are harder to get at because of laws passed to make it harder to punish employees out of political favor. Not filling vacant positions has been a favorite solution since our fiscal difficulties commenced.
That works only to a certain extent Some employees are crucial to the operation of state government and must be replaced even if it makes some GOP leaders angry that the law is being "flouted."
Further action may be attempted to eliminate double dippers but some exceptions are necessary there too, usually in small communities where it is difficult to find a city engineer or a calculus teacher.
When we finally get through this financial jam, it appears we may not have had to take some of the extreme measures of other states. We just heard of one state where a museum had to start selling some of its treasures.

newsp

2-21 Below the Surface

MON, 2-21-11

SANTA FE - What happened? On opening day of the Legislature, I predicted a stormy session. Republicans are taking over the executive branch from Democrats. And legislative numbers, although controlled by Democrats, are nearly equal for a change.
House Speaker Ben Lujan, a Democrat, narrowly retained his post but the House Republican leader, Rep. Tom Taylor, said that was only because it would make Democrats easier to beat next year - or something like that.
It sounded rather reasonable the way things go around here. But Republicans, including Taylor, immediately started backtracking. Rep. Taylor was misquoted, misunderstood, misinterpreted or whatever.
Anyway, the fireworks never exploded. We know we have a bunch of new people in the executive and legislative branches of government who don't agree with each other. So far, they're not being disagreeable. But maybe they're being surreptitious.
Maybe all those unnecessary regulations that are so anti-business are being quietly rescinded - or ignored. Maybe hot button social issues that new Republicans would like to fight about are being throttled by Republican or Democrat leaders.
Whatever it is, it hasn't been particularly interesting to those of us covering it. Blogger Joe Monahan describes it as a baked potato with nothing on it. I've compared it to two heavyweights feeling each other out.
At least my analogy allows for a final round in which fists fly. But maybe it won't Maybe it is all happening under the surface. But we were promised open government. Where did it go?
I understand that over a week before this was written Gene Moser, the new director of the State Personnel Office was hired - but not announced. And a week later assistant director Nivea Thames became assistant director without announcement.
The Personnel Office is not a cabinet level department so that may be why the appointments were not announced. Personnel offices usually are a thorn in the side of any administration because they have rules about eployee qualifications that prevent employers from hiring anyone they want.
Personnel offices also have rules about procedures that have to be followed before people are fired. You will recall that the Administrative Office of District Attorneys was the agency that allowed problem employees about to retire up to a year of paid leave because it was easier than following the firing process. When the word got around, other employees about to retire started taking advantage of the situation.
There also seems to be a way personnel offices can waive rules on hirings and firings. Legislators have been known to want to reorganize the personnel office so it can't be a tool of the governor to ignore rules.
Transition Team head Heather Wilson evidently had some rather negative feelings about the personnel office back when she was secretary of the Department of Children, Youth and Families.
As an April fool's joke, her communications director wrote a fake press release announcing that Wilson had taken over the government and her first action was to bomb the Personnel Office. It got leaked to the press and the guy got fired.
So what could be happening with the State Personnel Office at this point? The State Personnel Board has all been dismissed and no board has been announced to replace it. If there is any action from these years Legislature, it could involve a transfer of authority over the State Personnel Office.
Gov. Bill Richardson did his own hiring and firing of political appointees through the Department of Finance and Administration. Will that change? At one time, before financial difficulties hit, Gov. Richardson had over 500 political appointees.
Legislation has been introduced to reduce that ceiling but Gov. Susana Martinez has low-balled that with an announcement of a 350 maximum. Even at 350, that is quite a lot of people. Martinez's statements during her gubernatorial campaign indicated she was going to cut quite a few more.

 

Does Spaceport Have a Chance?

