By Rep. Dennis Kintigh
At one point during this past legislative session a flood of e-mails, phone calls and office visits deluged the state capitol, begging, pleading, and on rare occasions demanding that a particular piece of legislation be stopped.
We were warned that, should this particular bill be allowed to become law, the effect would be catastrophic for New Mexico.
I am not referring to a sweeping piece of social legislation such as domestic partner benefits, the Freedom of Choice Act or the death penalty repeal. Rather, the bill that produced this tsunami of reaction was a revenue bill — my revenue bill. House Bill 725 would have repealed the film production expense rebate.
Although the bill was tabled in the first committee, some individuals (including a recent columnist) continue to demand this subsidy must not be questioned, criticized or touched. Any who take an opposing view are to be mocked and vilified.
Currently the State of New Mexico pays film production companies for certain activities. The most prominent part of the existing law is a 25-percent rebate from the state for all qualified direct production expenditures. In 2003, this program cost $1.1 million. By 2008 the cost had increased to $47 million, and it is expected to grow to $54 million in 2010.
While it is obvious that certain individuals and companies have profited handsomely from these subsidies, the issue before this state Legislature and this administration is how to be good stewards of a dwindling supply of increasingly harder-to-produce tax dollars — dollars squeezed from a shrinking workforce.
Widely differing studies
The two studies of the New Mexico Film Subsidy Program have produced widely differing conclusions.
One study claims the return to taxpayers is $1.50 for every tax dollar paid out. The other study identifies the return to be only 14.5 cents on the dollar.
There have been additional studies of the effectiveness of these subsidies in Louisiana and California. The Louisiana study puts the return at 16-18 cents on the dollar.
Much attention has been paid to the fact that California, in the middle of a budget crisis, has adopted new incentives to woo back film production. However, little has been said about the report from the California Legislative Analyst’s Office. The California Legislature was advised to “reject the film tax credit.” That advice was ignored.
The recently adopted New Mexico state budget shifts an increased burden onto our public workers. These workers will now have their pay reduced by 1.5 percent to save the state $40 million. In addition, the budget calls for dipping into the state’s savings to the tune of $136 million.
How can this administration call on sacrifices and savings depletion while at the same time giving away $54 million to one protected industry? How do we face the struggling small businessman, the laid-off factory worker or the state policeman and say that he or she must sacrifice, but this program cannot be questioned?
Details are hidden in secrecy
Obviously there are different perspectives on this issue. One of the studies mentioned above shows a return 10 times greater than the other. Which is correct?
I believe the answer can be found in closely reviewing the details of this program, which are now hidden in secrecy. Exactly who is getting these tax dollars? What exactly have they done to justify getting your tax money? What is the actual benefit to the taxpayers of New Mexico?
This is a serious public policy problem that must be examined and resolved. Hurling verbal abuse at those who express concern or think this is a grave problem does not do that.
In my prior job with law enforcement, answers to questions like these were called “evidence,” and evidence is much more helpful in public debates than witty comments or vindictive insults.
Let’s have an open and public examination with a sober and serious discussion. I believe that is what the public deserves, and I believe that is how effective public policy is made.
Kintigh is a Republican House member from Roswell.