By Robert Nott: The New Mexican
A doctored version of an official Legislative Finance Committee document introduced in a House Committee session last week may cause more confusion and controversy about the merit of the state’s popular film incentive program.
Jon Hendry, business agent of the local film technicians union, the International Alliance of Theatrical Stage Employees 480, introduced an amended fiscal-impact report to legislators at a Business and Industry Committee session on HB725 – introduced by Dennis Kintigh, R-Roswell, to repeal the incentive program – on March 3. Reports are prepared by the LFC to estimate the economic effect of legislation.
Hendry’s “corrected” fiscal-impact report, printed on LFC letterhead, included different figures for estimated revenue than those included in the original report and about 100 extra lines of analysis, editorial and commentary. Much of the new text – which was highlighted in red – suggested that passage of the bill would lead to economic decline and ruin for many in the state.
Hendry said Thursday that the confusion arose when his four-page cover letter to LFC director David Abbey and LFC economist Norton Francis was not copied along with the report. Hendry said that document made it clear that his revised report was not the real thing, but just Hendry’s analysis of it all.
“I apologize,” Hendry said. “I put comments into the report – no apologies for the way I did that – but I do apologize that if you take it away from the cover memo it was stapled to and photocopy it, it can look like a real report.”
Rep. Thomas C. Taylor, R-Farmington, said he became aware of the situation after noticing that some committee members had copies of Hendry’s report with the highlighted red text, while other members received black-and-white photocopies.
“We have had a problem with some people deciding to put their own political editorial within the report, and this is a blatant abuse of that,” Thomas said. “I can’t believe that somebody who has been around the legislative process awhile would think about using a form that, across the top, has the LFC disclaimer.”
Taylor, who said Hendry apologized after the hearing, brought the issue up at a House session later that week, warning his colleagues to be aware of such incidences.
Abbey confirmed Thursday that the amended fiscal-impact report was not an official LFC document. “Corrected isn’t the word we used, revised is the word,” he said. While fiddling with an report in such a manner isn’t illegal, Abbey said he considered it “an unfortunate, bad practice.”
Eric Witt, Gov. Bill Richardson’s point man on film and media matters, said he accepted Hendry’s explanation: “It was an honest mistake, but clearly misguided,” Witt said. “They shouldn’t have created the document to begin with, even for internal purposes. There are ways to critique a report that don’t entail making it look like it came from the LFC.”
The incident reinforces the determination that film industry supporters display when it comes to proving that the business is benefiting the state. This issue has heated up in the past few months, fueled in part by two reports on the economic impact of New Mexico’s film incentives.
A study released in August by the Arrowhead Center, the economic arm of New Mexico State University in Las Cruces, said that the rebate was netting state government 14.5 cents for every dollar the state spends on the program. The Legislative Finance Committee commissioned that study after lawmakers suggested that the tax rebate wasn’t working.
In January, the New Mexico State Film Office and State Investment Council released a study by the accounting firm of Ernst & Young that stated state and local government revenues amounted to $1.50 for every dollar.
During the house hearing, Kintigh produced a third study by the LFC that compared the first two studies and suggested the Ernst & Young study overestimated the fiscal benefits of the program. Kintigh also cited recent reports from California and Louisiana suggesting that the film business may cost more than its worth.
In his cover letter to Abbey and Francis, which could be construed as a study responding to the study about the first two studies, Hendry acknowledged that “everyone is caught in a repetitive cycle where each is refuting the other’s survey.”
HB725 has been tabled. The studies are probably still being studied.
Robert Nott can be reached at 986-3021 or rnott@sfnewmexican.com.
