In regards to the ABQ Journal Editorial (below my comments)
It all sounds very innocent, but there are several major problems. The first was illustrated by the Journal's original front page story – there wasn't a picture of hard working crew members, it was a picture of the stars from "Wild Hogs". That is the information they are really look for. The sensational story about how much they get paid. New Mexico has a cap on actors of $5 million, the GRT on the loan out companies and the personal income tax on their New Mexico compensation has no limit. I would speculate that on a picture like "Wild Hogs" there was no net cost to the State. The Journal loves stories about stars, particularly if they can put them in a bad light, I'm sorry Mr. Cole, nobody is going to a movie to see you, it requires stars to open a picture and the market sets their salary.
I also have a problem that movies would be treated differently than other incentive programs. We put large amounts of money into the labs and aerospace in general, ranching, renewable energy, and literally dozens of other businesses. The Journal speculates that the total figure for economic development incentives is over $500 million a year and we're somewhere around 6% or 7% of that. That doesn't include TID's, the tax exempt bonds, (which go into the billions for Intel alone) and myriad other statewide and local incentives. I would argue that is the essential function of government – to provide employment for their constituents and we do not put enough emphasis on economic development in the state but regardless much of this will go away if we breech the confidentiality of the program. I can guarantee you this has happened before – film companies will just stop shooting in a State when budgets and actual are public record. If there is a move to release these tax records then it should be for everyone. Why we are being continually singled out is obvious. It's political.
If these confidential tax records are released then my members , the hard working labor that makes the pictures will have their confidentiality breeched. Why? Because they work in the movie business, are they to be treated differently and their earnings be made public.?
I would urge you if you are at all concerned about this business and more importantly the bigger point of tax payer confidentiality, write your local newspaper, blog, call the radio stations, do whatever you need to do to emphasis this is not about us, it's about taxpayer rights.
Jon Hendry
Monday, June 29, 2009
Give Taxpayers a Peek at Expenses They Pay
Give Taxpayers a Peek At Expenses They Pay
The state Taxation and Revenue Department says details on the $86.5 million New Mexicans have forked over to film companies between July 1, 2007, and March 16 are private tax information. Gov. Bill Richardson's Office says what film companies like Wild Hogs Productions spend their money on is secret proprietary information — even if they're reimbursed from your tax dollars 25 percent of what they spend.
Eric Witt, Richardson's deputy chief of staff and film adviser, justifies the secrecy as a privacy need similar to taxpayers who get credit for dependents. Some in the film industry have gone so far as to say the information is protected from disclosure under a "constitutionally protected right of privacy."
Hogwash.
These "tax credits" are really plain old reimbursements for expenses, and the rationale for keeping them secret as confidential tax information falls as flat as "Swing Vote" did at the box office. (New Mexicans paid Swing Vote LLC $3 million.)
Rep. Dennis Kintigh, a Roswell Republican, is right to question the secrecy. Tax and Rev can call the checks it cuts — like the one for $8.5 million to Wild Hogs Productions — "film production tax credits" under state law, but there's no W-2 or 1099 or 1040 or any other tax form involved. Producers submit what amount to expense-account claims, Tax and Rev audits them, and taxpayers cover the check.
Kintigh says he's "not trying to kill the industry. I would just like to get all the data out" on the program. With dueling studies on the economic impact of the film industry on New Mexico, he points out releasing the expenses claimed by production companies would go a long way toward ending the debate by showing high-impact expenses (like wages to New Mexicans) vs. low-impact ones (equipment rental).
"I want to assess this program," he says. "Let's put it all out on the table for people to see."
Let's. If it's important for movie moguls to keep the amount they spend on John Travolta's trailer or Kevin Costner's hairdresser a state secret, then they shouldn't ask for state money to pay those bills.
This reimbursement program appears to be an economic development incentive worth keeping. But the public deserves to know how its money is spent.
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