Letter to Senate Finance and Response

From: jerry ortiz y pino <jortizyp@msn.com>

Date: March 15, 2011 12:15:34 PM MDT

To: <hollylocations@gmail.com>

Subject: RE: The Cost of the Film Cap

We are working to find an agreement with the Governor to keep this valuable industry (the only growth industry in the state right now) healthy and sustainable.  The problem is that the Governor has made this a point of honor, one she apparently doesn't know how to back away from.  We don't need the savings from capping this industry to balance the budget--the amount involved is less than four tenths of one percent of our entire budget.  So what's happening now is politics, pure and simple.  This is a dangerous game we are playing with a desperately needed infusion of economic activity.  

Jerry Ortiz y Pino


From: hollylocations@gmail.com
Date: Tue, 15 Mar 2011 11:52:04 -0600
Subject: The Cost of the Film Cap
To: john.smith@nmlegis.gov; carlos.cisneros@nmlegis.gov; radair@dfn.com; petecampos@newmexico.com; leavell4@leaco.net; howiemorales@yahoo.com; nmsenate@msn.com;jortizyp@msn.com; marykay.papen@nmlegis.gov; nancy.rodriguez@nmlegis.gov; sue.beffort@nmlegis.gov

To the members of the Senate Finance Committee,

I was in the Senate Finance Committee Monday morning and I am deeply disappointed in the majority of you who voted for the $50 million dollar annual cap on the film rebate. I do not believe it is the work of the state legislature to mandate how much money an industry can bring to a state. By creating a cap, you are effectively doing just that. Because of various film industry market conditions, film companies will not come to film in NM if the rebate is unattainable to them. This will not change. It has to do with the high costs of advertising and distributing a film in this country. Until the distribution system in the US is fixed, film companies will continue to take their business only to states with viable film rebate programs.  

I want to talk about the costs of the film cap. What are the costs of limiting film industry revenue from almost $280 million (in 2010) to a max of $200 million? Let's just look at the unemployment costs as a start. A reduction from last years revenue of $69.5 million to a cap of $45 million is roughly a 35% reduction, so we must expect a 35% reduction in film related jobs. If the industry has 10,000 jobs and we lose 35% of those jobs, we can expect 3500 people out of work. If we look at an average of $250 a week in unemployment insurance for 3500 people, we are looking at an expenditure of $24 million dollars in one year. So tell me, why should NM taxpayers support legislation that puts $18.6 million dollars in the budget only to cost us $24 million in unemployment?  

With a $50 million dollar cap, the industry will slow down and the job market will become much more competitive. The production community and infrastructure will be over burdened during the first part of the fiscal year as films vie to get into the state and complete their projects before the rebate runs out. Then we will have studios and equipment sitting empty and idle the latter half of the fiscal year, once the rebate has been spent. Episodic projects such as "Breaking Bad" and "In Plain Sight" that work during the course of a year, will find it too risky to work in New Mexico. We will lose these film companies that otherwise could continue to shoot in NM for multiple years going forward. The cap will greatly destabilize a healthy and thriving industry in NM and will further weaken our economy.  

Many of you said that this has become political and you are in a tough place. I have a hard time believing that only one of you is willing to take a stand against the governor's strong arming to protect thousands of jobs, local business and health care. Jobs will go to other states, there will be an increase in home foreclosures and people with cancer will not have access to the work that pays for their healthcare. Perhaps when these stories start to hit the media, you will find the courage to fight the political battle that this unfortunately has become.  

Thank you to Rod Adair for having the foresight, understanding and courage to vote against the $50 million dollar cap. I hope that the rest of you will reconsider your position and fight for no less than these three things going forward: 

~A CAP OF NO LESS THAN 70 MILLION TO ALLOW FOR ALL THE BUSINESS WE ARE ABLE TO BRING TO NM
~PUT A 2 YEAR SUNSET ON THE CAP SO THAT WE MAY STUDY THE INDUSTRY AND REEXAMINE IN 2 YEARS
~RESTORE THE TIER SYSTEM 

Thank you for all your work,

Holly Roach