From The New Mexico Legislative Finance Committee September 2023 Newsletter
The film production tax credit is New Mexico’s most expensive economic development incentive, with the cost expected to reach almost $275 million a year by FY28, but the film industry accounts for less than a half percent of New Mexico private employment, LFC economists report.
Film industry incentives were 37 percent of total state economic development spending in FY22, making New Mexico second in the nation in spending on film incentives as a portion of total general fund appropriations.
The film incentive has likely helped the state become nationally competitive for film locations, with New Mexico 14th highest for film industry employment levels and fourth highest in the share of jobs in the film industry.
However, film industry hiring in New Mexico has lagged film industry spending, with industry spending up 134 percent between FY08 and FY22 and jobs up just 3.3 percent.
Notably, LFC staff reports, tax expenditures supporting the film industry in FY22 were 27 times larger than tax expenditures supporting the research and development industry through the technology jobs and research and development tax credit, designed to support high-paying R&D employers outside the state’s national laboratories.
New Mexico’s R&D industry outside the national laboratories is two times bigger than the state’s film industry and average annual R&D industry wages are 21 percent higher than film industry wages, according to Bureau of Labor Statistics data.
The committee is scheduled to discuss the film incentive program at 10 a.m. September 27.