WED, 2-18-11

Spaceport America may end up being the most important item this Legislature considers. Yes, everyone said his session would be about New Mexico's economy and jobs, jobs, jobs. But that's what they say every year.
Evidently no one realized that new Gov. Susana Martinez would see little or no merit in what is going on out there. Yes, it has been a major Las Cruces and New Mexico State University promotion for some 20 years. But maybe all of that went over her head. She was busy fighting drug cartels. Someone should have told her.
Seldom has New Mexico ever had the opportunity to get onto the ground floor of any major industry. We came close with the personal computer industry when Bill Gates and Bob Allen started Microsoft in Albuquerque because that's where things were happening.
But no one had the ability to realize that potential, otherwise any of us would have been willing to pull together the $35,000 they needed at the time. Later we also realized they needed a much bigger talent pool than we have in New Mexico.
This time, we've made the investment - almost $200 million in a runway, a terminal and hangars. The runway is completed and has seen the arrival of Spaceship 2, with hundreds of celebrities present. The terminal and hangars will be ready later this year.
Part of the mill levies passed by Dona Ana and Sierra counties will go toward math and science education. Meanwhile, competitions are being held for students to send experiments into space.
New Mexico now has the basics for that electronic talent pool Gates and Allen needed when they were here in the 1960s. Santa Fe's cluster of small electronic industries has been written up in high-technology magazines.
Needed now is someone in the state Economic Development Department foresighted enough to organize such people throughout the state and help develop them into a miniature Silicon Valley by providing the resources they need instead of spending that money on entertaining business moguls.
So our basics are in place. But will this be another signature Bill Richardson initiative that Martinez will deep six or delay so she can put her stamp on it?
Sir Richard Branson of Virgin Galactic, slated to be the spaceport's biggest tenant, surprised many of us recently by announcing plans for a major hotel at the spaceport. It was billed as Branson's first announcement of the hotel. It wasn't, but the surprise factor still was significant.
Richardson and Branson had developed a fast friendship but relations with Gov. Martinez had appeared nonexistent. My gut feeling was that we soon would see an announcement from Branson that he is being heavily courted to base his trips to the edge of space in the United Arab Emirates, Finland or some other suitor.
This development is very encouraging. We may stay on track. In October, Branson brought 60 of his travel agents from throughout the world to Southern New Mexico to see the spaceport and to explore the tourist attractions in surrounding counties. Branson figured that every person paying $200,000 for a space flight will bring along six or more family members to share the experience.
This will give the families something to do while familiarizing the travel agents with attractions they can recommend to other clients.
Other activities also are occurring at the spaceport. The 2010 Legislature passed a measure limiting liability for launch operators. UP Aerospace sent high school and college experiments into near space last May.
In August, the Federal Aeronautics Administration made New Mexico State University the hub of a national research coalition to address challenges of the commercial space industry. And in September, Congress directed NASA to help develop the commercial space industry while it concentrates on deep space exploration.
Original projections were that the spaceship would be ready to fly over a year ahead of spaceport completion. But the spaceport has stayed closer to its timetable. It should be ready to go for the first spaceship ride if the current administration doesn't slow it down too much.

 

2-16 NM Political Dynasties

 

 

