New Mexico
New Mexico denies Alec Baldwin's ‘Rust’ movie $1.6m tax incentive
Producers of the western movie “Rust” may have to forgo a robust economic incentive as they try to sell the film to distributors and fulfill financial obligations to the immediate family of a cinematographer who was fatally shot by Alec Baldwin during rehearsal in 2021.
New Mexico tax authorities denied an application this spring by Rust Movie Productions for incentives worth as much as $1.6 million, according to documents obtained by The Associated Press. A late July deadline for producers to appeal the decision is approaching.
Meanwhile, Baldwin is scheduled to go on trial starting next week on an involuntary manslaughter charge in Halyna Hutchins’ death. The lead actor and co-producer of “Rust” was pointing a gun at Hutchins when it went off, killing her and wounding director Joel Souza.
Melina Spadone, an attorney representing the production company, said the film production tax incentive was going to be used to finance a legal settlement between producers and Hutchins’ widower and son.
“The denial of the tax credit has disrupted those financial arrangements,” said Spadone, a New York- and Los Angeles-based senior counsel at Pillsbury Winthrop Shaw Pittman. She helped broker the 2022 settlement that rebooted the stalled production of “Rust” in Montana with some of the original cast and crew, including Baldwin and Souza. Filming wrapped up last year.
Terms of the settlement are confidential, but producers say finishing the film was meant to honor Hutchins’ artistic vision and generate money for her young son.
Court documents indicate that settlement payments are up to a year late, as attorneys for Hutchins’ widower determine “next steps” that include whether to resume wrongful death litigation or initiate new claims. Legal representatives for Matthew Hutchins did not respond to telephone and email messages seeking comment.
The prosecution of Baldwin and the film’s tax incentive application both have financial implications for New Mexico taxpayers. The Santa Fe district attorney’s office says it spent $625,000 on “Rust”-related prosecution through the end of April.
The state’s film incentives program is among the most generous in the nation, offering a direct rebate of between 25% and 40% on an array of expenditures to entice movie projects, employment and infrastructure investments. As a percentage of the state budget, only Georgia pays out more in incentives.
It includes a one-time option to assign the payment to a financial institution. That lets producers use the rebate to underwrite production ahead of time, often layering rights to the rebate and future movie income into production loans.
Among the beneficiaries of the rebate program are the 2011 movie “Cowboys and Aliens” and the TV series “Better Call Saul,” a spinoff of “Breaking Bad.” As for current productions, New Mexico is the backdrop for a new film starring Matthew McConaughey and America Ferrera about the rescue of students in a 2018 wildfire in the town of Paradise — the most destructive in California’s history.
Charlie Moore, a spokesperson for the New Mexico Taxation and Revenue Department, declined to comment specifically on the “Rust” application, citing concerns about confidential taxpayer information. Applications are reviewed for a long list of accounting and claim requirements.
During a recent 12-month period, 56 film incentive applications were approved and 43 were partially or fully denied, Moore said.
Documents obtained by AP show the New Mexico Film Office issued a memo in January to “Rust” that approved eligibility to apply for the tax incentive, in a process that involves accounting ledgers, vetting against outstanding debts and an on-screen closing credit to New Mexico as a filming location. Taxation officials have final say on whether expenses are eligible.
Spadone, the attorney for “Rust,” said the denial of the application is “surprising” and could disrupt confidence in the tax program with a chilling effect on rebate-backed loans that propel the local film industry.
Alton Walpole, a production manager at Santa Fe-based Mountainair Films who was not involved in “Rust,” said he faults the movie’s creators for seemingly cutting corners on safety but officials have an obligation to review its tax credit application based on legal and accounting principles only — or risk losing major projects to other states. Movies are inherently dangerous even without firearms on set, he noted.
“They’re going to say, ‘Wait, are we going to New Mexico? They could deny the rebate,’” Walpole said. “They’re watching every penny.”
“Popular opinion? I’d say don’t give them the rebate. But legally, I think they qualified for it all,” he said.
At least 18 states have enacted measures to implement or expand film tax incentives since 2021, while some have gone in the opposite direction and sought to limit the transferability and refundability of credit.
Under Democratic Gov. Michelle Lujan Grisham, New Mexico has raised annual spending caps and expanded the film tax credit amid a multibillion-dollar surplus linked to record oil and natural gas production. Film rebate payouts were $100 million in the fiscal year ending in June 2023 and are expected to rise to nearly $272 million by 2027, according to tax agency records and the Legislature’s budget and accountability office.
Democratic state Sen. George Muñoz has criticized the incentive program and asked whether taxpayers should be responsible for unforeseen expenses.
“If we’re going to do tax credits and there’s a problem on the film or the set, do they really qualify or do they disqualify themselves?” said Muñoz, chairman of the lead Senate budget writing committee.
“Rust” does not yet have a U.S. distributor as producers shop the newly completed movie at film festivals.
SANTA FE, N.M. – Gov. Michelle Lujan Grisham asked Attorney General Raúl Torrez to investigate whether any Drug Enforcement Administration agents broke state law when pills reached New Mexico streets.
