A federal film credit is a really awful idea

For nearly two decades (since the Richardson Administration) the Rio Grande Foundation has fought the insane New Mexico film tax credit. The program was “just” a 25% back in those days and New Mexico wasn’t awash in oil and gas money like it is now, so then Gov. Susana Martinez and the Legislature imposed a $50 million annual annual payout cap. That created a backlog of several hundred million dollars in payments to Hollywood that were then paid off when Democrat Michelle Lujan Grisham took office. She and the Democrat controlled Legislature also raised the credit to as much as 40%.

So, film could receive as much as 40% of its filming expenses back from New Mexico taxpayers. This has NEVER been good economic policy. The Legislative Finance Committee (and other legislative analysts nationwide) have consistently found that film incentives are a waste of money. As the chart below shows New Mexico’s has a -86% return on investment. All states have negative returns, but some are slightly better or worse than others.

President Trump and a bipartisan group of legislators are now pushing for the federal government to get into the money losing film subsidy game. According to the story 9/24/26:

The effort involves an unlikely mix of figures — Sen. Adam Schiff and Rep. Laura Friedman of California, red-state lawmakers, Trump and the president’s Hollywood ambassador, Jon Voight. South Carolina Republican Tim Scott is expected to introduce the legislation in the Senate, and Texas Republican Nathaniel Moran will do so in the House. And it has the support of Trump, who has called for the incentive in recent weeks.

Hollywood is in the dumps due to their own misguided decisions and broader industry forces. With the federal government in dire financial shape it is critical Washington NOT jump into paying out millions annually in film subsidies.