The one powerful thing that the movie industry does have going for itself is its impact upon the locations they decide to shoot in. Whether the movie makes money or not, the economy of the states receiving the business has been huge.
Take the case of New Mexico. Since the early part of 2003, the state has waved about $30 million in taxes or interest on loans. It is estimated that in return, there has been a minimum of $260 million.
On top of that, for the production companies that partake in the zero-interest loan, the state negotiates a deal where they get a percentage of the profits from the movie when it comes out. Because a number of movies are just being released, the figures on those haven't come in yet.
One example that is used is the movie with Jessica Simpson/Dane Cook - Employee of the Month. It's already doubled the cost of the movie and is still going. Who knows how much more the state will get as a result.
Eric Witt, the governor’s director of legislative affairs and media arts and entertainment development said that he thinks that the figure is closer to $780 million as far as the profits the state has received from the overall venture.
Edward McLoughlin, a Santa Fe-based crew member added that “I don’t think it’s getting across to the media how much money is being spent by films in New Mexico, whole art departments are going out spending money in local shops, local businesses, on hotel rooms, cars, in lumber, antique shops, even in Goodwill. We went into Goodwill not so long ago and spent $1,500! It’s just amazing how much money is being pumped into the local economy.”
Another perk people from New Mexico get is that for the production company to get the loan, 60% of the the below-the-line payroll (devoted to the technical crew) must be paid to New Mexico residents. Evidently, a film electrician can earn $40,000 in only about 20 weeks of movie work. It also creates a lot of residual jobs.
This is just one state. Each state has its own independent deals that are offered to production companies to entice them to work in the state. It seems the payoff is more than worth it.
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