Monday, April 27, 2009

Let's Just Get More Information

This essay written by me was posted on Heath Haussamen’s blog and referred to in Joe Monahan’s April 22nd blog. An earlier editorial, critical of my concerns about the film industry, titled “Dumb and Dumber” appeared in certain newspapers.

Let's just get more information

At one point during this past legislative session a flood of emails, phone calls, and office visits deluged the capitol begging, pleading, and on rare occasions demanding that a particular piece of legislation be stopped. We were warned that, should this particular bill be allowed to become law, the effect would be catastrophic for New Mexico.

I am not referring to a sweeping piece of social legislation such as Domestic Partnership, the Freedom of Choice Act, or the Death Penalty. Rather the bill that produced this tsunami of reaction was a revenue bill--my revenue bill. HB 725 was a bill to repeal the Film Production Expense Rebate.

Although the bill was tabled in the first committee, some individuals (including a recent columnist) continue to demand that this subsidy must not be questioned, criticized, or touched. Any who take an opposing view are to be mocked and vilified.

Currently the State of New Mexico pays film production companies for certain activities. The most prominent part of the existing law is a 25% rebate from the State for all qualified direct production expenditures. In 2003 this program cost $1.1 Million. By 2008 the cost had increased to $47 Million, and it is expected to grow to $54 Million in 2010.

While it is obvious that certain individuals and companies have profited handsomely from these subsidies, the issue before this legislature and this administration is how to be good stewards of a dwindling supply of increasingly harder-to-produce tax dollars--dollars squeezed from a shrinking work force.

The two studies of the New Mexico Film subsidy program have produced widely differing conclusions. One study claims the return to taxpayers is $1.50 for every tax dollar paid out. The other study identifies the return to be only 14.5 cents on the dollar. There have also been additional studies of the effectiveness of these subsidies in Louisiana and California. The Louisiana study puts the return at 16 to18 cents on the dollar.

Much attention has been paid to the fact that California, in the middle of a budget crisis, has adopted new incentives to woo back film production. However, little has been said about the report from the California Legislative Analyst’s Office. The California Legislature was advised to “reject the film tax credit”. That advice was ignored.

The recently adopted New Mexico state budget shifts an increased burden onto our public workers. These workers will now have their pay reduced by 1.5% to save the state $40 Million. In addition, the budget calls for dipping into the state’s savings to the tune of $136 Million.

How can this administration call on sacrifices and savings depletion while at the same time give away $54 Million to one protected industry? How do we face the struggling small businessman, the laid-off factory worker, or the state policeman and say that he or she must sacrifice, but this program cannot be questioned?

Obviously there are different perspectives on this issue. The studies mentioned above have one showing a return TEN times greater than other studies. Which is correct? I believe the answer can be found in closely reviewing the details of this program which are now hidden in secrecy. Exactly who is getting these tax dollars? What exactly have they done to justify getting your tax money? What is the actual benefit to the taxpayers of New Mexico?

This is a serious public policy problem that must be examined and resolved. That is not done by hurling verbal abuse at those who dare to express concern or think this is a grave problem. In my prior job with law enforcement, answers to questions like these were called “evidence,” and it is so much more helpful in public debates than witty comments or vindictive insults. Let’s have an open and public examination with a sober and serious discussion. I believe that is what the public deserves, and I believe that is how effective public policy is made.