2-14 Battleship NM Honored

MON, 2-14-11

SANTA FE - Not many landlocked states get to see a Navy exhibit but New Mexico is one of them as the state's history museum in Santa Fe honors the World War I and II battleship USS New Mexico as well as its newly commissioned namesake, a nuclear submarine that is the most powerful warship ever built.
New Mexico can be very proud of its two warships. The battleship New Mexico was ready just in tie for our entry into World War I. It is a tradition to name battleships after states and New Mexico and Arizona had both just become states as our nation saw itself slowly being dragged into World War I.
The first USS New Mexico was the first of its class of battleship to be built so subsequent battleships were called New Mexico-class. After World War I, the USSNM became the flagship for the Pacific Fleet during the 1920s. The designation turned out to be appropriate since New Mexicans distinguished themselves in the Pacific as defenders of Bataan and as Navajo code talkers throughout the Pacific.
The USS New Mexico made a quick appearance in the Atlantic in 1941 when German ships threatened shipping from our Eastern seaboard And that is how the New Mexico missed being at Pearl Harbor on Dec. 7, 1941.
The USS New Mexico soon was back in the Pacific, fighting in the Gilberts, the Marshalls, the Solomons and the Marianas. It finished the war as one of our nation's most battered battleships, having taken hits from kamikazes, bombs and suicide boats. But after repairs, it kept on fighting.
It was n its way for the invasion of Japan when the war ended. In recognition of its valor, the USS New Mexico was among the ships invited to Tokyo Bay to witness Japan's surrender. A touching picture of our battleship, with Mount Fujiyama in the background is on display at the New Mexico History Museum through May 9.
Also on display will be a 56-piece silver service commissioned from Tiffany by New Mexico's 3rd Legislature for $10,000. The set includes a cigar humidor in the shape of Taos Pueblo, along with 24 silver plates engraved with scenes ranging from Coronado to the territorial period.
Also on display are many relics of our battleship, along with a television documentary telling the old ship's dramatic story.
It is tradition inn the Navy to name war ships after previous ships that have served with honor and that the new ships carry items from their ancestral ship. Thus some of the silver collection and other items will be donated to the New Mexico nuclear submarine.
The new USS New Mexico will join the U.s. Navy's operational fleet in January 2012. Its homeport will be Gorton, Conn. It is likely to be stationed somewhere near the Middle East.
It isn't easy to get a second major ship named after a state. It took years of work by New Mexico's congressional delegation along with outstanding efforts by New Mexicans headed by Dick Brown of Albuquerque.
The captain of the USS New Mexico will be George Perez. During construction of the nuclear sub, New Mexico native Commander Robert Darin was in charge of the ship. Dain was born in Shiprock, where his father was a doctor. Later Dain lived in Tijeras and Cedar Crest. He graduated from Albuquerque St. Pius High School in 1982.
It isn't common for many of the crew to be from the state for which a ship is named. Dain was a happy exception. The crest of the ship also was designed by a New Mexico high school student.
New Mexico can be proud of the work done by New Mexicans to get our name on this new ship. Don't miss your chance to learn more about it at the New Mexico Museum of History, 113 Lincoln Ave., in Santa Fe.

 

Former Gov. Cargo May 'Donate Bust

FRI, 2-11-11

SANTA FE - Former Gov. Dave Cargo may soon be memorialized with a bust somewhere in the capitol. This isn't a bust for which taxpayers will have to foot the bill. This one was sculpted 44 years ago, early in Cargo's administration.
According to Senate Bill 70, our former governor wants to give it to the state. That's a switch for Lonesome Dave, who always has been known for being tight with a buck, both his bucks and taxpayers' money.
When Cargo ended his term in 1970, he is said to have cleaned out both his office and the Governor's Mansion. Bruce King, who followed Cargo as governor is quoted as saying all Cargo left was "that woodpecker over on the desk." At least it means he left the desk too.
But he did take an antique piano, which became a bone of contention. It turned up in someone's home in Northern New Mexico and eventually was donated back to the state, where it sat in the governors' reception area for several years during a subsequent administration.
The piano may have been in the Governor's Mansion while Cargo was governor. I was never in the mansion during Cargo's term. And I've never heard anyone else mention having been in the residence during that period.
When Cargo threw a party, it usually was a spur of the moment affair after some political event. Cargo would hit up one of the liquor lobbyists for some beer and everyone would go around the house into the back yard for a little party.
Cargo was well known as a low budget campaigner. During his first campaign, he traveled the state alone in a beat up Volkswagen, painting his name on every roadside rock he could find. He never bought an ad, saying "Why pay for the back page when you can get the front page free."
Cargo knew how to get on the front page. His biting quips always carried a strong message and the media loved him for it. When he ran for reelection two years later, Cargo got a few good sized donations, which caused him to observe: "I have $56,000 to spend this time and I'm afraid I won't know what to do with it.
Cargo also prided himself on a small staff.He had only one state policeman, Red Pack, who mainly served as his chauffeur. Cargo says he enjoyed doing most of the driving while Pack slept in the back.
Our former governor even tells the story of being asked to speak in Southern Colorado. On the way up, Cargo told Pack no one up there had ever seen or heard him so he talked Pack into delivering his speech since he had heard it so many times.
Pack did reasonably well until it came to question and answer time. Someone asked Pack a question he couldn't answer so he said, "That question's so easy, I'm going to ask my chauffeur in the back of the room to anser it. You have often seen me refer to Dave Clary, a reader from Roswell, who also is a very successful writer.for national publishers. Twelve years ago Cargo spoke at the legislative prayer breakfast. Cargo is what one might call well read. Among other accomplishments, he claims to have read all 54 volumes of Vladimir Lenin
Wanting to show off his vast vocabulary, Cargo observed "Sometimes a Sabbatarial zeal can lead us into a moral Coventry and a Tractarian disaster." Obviously, no one in the news business could make heads or tails out of that statement.
So I appealed to my erudite readers for help. I received numerous entries and passed them on to Gov. Cargo for grading. Clary was the winner - hands down.
Both gentlemen have written books recently, using words the rest of us can understand. I commend them both for your consideration. Cargo's book is called "Lonesome Dave." Clary's book is "Washington" First War."

