SANTA FE, N.M. (KRQE) – Stranger Things, Oppenheimer, and Dark Winds are just a few of the film and TV productions recently shot in New Mexico. The growing film industry brings jobs and cash, but there is a cost – literally millions of dollars in foregone taxes.

While many locals and politicians have celebrated the growth of New Mexico’s film industry, a new report by the Legislative Finance Committee suggests that the state might be spending too much to try to bring more productions to the state.

“By any measure, film incentives are very expensive,” Brendon Gray, an economist at the Legislative Finance Committee (LFC) told lawmakers in a meeting Wednesday. “The evidence suggests film incentives are likely less effective than other economic development incentives, costing more per job, generating less business activity, and having a lower return on the state’s investment.”

Over the last fiscal year, New Mexico gave up over $100 million in tax revenue in order to incentivize production companies to choose New Mexico. The film tax credits are a way to convince moviemakers to choose New Mexico as a backdrop instead of Los Angeles or other locations. Offering credits is common around the nation, but New Mexico has some of the most generous deals for filmmakers, according to the LFC report.

New Mexico is the No. 2 spender in the nation when it comes to the proportion of total general fund expenditures put towards the film industry, according to the LFC. The state doesn’t directly hand filmmakers money, but by giving them massive tax breaks, the state does “pay” for filmmaking.

The state’s investment in the industry has brought economic development and jobs. “This significant spending does bring results,” Gray from the LFC said. However, the LFC report also notes that film-related job creation through tax incentives is an expensive form of job creation.

Jobs created by film tax credits cost the state about $22,800 per job created, according to the LFC report. On the other hand, job creation through the Local Economic Development Act (LEDA) costs about $9,600 per job.

The LFC report says the annual average direct employment in the film industry was 2,774 jobs in 2022. That’s about the same number of jobs that the state’s long-distance freight trucking industry employs, the LFC report says.

Data shows that film incentives do provide a positive return on investments for people within the film industry. But the return to New Mexico taxpayers as a whole, the report says, is in the red.

Amber Dodson, the director of the New Mexico Film Office, told lawmakers that investments in the film industry are paying off by some metrics. Dodson points to calculations that show productions have directly spent more than half a billion dollars a year in the last three years in New Mexico.

“Since [fiscal year] 2021, we have been seeing record-breaking numbers. We’ve never seen this sort of direct spending, outside money, coming into our state,” Dodson said.