Film Subsidies: Economic Dead End

I have a fair amount of respect for the folks at Albuquerque Studios. After all, they plopped down a lot of private money to build their studios just south of Albuquerque. Certainly, they did this with the intent of taking advantage of New Mexico’s massively-subsidized film industry, but unlike the Santa Fe Studios which are again subsidized, the Albuquerque Studios themselves were not. Unfortunately, in a sign that the film industry is not economically-viable in New Mexico — perhaps even with massive taxpayer handouts — it has come to light that the folks at Albuquerque Studios owe $334,000 in unpaid property taxes. This comes on top of the Studios’ recent flirtation with bankruptcy.

If the film industry is so great, shouldn’t SOMEBODY in this state be able to create a going concern without directly relying on government handouts?

Oh, and then there is this nice analysis of that state’s film industry subsidies from our friends at the Mackinac Center, a free market think tank based in Michigan. Despite $117 million in film subsidies over two years, there are fewer people employed in the film industry now than before the program took effect!

With a new governor coming into office this November and the economy (and budget) still in the tank, now would seem to be a great time to discuss the future of the film subsidy program and whether we can eliminated or at least limit its negative impact on taxpayers.

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3 Replies to “Film Subsidies: Economic Dead End”

  1. Lots of States try this tactic. It fails because the movie folks go where the next tax incentive is higher. Unless you offer tax incentives to establish a company and build infrastructure no long term benefits will be realized. In the early 80’s the Federal Government offered tax incentives for investments in infrastructure, machinery and manufacturing. This was a great time because companies would purchase equipment needed to establish or grow services which were normally financed over 3 to 5 years. Just sending out checks for showing up is like the old Chinese proverb…
    Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

    I provide consulting for the media and entertainment industry which is suffering.

    Imagine a producer explaining that he is going to Bulgaria to shoot his movie he is going with one actor and his director, every penny spent on the movie will be spent there. The revenue will flow through us companies and if profits are made taxes collected but no labor will be done here. Event the film processing is done there. The post production may or may not be done there.

    Sad but true.

  2. Same principal applies to any business venture. If it cannot stand on it’s own, iit is a detriment to a community for any governmental entity to subsidize it at the expense of local taxpaying businesses and resident taxpayers.

    Seems there is a never ending supply of people wanting something for nothing, not realizing their pie in the sky is using a multitude of tax dollars taken from people.

  3. Why do we give tax in incentives to film firms at all? It’s only a business.
    We want to hob-knob with glamourous film folk? They’re only people….and they brought their own lunch.

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