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During the recently completed legislative session, one of the issues that bubbled below the surface was the state’s generous subsidy programs that are designed to attract moviemakers to set up shop in New Mexico.
New Mexico’s film subsidies – the primary components of which are a 25 percent subsidy for film producers doing business in New Mexico and up to $15 million in interest-free loans – have resulted in some big-budget films being made in the state.
But the program costs taxpayers approximately $60 million annually.
A Rio Grande Foundation investigation has found that the economic studies used to justify the program are based on assumptions that could be described as shaky at best.
The study, which was done by the consulting firm Ernst & Young, concluded that the film program returns an astounding $1.50 to the state for every dollar spent by taxpayers.
Unfortunately, the Ernst & Young study seems to have been based on assumptions that would make the film subsidy program far more economically-sensible than it really is.
Instead of looking at payroll data, Ernst & Young utilized information collected from on-line and telephone surveys of the film industry – surveys coincidentally commissioned by a defensive Film Office.
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