Tax credit backers gird for battle: Groups organize, hire lobbyists
By Amy Lane
LANSING -- The pushback has begun over business tax credits.
Armed with economic data and mustering testimonials, lobbyists and grassroots strength, advocates are planning a fight to prevent elimination of Michigan's brownfield, historic preservation and film industry credits.
They hope to convince the Legislature, which has yet to wade into the issue, and the administration, which wants to wipe the slate clean of tax credits and create an improved business tax structure overall, to provide some limited incentives.
"The approach has been to first fix the environment for everybody before addressing special circumstances," said Lt. Gov. Brian Calley, when asked last week by Crain's why the administration didn't do cost-benefit analyses of such areas as the brownfield or historic pres-ervation tax credits before moving toward their elim-ination.
But tax credit advocates say they can make a compelling case, and they are preparing their arguments.
Historic tax credits
Take the Michigan Historic Preservation Network, an organization that has neither the financial resources nor the staff of many larger Lansing groups but has hired a lobbyist and is banding with other organizations to retain a historic tax credit it says has reached every corner of the state, from Detroit's Westin Book Cadillac hotel to Traverse City's City Opera House to Benton Harbor's 1920s-era Fidelity Building, a central long-vacant retail and office building rehabilitated into senior citizen apartments.
"I think this will be a tremendous battle," said Executive Director Nancy Finegood. "But I think we can prove the economic benefit as well as the tangential benefit to the communities."
The return on state tax dollar investment, according to the network: Some $138 million in credits have helped leverage nearly $1.5 billion in rehabilitation activity that generated 36,000 direct jobs. Because the tax credit is tied to a similar federal historic credit, the Michigan credit has also leveraged $251 million in federal dollars, the network says.
ArtServe Michigan and its web of more than 10,000 advocates plan to aid the network, as does the Community Economic Development Association of Michigan. The association has set up a link on its website for people to share brownfield, historic and some other tax credit development stories -- information that the association and historic preservation network hope to relay to lawmakers. The network also has hired lobbyist Mike Frederick, president of The Frederick Group in Lansing.
Legislative scrutiny awaits
The Legislature has not yet tackled credits, but they've been on the radar screen in both the House and the Senate.
Matt Marsden, press secretary to Senate Majority Leader Randy Richardville, R-Monroe, said the Senate Republican caucus is focused on poring over the governor's proposed budget, but "there will be a discussion of the tax credits." He said in that process there needs to be a cost-benefit analysis of the credits and "a look at all the credits and how they fared."
Gov. Rick Snyder believes an improved business tax structure trumps the need for widespread tax incentives.
He proposes to eliminate the Michigan Business Tax and its accompanying array of credits and incentives and replace them with a new 6 percent corporate income tax on "C" corporations. The governor says the plan would result in a nearly $1.8 billion tax cut for business and a simpler, fairer and more competitive tax structure.
Speaking to the Michigan Economic Developers Association last week in Lansing, Calley said that in looking at the Michigan tax system, "we see a system riddled with favoritism," one that "assumes that the operating environment is so bad" that the state has to provide incentives.
"And so what we proposed is the elimination of all favoritism in the tax system," Calley said.
The state still would have a pot of money to use for economic development incentives, on projects like brownfield or historic redevelopment. Calley said the money, in the form of grants, could be used in times when "it's important to be opportunistic."
The amount of available aid would be far less than what's traditionally been doled out, but Calley said advocates then need to make a case before appropriations committees, as do other interests from areas like education, health care and cities.
Brownfield credits
Even before Snyder's budget came out Feb. 17, the chairman of the Michigan chapter of the National Brownfield Association was among those who met with top Snyder staff to advocate for the brownfield credits.
Chapter Chairman John Byl, partner in the Grand Rapids office of Warner Norcross & Judd LLP and co-chair of the law firm's economic incentives group, said the tax credit has been critical to the success of brownfield development and urban redevelopment. He said that in many ways it "has produced a long-term benefit for the state that outweighs the short-term cost of the credit."
Byl said that typically the private capital investment is at least 10 times the amount of the credit. Based on the amount of credits claimed, the Michigan chapter of the brownfield association says that some $409.3 million in tax credits over the past 10 years have aided an estimated $4.1 billion in investment and fostered 30,000 jobs and more than $120 million in new annual property tax revenue.