 

former

gov.

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2-9 Little May Happen During Entire Session

By JAY MILLER
Syndicated Columnist
SANTA FE -- Little may happen this legislative session. It reminds me of two heavyweights feeling each other out in the first round of a boxing match.
Since Gov. Susana Martinez is new to the game and since she is new to nearly all legislators, it takes awhile to get a feel for each other. We saw much the same situation during former Gov. Gary Johnson's first year.
The difference with Johnson was that he hadn't promised a bold agenda -- just limited government. So there weren't expectations of much happening. That didn't come until 20 days after the session adjourned when Johnson set the first of many veto records.
Martinez has promised bold change but she is having to get organized first. Her cabinet appointments essentially are complete now. But it will take awhile to get everyone on the right page and, of course, they all have to be confirmed.
The confirmation process should go fairly quickly. Governors should be allowed to put together the team they think will work best. But there always are one or two who become controversial.
The time schedule of legislative sessions is unfortunate for new governors. At the longer, 60-day sessions any topic is germane. In next year's 30-day session budget-related items are the only topics that automatically are germane.
Governors always can declare other items germane but if they add too many items, lawmakers run out of time to consider everything in just one month. So it will be 2013 before Gov. Martinez is fully prepared for a long session. And then her first term ends the following year.
The situation was very different with former Gov. Bill Richardson. He took office fully prepared. He had his cabinet appointed quickly and on the first day of the session his bold initiatives were being introduced.
Richardson led off with a tax cut and, if memory serves correctly, had it passed by this time in that 2003 session. The cut endeared him to Republicans all the way up to Rush Limbaugh. And Richardson's honeymoon got a big boost.
The tax cut was followed quickly by the Rail Runner, Spaceport America, Hollywood, Eclipse airplanes and solar start up projects. It was an amazing session and there were high hopes that our economy would take off like those in neighboring states such as Arizona, Colorado and Nevada.
But eight years later little seems to have changed. During his presidential campaign, Gov. Richardson touted the exciting initiatives he had started here. But the millionaires and the industries didn't follow.
The Rail Runner was finished in record time but it has been a money drain, not a spigot. Eclipse folded, we have a little solar and the Spaceport still is a question mark. Hollywood has been the most successful venture but our new governor is going after it.
Money for education was given a boost but few results are apparent. Gov. Martinez has raised some hopes for school improvement, with a new approach promised, but that will be slow.
We may be wise to hope that Martinez's bold changes come more slowly than Richardson's, affording us an opportunity to look at them and judge based on past experience --and cost.
Much of Martinez's activity thus far has been in the arena of law enforcement, which is her one area of experience. She has been traveling the state quite a bit. One report says she was in Roswell three times in January.
Since she has ditched the airplane, those trips appear to be taking a full day of her time. She has slightly downsized her SUV from the one Richardson had. But she says this one has a desk. So evidently Martinez works and studies during her trips. She's probably also tutored. And she surely has the necessary equipment to communicate with whomever she wants. And she is able to avoid all those with whom she doesn't want to communicate.
WED, 2-9-11

