From Greensboro, N C News-Record

Lawmakers try to resolve incentive bills
Friday, July 9, 2010

By Mark Binker
Staff Writer


RALEIGH — Expanding the tax credits offered to computer data centers and film productions are among the provisions in a pair of economic incentive bills that lawmakers hope to pass before adjourning for the year.

Leaders at the General Assembly say they hope to leave town on Saturday.

They have been pressing to finish a handful of critical bills before them.

Under the film credit bill, the maximum amount a production could receive would rise from $7.5 million to $20 million, depending on how much the production spent.

Gov. Bev Perdue has called for lawmakers to pass this measure after visiting Hollywood earlier this year.

North Carolina’s film credit is “refundable,” meaning that if filmmakers are due more credits than they would have to pay in taxes, the state will write them a check.

Since 2006, N.C. Department of Revenue officials said, the state has issued roughly $44 million in credits. Of that amount, $25 million in cash refunds have gone to filmmakers who paid no income taxes to the state.

Expanding the credit likely would mean even more money would be refunded directly to film companies.

“They are a cash deal. But just last year alone, $148 million was spent by the film industry in North Carolina,” said Rep. Bill Owens, an Elizabeth City Democrat helping to negotiate a House-Senate compromise on the bill that contains the film incentives.

Owens said North Carolina either needs to expand its credits to keep up with other states or “we should just give up on the business.”

Rep. John Blust, a Greensboro Republican, said North Carolina should not be taking money from middle-class people and giving it to filmmakers and their highly compensated stars.

He pointed to the Renee Zellweger and George Clooney movie “Leatherheads,” which was filmed in the Triad.
“Did that movie do anything permanent for Greensboro?” Blust asked.

He added that the film credit “has reached the point where the research shows it doesn’t pay. You’ve got to go so high, the state loses money by doing it.”

As of late Thursday, lawmakers were trying to settle differences between the House and Senate on the bill.

Also late Thursday, the House voted 79-30 to pass a separate incentives bill that contains tax breaks for data centers such as the one Alamance County is trying to attract. The facility is widely reported to be connected to the software giant Microsoft.

The bill expands sales-tax breaks on equipment and electricity for companies in exchange for them making a certain amount of investment.

“This is corporate welfare,” Rep. Paul “Skip” Stam said, urging his colleagues to vote against the measure.

However, other lawmakers said it was needed to lure jobs to the state.

The Senate still must approve the bill, but it is likely to pass. Senators passed it on a 43-4 vote when they first looked at the measure.