The data has been shared with the governor's office. Byl said the chapter board wants to work with the Legislature and administration to preserve the credit or, if that's not possible, to devise a replacement program.
The group is also aligning with others, such as the Michigan Municipal League. Andy Schor, the league's assistant director of state affairs, said the league plans to show lawmakers the economic benefits of brownfield and historic tax credits, particularly in lawmakers' districts.
Film credits
Others that have lawmakers on their lists are in the film industry. Michigan Film First, a newly formed coalition of leaders in Michigan's film and television industry, has hired Lansing communications firm Truscott Rossman LLC in the fight to save film credits.
"We will have people contacting lawmakers, saying they were out of work, now have found a job, have training, and what that means is that they have a future," said firm principal and President John Truscott, who was press secretary to Gov. John Engler.
Truscott said the group plans to make use of a recent study by Ernst & Young which found that in 2010, for every $1 of film tax credit cost, $5.94 of sales by Michigan businesses were generated. Among the data in the study is that film productions employed 5,606 Michigan residents last year and paid them $66.9 million in wages and salaries. The study was commissioned by convention and visitors bureaus for Detroit, Grand Rapids, Ann Arbor and Traverse City.
"It's an extremely compelling case, and it represents the most recent numbers," Truscott said. "This is an industry that's been growing steadily ... and it has a lot of potential to help a lot of communities."
But state Rep. Tom McMillin, R-Rochester Hills, a critic of the credit, said the study doesn't take into consideration that money given as refundable tax credits "could otherwise have been used by all other Michigan businesses if we hadn't cut the checks."
And he said "paying 42 percent of any industry will result in losing money for taxpayers."
The incentive includes a refundable tax credit of up to 42 percent of a production company's expenditures here. As of the end of 2010, the state had paid $95 million in film tax credits, with an additional nearly $209.4 million approved but not yet disbursed, according to the Michigan Film Office.
The incentives are credited for attracting some $648 million in investment.
Screenwriter Jim Burnstein, coordinator of the screenwriting program in the University of Michigan Department of Screen Arts and Cultures and vice chairman of the state film office advisory council, said the film credit aids Snyder in goals to "reverse the brain drain, revitalize Detroit, and help small businesses create more jobs."
He said his students previously left the state after graduation, but the "migration stopped in its tracks" as students saw a burgeoning new industry in the state of which they wanted to be a part.
Burnstein was a leading proponent of the film incentive law and worked toward its passage.
He said elements of the credit can be reduced, but a proposed $25 million grant program to replace the film credits is "the death of that law."
Monday, February 28, 2011
Saturday, February 26, 2011
By John Schreier, Omaha World-Herald
Omaha World-Herald
Published Friday February 25, 2011
Payne: ‘Action!' on incentives
By John Schreier
WORLD-HERALD STAFF WRITER
Omaha native and Academy Award winner Alexander Payne wanted to film “Cedar Rapids,” a movie he helped produce, in Iowa, naturally.
The comedy about an insurance convention has earned good reviews, including from the New York Times and Rolling Stone magazine.
“But Iowa pulled its tax incentives,” Payne said. “We moved to Michigan.”
The filmmaker, who won an Oscar for best screenplay for “Sideways” in 2005, supports an effort by Lincoln State Sen. Colby Coash to offer financial incentives to companies that make movies in Nebraska.
Payne said he would be unable to attend Friday afternoon's hearing on Legislative Bill 99, so he wrote a letter in support of the bill to Coash.
Nebraska is one of just six states offering no tax breaks to companies that film in their states and hire local talent. Nebraska, Hawaii, Washington and Wyoming all are considering creating tax credits, while at the same time some states are re-evaluating their programs in light of budget deficits.
Iowa suspended its program in late 2009 after an owner of a Minneapolis company was charged with falsifying records in order to inflate incentive payments. The trial of Wendy Weiner Runge, who pleaded not guilty to charges of first-degree theft, first-degree fraudulent practices and ongoing criminal conduct, is under way in Des Moines.
Payne said Michigan's generous incentive program — which offers tax credits of up to 42 percent on expenditures — was a “godsend” for the movie.
