Now that Gov. Martinez has seemingly jumped on the film subsidy bandwagon and will be pushing to complete a study of the program’s impact, some are wondering if we’ll finally have an answer to the question of whether the film subsidy program is an economic winner.
Of course, this implies that there is some great controversy over the economic impact of film subsidies, but there’s not. The programs are economic losers and there is plenty of information available to this effect. There’s a study by the lefty group Center for Budget and Policy Priorities.
There’s the fact that other states have been slashing their film subsidy programs.
There’s a column by liberal Michael Kinsley.
The Economist has written numerous articles including this one on the negative impact of film subsidies.
And Massachusetts is just one of many states that have found the subsidy programs provide a poor return on “investment.”
So, why have New Mexico film subsidy recipients been so successful at obtaining and keeping very generous subsidies?
1) They are Hollywood and are great at telling stories (fiction);
2) They are “cool.” Hanging out in the oil patch is not nearly as fun as meeting the cast of Breaking Bad or Jessica Simpson.
3) Classic economic case of concentrated benefits and dispersed costs. The film people know they are getting a sweet deal from the State and are organized to defend it (and obtain even more). Average taxpayers don’t see that they are getting hosed and are disorganized.
So, it is a pure political power play. What can be done to stop it? Average taxpayers need to tell their elected representatives that the film program is not a good deal and hold their Representatives and Senators (not to mention the Governor) accountable for their support of a program that takes tax dollars from average people and gives it to Hollywood studios.