Ds Moines TV-8 Article

Should Iowa Film Tax Program Get Second Chance?



DES MOINES, Iowa -- The push is under way to bring back the state's tax incentive program for films, but Gov. Chet Culver said he has no interest in giving the troubled program a second chance.

Five people were fired including the state's top two economic development officials after claims that millions in tax credits were misused.

The state Department of Economic Development resumed issuing tax credits for movie projects. Two were approved just last month, but right now there's little to indicate that one-way street from Hollywood to Iowa is about to reopen anytime soon.

"We're not going to be taken for suckers, people unforgivably exploited that program," said Culver.

Despite the past problems, many Iowans in the film industry still expect the program to return.

"If Iowa has a competitive film promotion program, a tax incentive program, we will get business. The past doesn't matter because it's all about the bottom line," said Kent Newman, of the Iowa Motion Picture Association.

Newman said no movie productions happen in any state without some sort of financial incentives. He said the state is headed in the right direction by carefully auditing the entire project before issuing tax credit, but it's only the first step.

"I think the state is ill prepared to respond to this as far as we know one person in revenue financing doing the audits, so taking a lot longer than we'd like to see," said Newman.

A spokeswoman from the IDED said that currently 45 movie projects are under contract and can move forward, while another 30 applications are approved, but haven't reached the contract stage.

"We don't think we're going to see much action at all from any of the projects that either had a contract or an agreement," said Newman.

Newman said the big reason the production companies initially signed on was for the 50 percent tax credit, which is now closer to 35 percent.

John Busbee worked on nine movies shot in Iowa in the past two years, including "The Crazies," shot in southwestern Iowa. He said he saw first hand the money pouring into surrounding communities.

"The production company spends $250,000 a day -- not bad," said Busbee.

The Iowa Motion Picture Association said it would work with either Chet Culver or Terry Branstad following the November election, along with the legislature, to submit a revised film tax credit bill in January to see if they can get it passed during the next legislative session.