$140 million is the amount spent as of March 31 by the film industry in New Mexico for fiscal year 2011, according to the New Mexico Film Office.

40% of all films produced in New Mexico are shot in Santa Fe County, according to Film Office
Deputy Director Jennifer Schwalenberg.

" We don’t agree that the sky is falling. Filmmakers can still come to New Mexico and do their wonderful films and still enjoy the full incentive."—Dana Arnold, president and CEO of Albuquerque Studios

Forget Shirley MacLaine: Santa Feans are just as likely to run into Woody Harrelson or Ed Harris, both of whom star in the film Game Change, which is currently being shot here. But while productions like Game Change create the impression of a booming industry, nothing compares to 2008.

"Fiscal year 2008 was a banner year," Schwalenberg tells SFR. "We really became worldwide-known, mostly off a simple tax credit."

Enacted in 2003, the tax credit gives a 25 percent tax rebate on filmmakers' production costs. After New Mexico saw some success with it, states like Michigan and Louisiana attempted to compete by offering higher rebates. That, coupled with the recession, led to a slide in film industry spending in New Mexico during the following years: down to $260 million in 2009 and $204 million in 2010.

When the state Legislature faced a budget deficit this year, Gov. Susana Martinez proposed whittling the rebate down to 15 percent. Instead, lawmakers instituted a "rolling cap," which preserves the 25 percent rebate but limits the once unlimited payout to $50 million a year on a first come, first served basis.

The new law, which takes effect July 1, also alters how the rebate is paid. Any tax credit worth between $2 million and $5 million, for example, is divided into two payments, the second of which comes a year after the first.

The biggest effect could fall on low-budget independent films. Arnold refers to it as an "unintended consequence."

Small films, which already struggle to raise funds, may not be able to afford to wait a year for the second half of the rebate, Arnold says—but high-budget corporate films should be fine.