Wednesday, December 8, 2010

Re: [MISP] Fwd: RE: [MISP] STATE FILM SUBSIDIES: NOT MUCH BANG FOR TOO MANY BUCKS

Hey everyone,

This is a very interesting discussion and about a topic that has been on my mind as of late.  I agree that this concept and argument is very complex and not something that can be adequately explained in one paragraph, let alone one image.  Since our best interest is to be honest about this topic and explain it correctly, I agree with Ed that an animation may help firm things up for everyone. As things progress I may be interested in helping produce that animation so I will continue to follow this conversation and please let me know if you would like to talk more.

Thanks!

Brad Swardson





On Dec 8, 2010, at 5:23 PM, Edward Angel <angel@CS.UNM.EDU> wrote:

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Jon,

That is a very good explanation, although not one that could be captured easily in a picture. It could be captured in an animation that shows the money circulating repeatedly through the system (the multiplier effect).

Both in this list serve and at the Council meeting, some have made the argument that every dollar coming into the state that wouldn't have come otherwise is good. That is a losing argument. Your example shows that the state wins when (a) its tax rate is reasonable (2) the rebate is set at the right level and (3) we can justify the multiplier. That's not an easy argument to make even though it is the correct one, both arithmetically and economically.

Ed
__________

Ed Angel

Chair, Board of Directors, Santa Fe Complex
Founding Director, Art, Research, Technology and Science Laboratory (ARTS Lab)
Professor Emeritus of Computer Science, University of New Mexico

1017 Sierra Pinon
Santa Fe, NM 87501
505-984-0136 (home)   angel@cs.unm.edu

On Dec 8, 2010, at 5:02 PM, Jon Hendry wrote:

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Apparently we need math lessons AND a picture. You dont rebate 25% of the taxes. So in your example "The 25% tax rebate pays you back
25% of $113 or $28.25 " it should read " your 25% rebate on your expenditure of $113 gives you a net cost of $88 on your expenditure"

Easier to understand : You spend at least $107 to get $75 back. A subtle but important difference. Now its impossible to pay only GRT
In fact conservative analyst claim the marginal tax rate for NM Business is 14% about the middle for all States. Even the lowest 5
states tax businesses at least 7%. So now lets look at that dollar. A business be it a picture co. or a vendor is carrying a  tax burden of 
14% in local county or state taxes. So a new  dollar in is worth $1.14 the FIRST time around. That means it costs $1.14 to generate a
25c rebate. But wait theres more. That 75c moves through the system. The most conservative multiplier IMPLAN was used by BOTH
Arrowhead and E&Y so there would be no argument over which was used . (if E&Y had used multipliers used by other states the return
could easily have doubled, lets see how  that would have been discredited Ed) The Implan multiplier for manufacturing is x3.2. So therefore
that 75c becomes $2.40. Multiply that by 14c and Voila you have 34c return on a 25c expenditure and thats why E&Y say Movies make
Money for New Mexico ! Next week we can discuss  the impact on tourism of films shot 50, 20, 5 or even 1 year agoon visitation for the next 
50 years. 


Date: Wed, 8 Dec 2010 16:20:57 -0700
From: jandabq@COMCAST.NET
Subject: Re: [MISP] Fwd: RE: [MISP] STATE FILM SUBSIDIES: NOT MUCH BANG FOR TOO MANY BUCKS
To: MISP-L@LIST.UNM.EDU

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Mike -- Yes.  I'm a writer/producer of hundreds of hours of training and communications programs and have long thought that we needed to do something like this. I'd be happy to work with a committed team. 
 
Judy Anderson
----- Original Message -----
Sent: Wednesday, December 08, 2010 3:55 PM
Subject: Re: [MISP] Fwd: RE: [MISP] STATE FILM SUBSIDIES: NOT MUCH BANG FOR TOO MANY BUCKS

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Thanks Dirk,

Apparently a picture is what some of us need.  You managed to capture exactly what I was trying to say with my baker example.  
I think that may be an important thing for all of us to realize.  Some people learn visually, others by hearing and still others by doing. 
Maybe someone can take Dirk's example and make some visuals to present to the legislature.  480 does a great "doing" presentation every year.
I will be happy to participate in some above the line doing on film day with some practical demonstrations on prepping a show.  
Someone else with better verbal skills could pick up the writing part, so the speakers have a good intelligent argument they can present on our behalf.
Any takers?

Mike

On 12/8/10 10:12 AM, Dirk Norris wrote:
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I think a picture is exactly what some people will need to understand this. A cartoon series with a little producer guy flying into New Mexico with 4 bulging bags of money, that money going to grips and gaffers and actors and hotels. Then the money goes on to gas stations and grocery stores car dealerships from the film workers. At the end, the governor is handing the producer one bag of money that he flies back to Hollywood with.

Dirk


From: NM Media Discussion List [mailto:MISP-L@unm.edu] On Behalf Of Sam Levy, NET MAN
Sent: Tuesday, December 07, 2010 6:53 PM
To: MISP-L@LIST.UNM.EDU
Subject: Re: [MISP] Fwd: RE: [MISP] STATE FILM SUBSIDIES: NOT MUCH BANG FOR TOO MANY BUCKS


Again, not true.

The "other 18%" must come from state coffers, which are generally those in the general fund obtained through other taxes.

The "further example" of hotel, gas, corporate - if qualifying expenditures are made on those items, the expenditure itself is still rebating at 25%, not the tax on the expenditure.

As an example, you make a film, you rent a hotel room.

The hotel room base rate is $100

The gross receipts tax may be $7
The lodgers tax may be $6

Total amount you pay for the room is $113

The 25% tax rebate pays you back 25% of $113, or $28.25

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