Re: [MISP] SB 235 proposed Caps on Film Rebate

Mike,

According to the Ernst & Young report prepared for the New Mexico State Film Office and State Investment Council in January 2009, on average, a New Mexican actor earns $82,400 a year.

Please read below...

The film spending and survey data provided by the State Film Office was used to calibrate a

model of the New Mexico economy supplied by Minnesota IMPLAN Group. These data show

the average earnings of below-the-line employees (stage crew) to be $49,500 while actors,

directors, producers and other employees and contractors working on film productions earn

significantly more, bringing the total average compensation to $82,400 and output (production

spending) per worker to be nearly $114,000. This implies that 72% of the cost of production for

New Mexico films was labor cost. Based on total labor compensation of $168 million in 2007

and an average wage of $82,400, films produced in New Mexico employed an estimated 2,220

people in 2007.

Or read the full report here:

http://www.nmfilm.com/locals/downloads/nmfilmCreditImpactAnalysis.pdf

Scot Henderson Jones

Associate Professor of Film and Digital Media,

Columbia College Hollywood
(818) 679-4860

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Date: Tue, 2 Feb 2010 15:10:15 -0700
From: mlmiller@9POINT.COM
Subject: Re: [MISP] SB 235 proposed Caps on Film Rebate
To: MISP-L@LIST.UNM.EDU

***This is a MISP Listserv message. Responses are sent to the list by default.*** ***For more info about MISP and the listserv, scroll to the bottom of the page*** * Thanks Jon,

I stand corrected.  The real message is that the incentives need to remain untouched because it will destroy an industry if they change anything and the next pay cut for that $450 a week prison guard could be substantially more than 2% if we lose the large amounts of money brought into the state by large productions. 

I will see you Friday. 

Mike

Jon Hendry wrote:

***This is a MISP Listserv message. Responses are sent to the list by default.*** ***For more info about MISP and the listserv, scroll to the bottom of the page*** * Mike $1500 is NOT my figure. Some gentleman who claimed to represent actors jumped up at the House Labor committee and put that figure forward as a reason to keep or even expand the present incentive structure. Really ? Thats a good argument to the $450 a week Prison Guard that they want to cut 2% ? Really ? Thanks for the support and the informed debate

ba480

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Date: Tue, 2 Feb 2010 14:25:22 -0700
From: mlmiller@9POINT.COM
Subject: Re: [MISP] SB 235 proposed Caps on Film Rebate
To: MISP-L@LIST.UNM.EDU

***This is a MISP Listserv message. Responses are sent to the list by default.*** ***For more info about MISP and the listserv, scroll to the bottom of the page*** *

Here's a slightly different perspective on SB 235 from a "small" independent producer's point of view. 

First, I am opposed to HB 235 and any additional limitations on the way we invite large budget movies to New Mexico.  I just spent some time this past week at Sundance and I can tell you that the other states are mounting a full court press to lure those productions away from us.  If we begin changing or limiting our programs now, we lose.

Our biggest selling point to the outside world is that we have no caps, no sunsets, no massive hoops to jump through that delay payment of the incentives, and a highly trained and experienced crew base that can handle their jobs. 

It is my sincerest hope (being an actor) that they will soon begin casting run of show principle roles in New Mexico instead of just using us for day player roles and background. 

I do think we want to be careful how we represent what actors are paid.  Jon's point is correct that the high paid actors come from out of state and thus are not eligible for rebate, but those of us who do get "$1500" a day (Jon's figure) sometimes who are instate actors only work one to 5 days a year.  In addition, while crewmembers get generally less per day, they are working substantially more than actors are.  Less than 25 New Mexico Actors actually made the minimum annual amount for SAG benefits last year. 

 That being said, it is important to note that this business has grown over the years, starting with the training for the crews and creation of infrastructure to support an industry to a point now where a lot of us who only dreamed of the movie industry have had a real opportunity to be a part of it. 

 The thing to pay attention to here is that it is still growing and our time as actors and small budget producers will come as long as we do not drive away the bigger budget shows that sustain our industry now. 

 However, caps or limitations on the current programs would send a message to the large budget shows that we do not want them here.  The producers would hear that message loud and clear and go somewhere else and then the growth would stop and the rapid deterioration of the industry in New Mexico would begin.  In addition, when I say rapid, based on my daily discussions with projects outside the state considering coming here, I firmly believe that it would be overnight.

 A comment was made by a lawyer on the film funding panel discussion I attended at Sundance, hosted by Film Utah, that producers have the "fiscal responsibility" to go to the location where the best incentives are or risk recuperative lawsuits from their investors. 

 If we are to make movies here at all, we must keep the bigger productions coming to our state and to do that, we must remain perceptually and in reality the leader in film incentives, both financially, crew, and infrastructure wise.

