This is considered an undisputedly good thing by those who either don’t look at the details or don’t have a rudimentary understanding of math.
For starters there is the 25% film “tax credit” which is really a rebate of 25% of the costs of production. They get another 5% since they are qualified production facility, so that means taxpayers will reimburse Netflix for 30% of their spending in NM which according to the article will be an additional $1 billion. Based on this, the company will cash checks from New Mexico taxpayers for up to $300 million annually (and that’s just on their production spend).
As if that were not enough the State is providing $17 million in LEDA incentives; the City of Albuquerque is providing another $7 million in LEDA, and they will also provide an industrial revenue bond to partially abate property and other taxes over a 20-year term for the first $500 million investment to build out the facility.
In total Netflix will receive $300 million + $17 million + $7 million + the IRB tax abatement to eliminate their property taxes.
Finally, even though N.M. has annual cap on film tax rebate expenditures, the legislation exempted companies that purchase or sign a 10-year lease for a qualified production facility. Meaning the cap does not apply to Netflix.
In other words, Netflix is definitely going to grow and appear to create more jobs in New Mexico, but it will come at a tremendous cost (not just in lost revenue, but in actually spending) to both State and local taxpayers. This is both unfair AND unsustainable. The notorious New Mexico outlaw and thief Billy the Kid would be jealous.
The following opinion piece by RGF president Paul Gessing appeared in the Las Cruces Sun News on November 22, 2020
Recently, both the Santa Fe and Rio Rancho school districts joined Albuquerque and Las Cruces schools in abandoning any in-person learning. Instead, for the foreseeable future all learning in New Mexico’s largest school districts will be done online. The odds seem very good that this situation will continue into 2021 and possibly through the end of the school year.
Oddly, while Gov. Michelle Lujan Grisham constantly tells us that her anti-COVID efforts are based “on the science,” leading health bodies like the CDC have recommended in-person learning. And, as a Nov. 16 email distributed nationally from the New York Times put it:
“The one indoor activity that appears to present less risk is school, especially elementary school. Why? Young children seem to spread the virus less often than adults do. “Research has shown that if you put social-distancing protocols in place, school is actually quite a safe environment,” Andreas Schleicher, who studies schools for the Organisation for Economic Co-operation and Development in Paris, told NPR.
Closing schools and switching entirely to remote learning, on the other hand, has big social costs. Children are learning less, and many parents, mostly mothers, have dropped out of the labor force. The U.S. is suffering from both of these problems and from a raging pandemic.
The upshot is that increasing numbers of parents have few choices when it comes to educating their children. That is, unless they can pay for and get their child enrolled in one of the religious or private schools around New Mexico that have been providing in-person learning throughout the school year (despite arbitrary occupancy restrictions imposed by the governor).
The governor and the union-dominated political power structure of the state has been implacably opposed to helping parents and families as they face dire challenges in educating their children thanks to the pandemic and the shutdown of in-person teaching. Earlier this year New Mexico sued the Trump Administration to stop any CARES Act funding from being directed to non-public schools, other states (including two of New Mexico’s neighbors) have found creative ways to directly help families impacted by the shutdown of in-person learning in many school districts.
Oklahoma is providing $30 million from the CARES Act to support families impacted by the virus-induced shutdowns. “These programs will allow for students and families of diverse backgrounds to access the quality resources they need in order to continue their education journey amid the COVID-19 pandemic,” said Gov. Stitt.
Idaho has created a $50 million program using CARES Act dollars to spent on eligible educational materials, devices and services. Parents can apply for benefits totaling $1,500 per eligible student and a maximum award of $3,500 per family.
Texas used $30 million to help special needs students whose families have been forced to deal with a difficult situation in the pandemic. Families of some students with disabilities may be eligible for $1,500 per child in aid to use toward services including tutoring, therapy and digital resources.
But, here in New Mexico the options most children are really limited.
Students, often young ones without typing and computer skills engaged in virtual learning, sometimes without great Internet access;
Spending scarce resources in these difficult times on private schools while continuing to pay taxes for government schools;
Or, withdrawing students completely from government schools and having one or more parent or family member dedicated to educating children at home.
These are not great options for many New Mexico families. Returning to in-person learning is undoubtedly the best available option. It would also be great if New Mexico came up with something similar to what is happened in neighboring states at least as a start to helping families deal with the consequences of the ever-shifting educational playing field. Alas, New Mexico didn’t get to 50th in education by making good decisions.
Paul J. Gessing is president of New Mexico’s Rio Grande Foundation.
Gov. Lujan Grisham’s COVID restriction policies officially “jumped the shark” this week when the combined effects of her 25% occupancy mandate (or 75 people including staff (a tiny number for a big-box store) conflicted with her edict that allows the New Mexico Department of Health to close workplaces down for two weeks if they have four or more COVID-19 rapid responses in a 14-day period. (see photos below).
