NM lawmakers propose changing film, TV subsidies

New Mexico lawmakers working on proposal to sweeten tax incentive for TV production

Associated Press

SANTA FE, N.M. (AP) -- New Mexico lawmakers are working on a compromise proposal to sweeten a tax subsidy in hopes of drawing more television projects to the state.

A House committee on Monday postponed consideration of a film industry measure after a Democratic legislative leader said more time is needed to reach agreement with the Senate, Republican Gov. Susana Martinez and the entertainment industry.

"We want to send a unifying message to the industry that the state of New Mexico welcomes and wants the film industry here," House Majority Whip Antonio "Moe" Maestas, D-Albuquerque, told the Taxation and Revenue Committee.

He and other Democrats have proposed revamping the 25 percent tax refund that New Mexico offers for certain film and TV production expenses. His measure would boost the incentive by 5 percent for a TV series that produces at least six episodes in New Mexico.

Supporters say a successful TV series, such as the popular show "Breaking Bad" that's filmed in New Mexico, can provide a boost for the economy and stable jobs for local crew members.

"The TV shows add even more to our local economy because they stay longer," Maestas told the committee.

The award-winning AMC TV series "Breaking Bad" is set in Albuquerque and is filming a fifth and final season. The show follows Walter White, played by Bryan Cranston, producing and selling methamphetamine with a former student.

Maestas said he hoped an agreement can be reached shortly to avoid the possibility of Democrats pushing through some changes only to see them vetoed by the GOP governor. Democrats hold majorities in the House and Senate.

"There is no point in getting a bill that is not going to be signed," he said.

His proposal will leave in place a $50 million limit on the tax subsidies provided by the state each year for all film and TV projects.

However, Maestas proposes to allow unused subsidies below the cap to be carried over to the next year. The governor supports that change, which in some years could provide more than $50 million in tax incentives.

A GOP senator is sponsoring separate legislation that would accelerate payment of the tax refunds in years when the total incentives are below the $50 million cap. Currently, the state pays the incentives over three years if a production company is to receive more than $5 million in rebates.

The Legislature and GOP governor agreed to the $50 million annual limit in 2011 after Martinez initially wanted to reduce the tax credit rate to 15 percent. The cap was enacted when New Mexico faced a budget squeeze and state officials wanted more control over the costs of the film incentives.

The state provided about $96 million in film and TV tax refunds in the 2011 budget year, as production companies rushed to meet a deadline before the $50 million limit took effect. The following year the state paid out about $9.5 million, and the New Mexico Film Offices estimates the incentives could reach about $45 million this year.

When the Legislature convened this year, some Democratic lawmakers initially wanted to try to eliminate the $50 million cap on film and TV incentives. However, they've dropped that and instead are working on a compromise.

Martinez opposes lifting the $50 million cap, saying it's needed to protect the state budget.

"The governor is encouraged that Democratic leaders have recognized that we need budget predictability in order to ensure that we protect core priorities like classroom spending and health care for those in need," Enrique Knell, a spokesman for the governor, said in a statement.

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Follow Barry Massey on Twitter at https://Twitter.com/bmasseyAP

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