“If they want to have any filmmaking there – and filmmaking is an industry where they drop a lot of money — they need to do this,” Payne said of the Nebraska lawmakers.
Critics of such incentive programs include Gov. Dave Heineman, who has said that Nebraskans deserve tax cuts before out-of-state movie directors. Studies are inconclusive on the benefits of such programs.
Similar bills have failed to move beyond first-round approval in the last three years.
LB 99 would offer incentives to movie production companies that spend $1 million in Nebraska, hire at least 10 Nebraskans and film part of the movies here.
Friday's hearing likely will lack the megawatt star power that is lobbying Hawaii. Cuba Gooding Jr. and Dan Aykroyd probably won't fly to Lincoln to testify.
Omaha actor John Beasley, who has appeared in a number of feature films and TV series, said he had planned to attend the hearing but was called away unexpectedly for a project in Atlanta.
Beasley is one of three people developing a movie about the life of Marlin Briscoe, an Omaha native and the first black starting quarterback in the NFL. The film about “one of our own” is an example of movies that could be made in Omaha and in Nebraska, Beasley said.
“It's good to shoot at home,” he said. “The tax credit would bring a lot of money into the area.”
Along with employing local actors and support personnel, movie companies hire caterers, rent lights and other equipment and just generally spend money, Beasley said.
“Nebraska is missing out on a lot. There are a lot of good, young filmmakers.”
Payne said tax incentives will not only help small-budget movies but will keep big-time films like “Up in the Air” from flying away.
The Oscar-winning film was set in Omaha, but the cast and crew were in Omaha for only two days. Most scenes were shot in other cities, including St. Louis and Miami, where tax incentives made it cheaper to film.
“I want to support my state,” Payne said. “Sometimes, you hear, ‘Why should we help Hollywood people?' We're helping our state and homegrown filmmakers who can tell the story of our state.”
Payne said he recently was flying from Omaha to Denver when a flight attendant recognized him.
“She and another flight attendant put their names and numbers on a Frontier Airlines napkin. It wasn't anything sleazy. They said, ‘Put us in your next movie as extras,'” he said.
Payne said if all goes as planned, he'll start filming his next movie in September or October. He said he always wants to return home to work, but the question of incentives makes that uncertain.
Even for his next project, he said, whose early, tentative title is “Nebraska.”
Published Friday February 25, 2011
Payne: ‘Action!' on incentives
By John Schreier
WORLD-HERALD STAFF WRITER
Omaha native and Academy Award winner Alexander Payne wanted to film “Cedar Rapids,” a movie he helped produce, in Iowa, naturally.
The comedy about an insurance convention has earned good reviews, including from the New York Times and Rolling Stone magazine.
“But Iowa pulled its tax incentives,” Payne said. “We moved to Michigan.”
The filmmaker, who won an Oscar for best screenplay for “Sideways” in 2005, supports an effort by Lincoln State Sen. Colby Coash to offer financial incentives to companies that make movies in Nebraska.
Payne said he would be unable to attend Friday afternoon's hearing on Legislative Bill 99, so he wrote a letter in support of the bill to Coash.
Nebraska is one of just six states offering no tax breaks to companies that film in their states and hire local talent. Nebraska, Hawaii, Washington and Wyoming all are considering creating tax credits, while at the same time some states are re-evaluating their programs in light of budget deficits.
Iowa suspended its program in late 2009 after an owner of a Minneapolis company was charged with falsifying records in order to inflate incentive payments. The trial of Wendy Weiner Runge, who pleaded not guilty to charges of first-degree theft, first-degree fraudulent practices and ongoing criminal conduct, is under way in Des Moines.
Payne said Michigan's generous incentive program — which offers tax credits of up to 42 percent on expenditures — was a “godsend” for the movie.
“If they want to have any filmmaking there – and filmmaking is an industry where they drop a lot of money — they need to do this,” Payne said of the Nebraska lawmakers.
Critics of such incentive programs include Gov. Dave Heineman, who has said that Nebraskans deserve tax cuts before out-of-state movie directors. Studies are inconclusive on the benefits of such programs.
Similar bills have failed to move beyond first-round approval in the last three years.
