January 23, 2012 Having Arnold Schwarzenegger in town is good for business, so an effort is underway to undo the damaging cap on film rebates put in place at last year's legislative session.
Rep. David Chavez said he is, as far as he knows, the only Republican in support of House Bill 85, which would undo the cap. Chavez represents Valencia County and said he saw the benefits of movie making there when Schwarzenegger showed up recently as part of a crew filming "Last Stand." (He plays a border-town sheriff trying to cut off a drug lord's escape to Mexico.)
"That's a blockbuster movie," Chavez said. "It's an economic boom to any area when film industry's there."
He's gotten calls from hotel owners who said movie productions bring surging occupancy, he said. Productions who come to New Mexico stay in hotels, eat at restaurants, rent local equipment, hire New Mexican technicians and production assistants and actors....
"I hear from lots of local people," Chavez said. "It's significant for an individual with a restaurant or some other business hurting right now because of the economy. We need this business here."
The state's incentive package is a rebate of 25 percent of the cost of New Mexico film production. Under the new cap, the total amount to be paid out annually is $50 million. After than, the rebates end.
Rep. Al Park introduced HB 85 after reading a report that said the rebate program paid back $100 million in gross receipts tax to film productions last fiscal year, while those productions brought $250 million of GRT into the state, for a net of $150 million.
"We wouldn't have had that money otherwise," Park said. Without the subsidy, film production "is going to go away someplace else, and we won't have the jobs it brings."
Jobs like carpentry. Park said he has a close friend who works as a carpenter in Rio Rancho, and was struggling to make ends meet before movie productions kicked up.
"He started working on sets, and it was steady, good-paying work," Park said. "This guy pays his taxes, sends his kids to school. He's not rich or anything like that, he's just the kind of person we should be looking out for."
Gov. Susana Martinez championed the cap last year and has stuck with the same lines in its defense: The cap provides "predictability" in state government, and means state funds can be spent on more important concerns like public schooling and medicare.
Park noted that there is no cap on other subsidies, like oil and gas (nor would he want one). And, again, the tax revenue generated by film productions is greater than what the state pays out.
Once the state gets close to the $50 million cap, productions will be wary of filming here because they won't know if they'll fall under the subsidy program or not, Park said.
And "god forbid," Park said, another bill (HB 117) introduced this year by Rep. Dennis Kintigh find its way to passage. Kintigh, a Republican representing Roswell, is seeking to eliminate the subsidy program completely.
Park, who represents Albuquerque, said he isn't planning to run for the House again, so killing the cap on film rebates "is my hallmark bill." He's hoping it can survive the session, though his work is cut out for him without the governor's support.
In a conversation with ISPAC, Park repeatedly stated a particularly catchy buzzword this political season.
"This bill is about jobs," he said. "Jobs. Jobs. Jobs. This is a billion-dollar industry in New Mexico, and we neutered it last year."