(The Center Square) – New Mexico is touting a film tax credit that costs the state $20,500 annually per full-time job as a success.
The New Mexico Film Office released an economic impact study that commends the state’s return on investment on its Film Production Tax Credit, according to a press release from the Office. The state claims that for every dollar “invested” into the film tax credit, it got $7.77 in economic benefit.
Here are some of the study’s findings:
Total Economic Output: The tax credit generated an estimated $3.8 billion in total economic output in New Mexico from FY2020 to FY2023. Total economic output includes direct, indirect, and induced impacts, which account for such things as uplift activity in the supply chain and induced effects from production wages.High-Paying Job Creation: The tax credit supported approximately 8,000 full-time equivalent jobs in the state. In FY2023, the median hourly wage for full-time New Mexico crew members was $35.51 per hour, whereas the median wage in NM for all industries was $19.19 per hour, and the New Mexico minimum wage as of 2022 is $12 per hour.Production Growth: The overall number of productions accessing the incentive grew from 78 in FY20 to 109 in FY22, and despite the strike interruptions, it still finished at 83 in FY23. Along with this production increase, the average New Mexico spend per project in FY20 was $3.8 million. By fiscal year 2023, it reached $9.7 million, indicative of larger, more robust productions choosing New Mexico as their location.
“This study provides clear evidence that the New Mexico Film Production Tax Credit is a valuable investment for our state,” Amber Dodson, director of the New Mexico Film Office, said. “The tax credit generates significant economic benefits. It supports 8,000 jobs, high wages, and expansive investment in our businesses and communities.”
During Fiscal Year 2023, the state spent $160.4 million on its film production tax credit.
The Film Office claims that the industry helps support small businesses outside of film because it brings people in from out-of-state, including hotels and restaurants, among others.
“The New Mexico Film tax credit has been enormously important in bringing a lot of jobs to small communities, and we believe that as long as the program continues, we will continue to grow job opportunities, not just for hotels and restaurants, but they are hiring hundreds of people in small communities,” New Mexico Entrepreneur Allan Affeldt said. “And it’s an exciting job. The net benefit to communities like Las Vegas is enormous.”
Part of why New Mexico has a growing film industry is because of the state’s landscape, in addition to the film tax credit incentives, a release.
However, the state also touts the flexibility of its film tax credit as an advantage, as it includes all aspects of filmmaking, not merely production spending.
“With a film incentive that strategically supports the hiring and development of local talent and crews and sourcing from local businesses, New Mexico has become a beacon for both aspiring and consummate filmmakers,” a release said. “It will continue to be a force to be reckoned with in the global film and television landscape.”
One can read the full study here.