LB 99 would offer incentives to movie production companies that spend $1 million in Nebraska, hire at least 10 Nebraskans and film part of the movies here.
Friday's hearing likely will lack the megawatt star power that is lobbying Hawaii. Cuba Gooding Jr. and Dan Aykroyd probably won't fly to Lincoln to testify.
Omaha actor John Beasley, who has appeared in a number of feature films and TV series, said he had planned to attend the hearing but was called away unexpectedly for a project in Atlanta.
Beasley is one of three people developing a movie about the life of Marlin Briscoe, an Omaha native and the first black starting quarterback in the NFL. The film about “one of our own” is an example of movies that could be made in Omaha and in Nebraska, Beasley said.
“It's good to shoot at home,” he said. “The tax credit would bring a lot of money into the area.”
Along with employing local actors and support personnel, movie companies hire caterers, rent lights and other equipment and just generally spend money, Beasley said.
“Nebraska is missing out on a lot. There are a lot of good, young filmmakers.”
Payne said tax incentives will not only help small-budget movies but will keep big-time films like “Up in the Air” from flying away.
The Oscar-winning film was set in Omaha, but the cast and crew were in Omaha for only two days. Most scenes were shot in other cities, including St. Louis and Miami, where tax incentives made it cheaper to film.
“I want to support my state,” Payne said. “Sometimes, you hear, ‘Why should we help Hollywood people?' We're helping our state and homegrown filmmakers who can tell the story of our state.”
Payne said he recently was flying from Omaha to Denver when a flight attendant recognized him.
“She and another flight attendant put their names and numbers on a Frontier Airlines napkin. It wasn't anything sleazy. They said, ‘Put us in your next movie as extras,'” he said.
Payne said if all goes as planned, he'll start filming his next movie in September or October. He said he always wants to return home to work, but the question of incentives makes that uncertain.
Even for his next project, he said, whose early, tentative title is “Nebraska.”
Friday, February 25, 2011
From Rachel Abrams at Variety
2,000 protest Michigan Gov.'s film cuts
Albom keynotes demonstration against Snyder's proposal
By Rachel Abrams
More than 2,000 people gathered in Michigan Thursday to protest Gov. Rick Snyder's proposed cuts to the state's tax incentive program for the entertainment biz, according to reps for film finance firm Michigan Production Capital.
Ken Droz, a private consultant and former communications director for the Michigan Film office, organized the event at a conference center outside of Detroit.
Author and columnist Mitch Albom, a vocal opponent of the governor's proposal, is the keynote speaker.
The proposal, part of a $1.8 billion budget cut for the state, outlines a plan to cap Michigan's tax incentive at $25 million annually. At 42%, Michigan's refundable tax credit is among the nation's most generous, and authorized more than $160 million in rebates last year alone.
The protest represents a nervous climate among Michigan's film and service industries. The current program, in place since April 2008, has contributed to the opening of several studios and post-production houses which service the dozens of productions which have come in each year.
"Just saying what he said I think scared a lot of movies away," said Michigan-based Pixofactor Entertainment co-founder and CEO Sean Hurwitz.
Since Snyder's announcement last week, several productions, including "The Avengers," have pulled out of filming in the state.
According to reps for film offices in other states that offer substantial tax incentives, several stuios and post-production houses with shops in Michigan have inquired about moving their shops there.
While the legislature likely won't vote on Snyder's bill until the summer, his office has the power to limit the program.
Albom keynotes demonstration against Snyder's proposal
By Rachel Abrams
More than 2,000 people gathered in Michigan Thursday to protest Gov. Rick Snyder's proposed cuts to the state's tax incentive program for the entertainment biz, according to reps for film finance firm Michigan Production Capital.
Ken Droz, a private consultant and former communications director for the Michigan Film office, organized the event at a conference center outside of Detroit.
Author and columnist Mitch Albom, a vocal opponent of the governor's proposal, is the keynote speaker.
The proposal, part of a $1.8 billion budget cut for the state, outlines a plan to cap Michigan's tax incentive at $25 million annually. At 42%, Michigan's refundable tax credit is among the nation's most generous, and authorized more than $160 million in rebates last year alone.
The protest represents a nervous climate among Michigan's film and service industries. The current program, in place since April 2008, has contributed to the opening of several studios and post-production houses which service the dozens of productions which have come in each year.
