On April 7, Governor Michelle Lujan Grisham signed into law House Bill 547 passed during the 2023 legislative that progressively increases the annual cap on film industry tax credits from $110 million to $160 million over the next 5 fiscal years. The law took effect on July 1. The law promises to stimulate further growth and employment in New Mexico’s film industry throughout the next decade, with estimates projecting the creation of thousands of jobs. New Mexico Film Office Director Amber Dodson said that the increase will prevent a backlog of rebates and that it will foster the continued growth of film and television productions in the state.
House Bill 547 introduced adjustments that exempt resident principal performers from a $5 million credit cap per production. The ultimate goal is to incentivize the casting of local talent for leading roles. The above-the-line credit cap for New Mexico Film Partners, including Netflix, NBCUniversal, and 828 Productions, was increased from $5 million to $15 million per production. The legislation further introduces a maximum total credit cap of $40 million per fiscal year.
Rural New Mexico will greatly benefit from the new legislation. House Bill 547 increases the rural uplift incentive from 5% to 10% and redefines the zoning to at least 60 miles from the city hall of each county. This will prove a major boon for rural communities including Doña Ana County, McKinley County, and the Mescalero Apache Reservation.
The legislation also ushers in more restrictive terms for the Nonresident Crew Exception Program (NRCE). However, New Mexico Film Partners will see added benefits. NRCE offers productions the ability to hire nonresident below-the-line crew at a reduced credit, with restrictions differing depending on the production company’s partnership with the state.
FILM INDUSTRY EXPENDITURES DOWN
On July 18, Governor Michelle Lujan Grisham announced that New Mexico’s film industry spent more than $794 million in the state from July 1, 2022, through June 30, 2023. The $794 million in direct spending is down from fiscal year 2022, which had a record high of $855.4 million. Over the last 3 fiscal years, film industry spending in the state was over $2.2 billion.
Though in fiscal year 2023, the direct spending for productions receiving the credit is $16.5 million, which is down from the $50 million in fiscal year 2022.
The rural uplift credit, which gives a production an extra 5% in rebates for filming at least 60 miles outside the Albuquerque/Santa Fe corridor, continued to bring productions to every corner of the state.
Despite the decline in direct spending, Governor Lujan Grisham said this in a statement:
“The investments in New Mexico by the film and media industry are delivering higher wages and creating cascading positive economic impacts in communities large and small across the state. … Our continued efforts to create a thriving and robust film industry means more money in the pockets of New Mexico families and businesses.”
According to the New Mexico Film Office, the state hosted 85 productions in fiscal year 2023, down from 109 total productions in fiscal year 2022. The data released by the film office shows that median hourly wages for industry workers was $35.51 in fiscal year 2023, up from $29.36 the prior year.
New Mexico-based productions include Nickelodeon’s “The Loud House” franchise, Walt Disney Pictures’ untitled reimagining of “Alexander and the Terrible, Horrible, No Good, Very Bad Day,” the upcoming Netflix series “American Primeval” and the feature “Rez Ball,” as well as second seasons of Amazon Studio’s “Outer Range” and AMC’s “Dark Winds.”
The state also saw “Better Call Saul” end its six-season run. Production for the AMC series had been steady from 2014 through 2022. State-filmed series ABC’s “Big Sky: Deadly Trails” and The CW’s “Walker: Independence” premiered last fall, but were both canceled in their third and first season, respectively.
THE FUTURE NEW MEXICO MEDIA ACADEMY
The New Mexico Media Academy, located in the Albuquerque Rail Yards, is scheduled to open in 2025. The academy will have a satellite campus in Las Cruces. Students at the academy will enter a competitive and growing film and television industry workforce.
Amber Dodson, New Mexico Film Office director, in statement said this:
“We are building our film, television and digital media ecosystem from the ground up, with a particular focus on staying competitive and not just being relevant but leading the way into the next frontier of how content is made. … Our best-in-class incentive, workforce, training programs, and soon, the film academy, are all essential to generating opportunity, access, and prosperity for New Mexican residents and businesses, which are the foundation of our sustainable, thriving industry.”
The link to news source reference material is here:
COMMENTARY AND ANALYSIS
Prior to and despite the ongoing Writers Guild of America and SAG-AFTRA strike, New Mexico remains a hotspot for filming as Albuquerque, Santa Fe and Las Cruces were named to Movie Maker’s list of best places to live and work as a filmmaker. Currently, the industry is being impacted globally by the ongoing Writers Guild of America and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) strike and New Mexico is no different.
There is very little doubt that New Mexico film industry production crews, vendors and local businesses are dramatically beginning to feel the crunch of lost revenues as film production in the state has come to a screeching halt. From all appearances, the end of the strike is nowhere in sight with the actors union SAG-AFTRA joining Writers Guild of America.
SAG-AFTRA STRIKE RECALLED
The last time the actors guild went on strike was in 1960 and Ronald Regan was president of SAG-AFTRA. SAG’s strike ended on April 18, 1960, when the guild agreed to forego residual payments on films made prior to 1960 in exchange for receiving residuals on all films made from 1960 on as well as a one-time payment of $2.25 million from producers to form a SAG pension and health plan.
The writers’ strike, on the other hand, continued until June 12, 1960, when the WGA agreed to a groundbreaking new deal. Gains for the guild included the first residuals for theatrical motion pictures (payments of 1.2% of the license fee when features were licensed to television), an independent pension fund and industry health insurance plan, and 4% residuals for both domestic and foreign television reruns.
The link to quoted news source material is here
MAJOR STUMBLING BLOG
The issues being dealt with in the current strike are far more complicated than what happened in 1960. The entire film and production industry is now completely shut down, not only in New Mexico, but globally. Thousands of unionized New Mexico film workers and writers are standing down in support.
The current strike will not likely be resolved any time soon and may drag on for months if not at least a full year or more. At the core of the dispute is the use of artificial intelligence and how it is used and who benefits from it. What is being fought over are words, images and creation of original productions that can be created without consent.
Ostensibly, what is happening is that the major studios including NETFLEX and NBC which do business in New Mexico are hellbent on starving out writers and actors. Only time will tell if the strike will be a major death blow to New Mexico’s film industry.