Back in the days when Seinfeld was in its prime, I lived on the Upper West Side of Manhattan, the setting for probably the best comedy series ever on television. But the connection wasn’t just asserted in the script. It was proved on the screen every time they set up for a scene inside Jerry’s local diner. They would show the exterior of Tom’s diner just around the corner from me, a block up Broadway. I loved it, even though I knew the scenes were all shot in California, in the aptly named Studio City. I loved that my diner was literally an icon on the #1 show on television.
Now that I live in New Mexico, I enjoy far more frequent opportunities to spot a local New Mexican backdrop for a growing number of movies and TV shows being shot in my sentimental backyard.
There are many explanations for this, but a big one is the subsidy the state pays out to the producers of those entertainment industry dramas and comedies. For every dollar spent on production, the state kicks back at least a quarter.
This, Paul Gessing of the Rio Grande Foundation wrote in an op-ed for the Las Cruces Sun-News, “is the single most generous business subsidy offered by the state.”
It is a lot of quarters. During the last four years of Gov. Susana Martinez, the subsidy was supposed to be capped at $50 million a year. But it wasn’t, and in 2019, the first year for Gov. Michelle Lujan Grisham, the state had to pay off an extra $219 million in subsidy money due to the film and TV production companies.
But could this undisclosed debt passed from a Republican administration to a Democratic successor actually be good news?
It could be, if the basic bet the New Mexico state government is making is a good one.
The New Mexico film and TV subsidy, as Gessing puts it, “funds the ongoing operations” of these productions. So, what does the state get for its investment of taxpayers’ money in a lot of things people may or may not want to see?
In a word, “jobs.” Well, better in two words: “economic activity.”
Not just jobs and salaries, but demand for a network of production-related crafts, services and materials, and for some expense-account hospitality. The bet here is that all those moneys spent generate enough taxable activity to justify the cost of the subsidy.
The “blue sky” – that warm, fuzzy feeling of seeing your state on the screen is just gravy.
Tasty gravy indeed, but how good is the beefsteak beneath it? Does the cost-benefit ratio for subsidizing states work out for the states involved?
Meredith Jordan is the author of Below The Line: Anatomy of a Successful Movie. Jordan, who had the rare experience of being an embedded journalist for an entire Hollywood feature, chronicled the behind-the-scenes happenings in the making of Last Vegas. An award-winning reporter, Jordan worked for East Coast news organizations for 25 years, including Dow Jones & Co., Cox Communications and National Geographic.