"Just saying what he said I think scared a lot of movies away," said Michigan-based Pixofactor Entertainment co-founder and CEO Sean Hurwitz.
Since Snyder's announcement last week, several productions, including "The Avengers," have pulled out of filming in the state.
According to reps for film offices in other states that offer substantial tax incentives, several stuios and post-production houses with shops in Michigan have inquired about moving their shops there.
While the legislature likely won't vote on Snyder's bill until the summer, his office has the power to limit the program.
Thursday, February 24, 2011
Jay and I Go Again to the Iowa Capitol, Plus More...
Jay Villwock and Dave Thrasher and I met with a top former film official today and then Jay and I went to the Capitol and delivered a thank you letter to Governor Branstad and Lt. Governor Reynolds, a thank you for their speaking with us yesterday.
While there, Iowa Senator Dennis Black stopped us and told us he was behind us in the film effort.
I spoke with Richard Thornton, Motion Picture of America Ass'n lobbyist, and Jay and I also spoke with a few other folks.
I'm getting very positive vibes from both sides of the aisle. I am fully confident that the Iowa Film Office will be revived and that films will return to Iowa. Hard to believe I know, but just watch.
Tuesday, February 22, 2011
Jay Villwock & I @ Today's Town Hall Meeting
Today Iowa Governor Terry Branstad and Lt. Gov. Kim Reynolds held one of a series of many Town Hall Meetings at the West Des Moines City Hall. Most of the comments from the packed room related to taxes, but towards the end of the event Jay told the governor that bringing the Iowa Film Office back was vitally important and that films made here meant lots of jobs for Iowans.
The governor said he knew there were serious problems with the Iowa Film Office, but wanted it to be revived and moved into the Iowa Cultural Affairs Department. I mentioned that former IFO director Wendol Jarvis had been working hard with specific plans regarding how the IFO could be improved and the governor said that Wendol would his pick to head a renewed IFO.
After the formal questions and answers Jay and I spoke one-to-one with both Governor Branstad and Lt. Governor Kim Reynolds, who both reaffirmed their firm interest and support for the Iowa Film Office.
The governor said he knew there were serious problems with the Iowa Film Office, but wanted it to be revived and moved into the Iowa Cultural Affairs Department. I mentioned that former IFO director Wendol Jarvis had been working hard with specific plans regarding how the IFO could be improved and the governor said that Wendol would his pick to head a renewed IFO.
After the formal questions and answers Jay and I spoke one-to-one with both Governor Branstad and Lt. Governor Kim Reynolds, who both reaffirmed their firm interest and support for the Iowa Film Office.
Monday, February 21, 2011
by Juliann Vachon, The State (South Carolina)
Business
Monday, Feb. 21, 2011
Competition keen to lure filmmakers
By JULIANN VACHON - jvachon@beaufortgazette.com
BEAUFORT — Beaufort International Film Festival organizers say they try hard every year to lure filmmakers to the event, make them feel welcome and show them the historic city and neighboring islands.
Their hope is to hear, “Wow, what a perfect location for a movie!”
But the festival, which wrapped up its fifth annual event Sunday, typically targets moviemakers with $2 million to $5 million to spend, not those with blockbuster budgets, festival executive director Ron Tucker said.
The reason: South Carolina’s financial incentives aren’t strong enough to compete with other states for big productions, he said.
“We’ve got to get the state onboard with those really good incentives, like Georgia, Michigan and Louisiana offer,” Tucker said. “Until that happens, our target is the young, up-and-coming filmmaker who can pull off a $2-, $3-, $4-, $5-million film.”
Unlike other states that offer tax credits, South Carolina’s film incentive program provides cash rebates — 20 percent for South Carolina residents’ wages and 30 percent for supplies purchased from in-state businesses — for productions that film and spend at least $1 million in the state.
In comparison, Georgia grants a flat tax credit of 20 percent with a minimum $500,000 investment, plus an additional 10 percent for including a Georgia logo in the finished product.
“We can’t compete, especially with Georgia being so aggressive and us sitting right next to Savannah,” said Carlotta Ungaro, president and CEO of the Beaufort Regional Chamber of Commerce.