In a statement, Lujan Grisham said, “make no mistake: the DEA knew people would die if these pills made it into New Mexico communities.”
The governor also shared a timeline from 2022 to 2025 that she said shows when she asked federal officials for help with New Mexico’s fentanyl crisis and violent crime.
Lujan Grisham said the first request came on June 21, 2022, when she wrote to then-Federal Bureau of Investigation Director Christopher Wray and asked for 50 additional federal agents.
She said she wrote to then-Attorney General Merrick Garland on Sept. 15, 2022, asking for more agents, resources and support for New Mexico law enforcement.
Lujan Grisham said she wrote Garland a second time on Aug. 8, 2023, with the same request.
What came next?
About a month later, Lujan Grisham said she sent Garland a third letter and said New Mexico needed more federal law enforcement to curb violent crime, drug trafficking and human trafficking.
She said her most recent request came on Sept. 4, 2025, when she wrote to former Attorney General Pam Bondi and again asked for additional agents and resources.
The governor’s statement says those requests span several years as she pressed the federal government for more help in New Mexico.
Full statement from Gov. Michelle Lujan Grisham:
“I am appalled by reporting this week by the Associated Press and Albuquerque Journal that revealed federal authorities made a deliberate decision to let hundreds of thousands of fentanyl pills flood into New Mexico communities, despite knowing that fentanyl is so lethal the White House has designated it a weapon of mass destruction.
Let me say that again: the Drug Enforcement Administration watched as 74,000 fentanyl pills were delivered to a mobile home park in Albuquerque, and they did nothing. And that’s just one transaction. Shockingly, the federal government stood by while monitoring shipments, tallying exact pill counts, and watching as these deadly drugs hit the streets.
There are no words to describe how reckless and dangerous these decisions were. Make no mistake: the DEA knew people would die if these pills made it into New Mexico communities, and the agency let it happen anyway. The result: hundreds of New Mexican parents burying their kids. Hundreds of New Mexican kids growing up without stable parents. All while the federal government stood by.
If the justification for letting these pills flood our communities was that it would somehow make New Mexico safer down the road through bigger eventual busts, the results say otherwise. New Mexico now leads the nation in the increase in overdose deaths for the second straight year, despite deaths dropping nationwide.
Today, I wrote to Attorney General Raúl Torrez and asked him to investigate whether any federal agents broke state law when they allowed lethal drugs to remain on our streets, and to prosecute anyone responsible — regardless of whether they are a federal agent or not.
I have spent years working across two administrations — writing letters, traveling to Washington, meeting directly with President Joe Biden and his cabinet, pushing for accountability, asking for more federal agents to be deployed to New Mexico to help fight this crisis.
- On June 21, 2022, I wrote to FBI Director Christopher Wray, imploring the FBI to assign no less than 50 additional agents to New Mexico to stem escalating drug trafficking and violent crime.
- On September 15, 2022, I wrote to Attorney General Merrick Garland, requesting that the Department of Justice provide additional federal agents, resources and support to New Mexico law enforcement. We asked the department to match the level of investigative, analytical, and technical resources the FBI had deployed in its Buffalo, NY surge.
- On August 8, 2023, I wrote again to Attorney General Garland, renewing my request that the DOJ expeditiously assign more federal agents to New Mexico.
- On September 7, 2023, I wrote to Attorney General Garland for a third time, reiterating my request once more federal law enforcement support to curb violent crime, drug and human trafficking.
- On September 4, 2025, I wrote to Attorney General Pam Bondi, once again requesting additional agents and resources.
I have declared the surge of drugs like fentanyl to be a public health emergency. I have deployed the National Guard to both Albuquerque and Española. While my administration was doing everything we could to stem the tide of fentanyl coming into our state, the federal government deliberately allowed it to flood in.
New Mexican lives are not the federal government’s cost of doing business.
I plan to hold the federal government accountable for this disaster and will explore every possible avenue of action against the federal government to right these wrongs.”
The Canyon Venado Fire has grown to 852 acres east of Clines Corners and crews say wind farms in the area are threatened.
CLINES CORNERS, N.M. – The Canyon Venado Fire has grown to 852 acres east of Clines Corners and crews say wind farms in the area are threatened.
The fire is burning just east of Clines Corners, south of Interstate 40.
It forced the closure of eastbound Interstate 40 at Clines Corners on Tuesday night. I-40 reopened Tuesday night. I-40 is back open but smoke still affects visibility.
“We’re on the side of I-40 so drivers have to be pretty cautious. As far as our establishment itself we’re pretty isolated by the freeway itself as a nice fire break,” said Lincoln Tarantino, Clines Corner general manager.
The fire has burned around 852 acres, up from just 20 at this time Monday.
Crews say the fire is not contained and wind farms in the area are threatened.
New Mexico
Feds allowed millions of fentanyl pills to ‘walk’ on New Mexico streets: DEA Whistleblower
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