JAY MILLER, 3 La Tusa, Santa Fe, NM 87505
(ph) 982-2723, (fax) 984-0982, (e-mail) insidethecapitol@hotmail.com

I'll be out of the office until Feb. 19. Will have computer with me and cell phone 505-699-9982.

2-7 Film Industry Survives First Test

By JAY MILLER
Syndicated Columnist
SANTA FE -- The film industry cleared its first hurdle recently when it succeeded in getting Rep. Dennis Kintigh's bill to wipe out the rebate film companies receive for doing business in New Mexico.
The vote was along party lines with Democrats winning 5-4 in a House committee meeting held before a packed audience.
The next hurdle will be higher. Gov. Susana Martinez wants to lower the film rebate amount from 25 percent to 15 percent.
Industry insiders predict they won't have the luxury of going after a free-standing bill from Martinez. They think her effort will be tucked away in the general appropriations bill.
Insiders also believe their support will not be along straight party lines. A number of Albuquerque Republicans are well aware of the jobs and business film making brings to their districts. And many rural Democrats realize the industry doesn't help their area at all.
The urban-rural split is one of the problems faced by those supporting a big rebate to keep movie makers coming to New Mexico. Most of the action is in Albuquerque and Santa Fe where the labor pool is.
Companies that have ventured to smaller towns usually are greeted with open arms but occasionally neighbors complain that the activity disrupts their quiet lifestyle.
Some states have bumped up rebates for filming in rural areas. Michigan is reported to be willing to go as high as 42 percent.
The big question faced by the governor and legislators is how much is enough. We can be rather positive that lowering the rebate from 25 percent to 15 percent will lose some business.
But is even 15 percent a good deal for the state? Some studies say it isn't. Some states in even worse financial shape than New Mexico have dropped their rates or suspended their programs.
Why is it so hard to determine what is a good deal and what isn't? It's because the movie and television industry is so different from other businesses. It's a comparison between apples and oranges.
Most businesses come to town, put down stakes, hire permanent employees and pay taxes on their business profits. With film makers, it's hello and goodbye. And if we take out some of the sweetener, it's not even hello.
We know the film industry hires several thousand temporary workers, rents a great deal of equipment, buys a lot of supplies and fills up motels and restaurants. We give the companies back 25 percent of what they document they've spent.
That means they've put 75 percent, three times as much, into the state's economy we wouldn't have had otherwise. It helps the economy. But do the taxes these companies pay the state help or hurt our deficit situation?
We don't seem to know. What if discouraging Hollywood makes our deficit worse? My wife once had a commission job in which she sold much more than expected. She was told the budget item for commissions had run out. What do you think happened next?
The state must get better information. But not all the information seems to be available because of taxpayer confidentiality. Gov. Martinez doesn't agree the state should withhold the information so maybe we'll find out more. We need a definitive study.
Until then, Gov. Martinez says the money will come out of school budgets. The other side says New Mexico is closer than any other state to having a film industry big enough to be full time like Hollywood. Do we toss that chance away?
Officials from top Hollywood studios have recently visited quietly with Gov. Martinez in Santa Fe to explain the situation as they see it. There's no word yet on how that turned out.
Possibly a more serious problem is the money borrowed at no interest by film companies from the state's permanent fund. Wouldn't you think the state should receive at least a prime interest rate?
MON, 2-7-11

JAY MILLER, 3 La Tusa, Santa Fe, NM 87505
(ph) 982-2723, (fax) 984-0982, (e-mail) insidethecapitol@hotmail.com