Gov. Michelle Lujan Grisham said she was going to take the “shackles” off the state’s film industry by removing an annual $50 million cap on tax rebate payouts to eligible production companies that film in the state. While she didn’t exactly get her wish, Senate Bill 2 comes close. It increases that cap from $50 million to $110 million, appropriates $225 million to pay off a backlog of film tax credits owed to production entities and, to sweeten the deal, offers another 5 percent in tax rebates for productions that shoot in rural areas. The House of Representatives voted 41-24 to approve Senate Bill 2 after a nearly three-hour debate around 3 a.m. Friday. One Democrat, Candie Sweetser of Deming crossed party lines to join 23 Republicans in opposing the initiative.
The New Mexico Senate voted Tuesday night to raise the limit on tax credits paid to the film industry and pay off a mounting backlog. Senate Bill 2 has been a priority for newly elected Gov. Michelle Lujan Grisham and a burgeoning sector of the state’s economy that has brought a certain renown to New Mexico. But budget hawks on both sides of the aisle have been wary of eliminating the current $50 million annual limit on tax credits, arguing that the state needs some sort of cap for reliable budgeting. And critics contend efforts to subsidize the film industry here just aren’t worth it and amounts to sending money to out-of-state corporations. Still, when it came times to vote, the bill passed by a vote of 32-8, with several Republicans joining Democrats to back the measure.
Gov. Michelle Lujan Grisham wants state legislators to allocate up to $380 million to pay off a backlog of tax credits owed to production companies that shot movies or television shows in New Mexico. Tripp Stelnicki, a spokesman for the governor, said the buildup of unpaid rebates “creates an uncertainty in the minds of producers. The governor prefers to get this done as quickly as possible.” Paying what’s owed would require a one-time appropriation from the general fund, said House Speaker Brian Egolf, D-Santa Fe, who met with the governor on Tuesday. As it stands, New Mexico’s tax incentive program for qualifying movie-makers only allows state government to pay out $50 million of rebates in any given year, regardless of how much was accumulated.