While the four Rapid Response concept has some merit, the reality is that larger workforces (like big box stores) are going to have more cases than smaller ones and several of them have indeed been shut down.
Worsening the situation is the Gov.’s “let them eat cake”mentality expressed by her spokesperson by claiming that the grocery store lines were “a Republican talking point.”
As bad as this is for the urban denizens of Albuquerque or Santa Fe (particularly the elderly), imagine the challenge of living in a rural part of New Mexico where the nearest grocery store is a 45 minute or even a 90 minute drive away.
As an American I never thought I’d see people having to line up to wait in line for food. The capitalist system remains functional as food and other essentials are being produced, but the government’s COVID response is failing.
On this week’s interview show, Paul sits down with Grover Norquist, president and founder of Americans for Tax Reform. Grover is one of the most prominent voices for free markets and lower taxes in Washington.
The dust is still settling in the presidential election and there are two runoff elections underway in Georgia that could determine control of the US Senate. How did conservative issues and policies fare in the 2020 election? Grover and Paul go over ballot measures on everything from marijuana legalization to ride-sharing companies and racial preferences. Grover is optimistic both about the future of freedom and lower taxes around the nation.
Paul and Grover conclude the discussion by discussing how legislative control shifted at the state level and whether a prospective Biden Administration will tack leftward on various economic policies or whether there will be opportunities for Democrats and Republicans to work together over the next few years.
This tweet was posted on Thursday, November 19. The writer is New Mexico Speaker of the House Brian Egolf’s Chief of Staff. Of course, most major New Mexico school districts have shut down in-person learning and the rest are doing “hybrid” learning at best. Sports were shut down in New Mexico including golf and cross country.
As RGF responds, have YOU heard anything from Speaker Egolf about the way Gov. Lujan Grisham has handled the lockdown? Has he said New Mexico schools should reopen or that fall non-contact sports should be played? We haven’t heard whether the Speaker will support efforts to reign in the power of this or any governor to take such drastic action as we have seen during this crisis over many months and without legislative input.
Recently, New Mexico’s Educational Retirement Board (ERB) made the decision to divest itself from private prisons. Supporters of such a move have painted such companies in a very negative light with little justification.
Patrick Brenner, a policy analyst with the Rio Grande Foundation, submitted the following letter to the Albuquerque Journal. It was published on Monday, November 16, 2020.
I read the guest column, “ERB right to help dismantle unjust prison system,” published in the Albuquerque Journal on Nov. 8 and feel compelled to offer a response. The author is certainly entitled to her opinions about the New Mexico Educational Retirement Board’s decision to divest from private prisons, but she appears to be unclear on some of her facts.
The family separation mentioned in the column is a serious issue, but GEO does not manage any shelters or facilities housing unaccompanied minors, nor does it run any border patrol holding facilities along the U.S. southwest border.
What GEO does do is provide safe and humane residential care, including at the modern immigration Processing Centers it manages for the federal government that feature amenities such as artificial turf soccer fields, flat screen TVs in living areas, and indoor and outdoor recreation. These amenities are not usually available in government-operated facilities.
Unfortunately, the divestment campaign is based on an incorrect narrative and a mischaracterization of the role of GEO and other private contractors in this field who ultimately must answer to federal and state governments who are both their customers and regulate the terms of their contracts.
Overall, New Mexico ranks 42nd nationally in the Index which ranks US states on various measures including: “government spending,” taxes, regulations, and legal system/property rights. All of New Mexico’s neighbors are among the most economically-free states in the nation.
As can be seen in the chart below that, while people in the most economically-free half of jurisdictions have higher incomes than others, it is the least economically-free jurisdictions like New Mexico that really lag behind dramatically. It is not surprising that New Mexico is among the most impoverished states in the nation.
Twitter is a useful and frustrating tool. Bill Jordan who lobbies on behalf of one of the many liberal groups that lobbies the Legislature here in New Mexico recently posted the following. Now, we know that the rich don’t really pay less taxes than the poor in NM (we’ve had this discussion/argument with Bill numerous times). And, New Mexico corporations also pay millions of dollars in corporate income taxes as well as other taxes to the State of NM (much of which is used for education).
You can see the corporate tax data on page A-2.1 of the Gov.’s budget which shows that the State collected an estimated $133 million for FY 22.
But, Bill DOES have a point. A line item called “refundable” CIT credits vastly reduces the corporate tax burden. A friendly lobbyist in Santa Fe helped us figure things out. Much of that “refundable” loss comes in the form of film subsidies.
In other words, thanks to film subsidies being “booked” against corporate income taxes in ways that seem to reduce New Mexico’s corporate tax revenues to zero (or even below). The Rio Grande Foundation has consistently opposed film subsidies from day one, but Voices would rather misleadingly claim that corporations don’t pay taxes and ignore what is really happening.