New Mexico raises cap on annual rebates for film industry
ALBUQUERQUE, N.M. (AP) — New Mexico politicians are banking on more film and television producers bringing their business to the state now that the pot of tax rebates that will be available each year is more than doubling.
Gov. Michelle Lujan Grisham visited Albuquerque Studios on Friday to sign the film incentive legislation, making good on a campaign promise to boost the annual rebate cap.
The state is increasing the cap from $50 million to $110 million. Other major provisions include one-time spending of up to $225 million to address a backlog of unpaid incentives. The backlog is projected to hit $382 million by the end of the year.
Incentives also will be sweeter for productions centered in rural New Mexico, and the state can authorize an additional $100 million in future production credits for work in earlier stages that may not be completed for another year.
Lujan Grisham said producers should know the state wants their creativity and their business. She also mentioned the ripple effect, where restaurants, hotels and other service industries can benefit.
“Bring your production here, keep it here, put New Mexicans to work,” she said.
Lujan Grisham, who took office in January, said the film industry should be a bedrock of the state’s efforts to diversify its economy, which is heavily dependent on the oil and gas industry and the federal government with its large swaths of public land, national laboratories and military bases.
New Mexico has long been on the map when it comes to successful movie and television productions, from the early Westerns decades ago to more recent series such as the Emmy-winning TV drama “Breaking Bad.”
Lujan Grisham’s predecessor, Republican Susana Martinez, had signed legislation in 2011 imposing the $50 million annual limit as a way to provide budget certainty and protect state finances while New Mexico struggled through an economic downturn. The state followed up in 2013 with the “Breaking Bad bill” to incentivize more television productions.
The battle among states to woo the movie business began decades ago, after Canada took advantage of currency exchange rates and government-sponsored tax breaks to lure production from California. Louisiana responded, becoming the first to adopt tax incentives in 1992.
After a surge in competition, things have waned, with some states cancelling their incentive programs and others paring back their offerings, according to the National Conference of State Legislatures.
Still, New Jersey revived its incentives last year. There are proposals pending in Texas and elsewhere to funnel money to such programs.
In New Mexico, it’s lining up to be another good year for the industry, which has drawn more in-state direct spending from film and TV productions each year since 2014, topping out at more than $500 million last fiscal year, according to the state film office.