Are film incentives paying off?

Studies look at economic impact of film tax credits

TV and film set
Lawmakers want to rework film tax incentives.

SANTA FE, N.M. (KRQE) – A pair of newly published studies claim states like New Mexico are wasting tax dollars, giving breaks to filmmakers but getting little in return.

New Mexico has been the backdrop for hundreds of blockbuster films, especially since offering a 25 to 30 percent refundable film production tax credit.

“For New Mexico, this has been the greatest job creation program since the Manhattan Project,” said Jon Hendry, business agent for a local film workers union.

However, last month and again a few weeks ago, University of Southern California studies were published, finding that film incentives had almost no impact on employment or wage growth.

One study points out, as more states enact an incentive program, it’s less of an advantage for other states, sparking bidding wars and over-investment.

Not New Mexico, according to Eric Witt, executive director of the Santa Fe Film Office.

He said New Mexico’s program is unique.

“Almost laser beam focus on using a New Mexico crew, hiring New Mexico vendors, using New Mexico production facilities and suppliers,” Witt said.

However, the study points specifically to New Mexico, saying while it generated 14-cents for every dollar of investment, the state actually increased spending.

“I read these studies. The USC one is complete nonsense,” Hendry said.

The 14-cent figure came from a 2008 New Mexico State University study, the next year Ernst & Young found it was more like $1.50 created for each dollar spent, while a report last year estimated it at 43 cents.

Still, Witt is confident the incentive program has put the film industry in the spotlight when it comes to the state’s economy.

“It’s one of the only bright spots in our economy,” Witt said.

The New Mexico Film Office said film and television production injected nearly $390 million into New Mexico’s economy last year. provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Users who violate these terms, including use of vulgar language or racial slurs, will be banned. Please be respectful of the opinions of others. If you see an inappropriate comment, please flag it for our moderators to review.

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