Mike Miller

Brent Morris wrote:

***This is a MISP Listserv message. Responses are sent to the list by default.*** ***For more info about MISP and the listserv, scroll to the bottom of the page*** * I agree with Jon that we must be united in our stance here that this $2M cap per project is detrimental to our industry, and low budget filmmakers should also see it as such.  I know there has been a lot of debate here about the lack of funding for smaller New Mexico-originated projects.  And for those working in the low budget arena, a $2M cap might seem perfectly reasonable indicating a total budget of $8 million and up -- no small potatoes for many of us.  Yet it seems to me that New Mexico's production industry has thrived on the bigger budget films and series, which have trained and developed a powerful work force who bounce back and forth between bigger and smaller budgets.  It's much easier getting crew members to work low/no-budget projects after they've banked their hours and paid their mortgages from salaries on higher-paying gigs.   

Even assuming the same amount of $8M and under projects choose to shoot here with such future caps in place (which I think is fallacious), those of us who work on those films know full well the budgets cannot support intensive construction, special effects and second units that put many local crew members and vendors to work, or schedules that last for much longer than six to eight weeks.  I believe if these proposed caps are put in place New Mexico will become a second class production center, Moviemaker Magazine's recent blurb aside.  It's not enough to live in a great place to be an independent filmmaker if you can't make a living doing so, and we owe many of our favorable rates and terms to conditions created by the presence of bigger industry here. 

I would look forward to hearing more detailed ideas for tightening up the rebates that would not discourage producers from seeking other locations.  6 month residency seems standard fare.  I imagine we could spearhead some further innovations as Jon suggests that might benefit our state in the long run without scaring off out-of-state investment.

See you on Friday at Media Day.

Brent Morris

indieproduction.com

On Feb 2, 2010, at 8:41 AM, Jon Hendry wrote:

***This is a MISP Listserv message. Responses are sent to the list by default.*** ***For more info about MISP and the listserv, scroll to the bottom of the page*** *

Now that we have had a chance to spend some time with Senator Smith's bill I think we have a clear idea of where he's going and we'll be able to come up with some persuasive arguments on why the rest of the legislators shouldn't go with him.

Before I get into this we should all resist the temptation to demonize Senator Smith or anyone else who opposes the continuation of film initiatives – these guys have been given a very serious task which is to present a balanced budget that can pass both houses and be signed by the Governor and in doing so create the minimum amount of disruption to all New Mexicans. It's also an election year so House members at least need to be more keenly aware of the concerns of their constituents. It does not help for us to berate them, question their intelligence, or integrity. Frankly, this citizen legislature is better than what we can expect for what we pay them, which by the way, is nothing. They can't even cover their expenses which is probably why over half of the primaries and almost half of the general election seats will be uncontested. To those of us who are unprepared to make a compelling case for the retention of our tax incentives I say, "grow up" or perhaps more accurately "grow a pair" because this is all part of the process, nobody is going after us personally and we have a compelling argument to make. We need to be able to sell that argument not only to the legislature but to the teachers, prison guards, and healthcare workers who need to know that we're making money for them and not getting money instead of them.

 

The bill has two major components. One is a cap per project of $2 million for production, and $2 million for post. I see very few movies that cost as much to post as produce so that is the first fatal flaw. The second is as written we lose not only our major movies but our TV series since they would treat them as one picture. I think we need to focus on the argument  of the economic benefits of mega movies, particularly the idea that above the line and any out of state crew brought in (though that number diminishes year by year) is non- rebateable anyway. The impact of a $50 million movie is significantly higher than a $10 million movie and that's what we're talking about. The impact of a TV series is higher than both. The second part is something that I can certainly live with although I'd be curious to know the mechanism to enforce it, and that is a six month minimum residency for a crew. Personally I could even see this extended to a year. I think the bill drafters are giving us an opportunity to have the discussion of what should and should not be rebated. The Film office introduced a bill three times previously that significantly tightens up the definition of a NM business and puts in a strict "bricks and mortar" requirement. I think along with an expanded definition of residency that is certainly a way we could go. To me it's as important where the money ends up as it is where it goes. Just because Home Depot pays NM taxes doesn't mean we should be financing Arthur Blanks aquarium in Atlanta. I would like to see us argue against this bill but have a back up proposal that tightens the rebates, who can be rebated, and there are some other innovative proposals that could lessen the fiscal impact. This would be a great time to look at them.

 

Either way this is the big one. Rep. Kintigh's bill was soundly defeated in House Labor and rightly so. We're going to have a much harder time with this bill. We need not only labor, vendors and film makers, students and teachers, those who already benefit from the film business as well as those who hope to. Film & Media Day is Friday and it looks like that is when the bill will get its hearing in Senate Corporations. We're going to need everyone there prepared with respectful arguments and ready to lobby. The IA is paying an enormous amount and has received several generous in kind donations plus thousands of volunteer hours to set up a large base camp across the street from the Roundhouse where we can show who it is we are and what it is that we do. We're also paying expenses to bring in school kids from around the state, buying them t shirts, feeding them lunch, and putting on multiple demonstrations of the opportunities of this business. That is in addition to our full time four person political team and office at the Roundhouse – none of which comes cheap. We could easily blow this if our testimony centers on "I'll just move back to California or on to the next rebate state", or "Actors make $1500 a day". If you don't feel you can be part of a united, well argued, disciplined lobby effort then you may have a constitutional right to address your law makers but could I remind you that you also have a constitutional right to stay home and leave it to the professionals. 

Jon Hendry

 

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