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New Mexico Rejects Alec Baldwin’s ‘Rust’ Film Incentive Application

Producers of the Alec Baldwin-starrer “Rust” are facing significant challenges in finding distributors for the film, largely due to the tragic death of the movie’s cinematographer, Halyna Hutchins. Hutchins was fatally shot by Baldwin during a rehearsal in 2021, as reported by The Hollywood Reporter.

Adding to their struggles, the production will have to proceed without approximately $1.6 million in economic incentives from New Mexico. The state’s tax authorities have denied Rust Movie Productions’ application for these funds, according to documents obtained by the Associated Press. The producers have until late July to appeal this decision.

Meanwhile, Alec Baldwin is set to go on trial next week for involuntary manslaughter in connection with Hutchins’ death. Baldwin, who was both the lead actor and a co-producer of the film, was handling a gun during a rehearsal when it accidentally discharged, killing Hutchins and injuring the film’s director, Joel Souza.

Melina Spadone, Rust’s lawyer, stated that the production team was relying on the state’s tax incentives to cover the legal settlement intended for Hutchins’ family—her son and her widower, Matthew. “The denial of the tax credit has disrupted those financial arrangements,” Spadone said. She also facilitated the 2022 settlement that allowed the production of “Rust” to restart in Montana, featuring some of the original cast and crew, including Baldwin and Souza. Production wrapped last year.

While the terms of the settlement are confidential, producers indicated they completed the film to honor Hutchins’ artistic vision and provide financial support for her son. However, the court documents reveal that settlement payments have been delayed for almost a year. Matthew Hutchins’ lawyer is currently evaluating the next steps, which could include resuming a wrongful death lawsuit against the production. Requests for comments from Hutchins’ lawyers went unanswered.

Baldwin’s upcoming trial and the denied tax incentive application have financial implications for New Mexico taxpayers as well. The Santa Fe district attorney’s office noted that the state has spent $625,000 prosecuting cases related to the “Rust” incident as of April.

New Mexico’s film incentives program is one of the most generous in the United States, offering a direct rebate of 25% to 40% to attract movie projects and associated employment and infrastructure investments. Only Georgia offers a larger percentage of incentives, in terms of the state budget.

Part of New Mexico’s incentive program includes an option for producers to assign the state’s payment to a financial institution, thereby allowing them to use the rebate as collateral to underwrite the production. Production companies often combine anticipated rebates with projected film income to secure loans. Notable beneficiaries of this program include the 2011 movie “Cowboys & Aliens” and the “Breaking Bad” spinoff series “Better Call Saul.”

New Mexico will also host the upcoming film “The Lost Bus,” starring Matthew McConaughey and America Ferrara. The film is about a group of students who were rescued during a 2018 wildfire in Paradise, California.

Regarding Rust Movie Productions’ denied application, New Mexico Taxation and Revenue Department spokesperson Charlie Moore declined to comment specifically. However, Moore did mention that in the most recent 12-month period, 43 film incentive applications have either been fully or partially denied.

In January, the New Mexico Film Office issued a memo approving Rust’s eligibility to apply for the incentive program. However, final eligibility for specific expenses lies with the taxation officials. Spadone expressed surprise at the application’s denial, suggesting it could undermine confidence in the state’s tax program.

The denial is not entirely unexpected given the negative publicity surrounding “Rust” since Hutchins’ death. The film’s armorer, Hannah Gutierrez-Reed, was found guilty of involuntary manslaughter in March. Next week, Baldwin will face trial on similar charges.

It seems logical that New Mexico would deny the financial incentives, especially with a member of the production team having been found guilty of a crime and another high-profile member awaiting trial for the same charges. While Rust’s production company can still appeal the decision, the ongoing legal battles don’t bode well for their financial prospects. The producers urgently need funds to pay the settlement to Hutchins’ family, but with no interested studios or film distribution firms, they may need to look for alternative solutions.

Source: The Hollywood Reporter, Associated Press