South Carolina’s rebate levels actually stand up to other states, according to Carolina Film Alliance president Richard Futch, who also is the casting director for “Army Wives,” a TV show filmed in Charleston. What’s missing, he said, is long-term legislation ensuring state legislators won’t lower those percentages year to year.
That lack of assurance holds the state back from scoring the “Disneys of the world,” Futch said.
“Large companies plan several years in advance, and they’re not going to come here if they don’t know what percentages they can expect from one year to the next,” Futch said.
The film industry’s most recent scare came last year when former Gov. Mark Sanford tried to reduce film incentives as part of his budget vetoes. The Senate voted 28-13 to override him, overcoming opposition from Sen. Tom Davis, R-Beaufort.
Davis said then his vote was partly because the provision would “essentially direct a state agency to spend tax dollars unwisely.” He referred to a 2008 College of Charleston analysis that said for every $1 spent by the state in film industry rebates, only 19 cents was recovered in general revenue.
Futch urged Davis and other critics to look at a broader picture.
“You have to look at the services side,” he said. “Look at all the hotel rooms booked, the food purchased, the paint and lumber bought locally. ... That’s money going right into the local community.”
A University of South Carolina report, also published in 2008, found that every dollar paid out as part of the supplier rebate generated $3.68 of in-state spending.
Incentive levels make or break deals in this state and others, Ungaro said.
She pointed to the Robert Redford movie “The Conspirators,” scheduled for release this year.
Scouts recommended Charleston and Beaufort for the filming site, Ungaro said, but the movie’s financial backers insisted it go to Savannah to take advantage of the incentives Georgia offers. And it did.
When an enhanced incentives program began in 2006, South Carolina lured seven movies and two television features after attracting only two movies the year before, according to a November article in The (Charleston) Post and Courier.
The next year, the state reduced wage rebates for nonresident film workers from 20 percent to 10 percent, with a $3,500 cap per job. It also mandated that production companies get a 30 percent rebate on supply costs only if they buy from South Carolina businesses, The Post and Courier reported.
“A film can locate anywhere it wants,” Ungaro said. “It’s all about the money.”
Monday, Feb. 21, 2011
Competition keen to lure filmmakers
By JULIANN VACHON - jvachon@beaufortgazette.com
BEAUFORT — Beaufort International Film Festival organizers say they try hard every year to lure filmmakers to the event, make them feel welcome and show them the historic city and neighboring islands.
Their hope is to hear, “Wow, what a perfect location for a movie!”
But the festival, which wrapped up its fifth annual event Sunday, typically targets moviemakers with $2 million to $5 million to spend, not those with blockbuster budgets, festival executive director Ron Tucker said.
The reason: South Carolina’s financial incentives aren’t strong enough to compete with other states for big productions, he said.
“We’ve got to get the state onboard with those really good incentives, like Georgia, Michigan and Louisiana offer,” Tucker said. “Until that happens, our target is the young, up-and-coming filmmaker who can pull off a $2-, $3-, $4-, $5-million film.”
Unlike other states that offer tax credits, South Carolina’s film incentive program provides cash rebates — 20 percent for South Carolina residents’ wages and 30 percent for supplies purchased from in-state businesses — for productions that film and spend at least $1 million in the state.
In comparison, Georgia grants a flat tax credit of 20 percent with a minimum $500,000 investment, plus an additional 10 percent for including a Georgia logo in the finished product.
“We can’t compete, especially with Georgia being so aggressive and us sitting right next to Savannah,” said Carlotta Ungaro, president and CEO of the Beaufort Regional Chamber of Commerce.
South Carolina’s rebate levels actually stand up to other states, according to Carolina Film Alliance president Richard Futch, who also is the casting director for “Army Wives,” a TV show filmed in Charleston. What’s missing, he said, is long-term legislation ensuring state legislators won’t lower those percentages year to year.
That lack of assurance holds the state back from scoring the “Disneys of the world,” Futch said.
“Large companies plan several years in advance, and they’re not going to come here if they don’t know what percentages they can expect from one year to the next,” Futch said.
The film industry’s most recent scare came last year when former Gov. Mark Sanford tried to reduce film incentives as part of his budget vetoes. The Senate voted 28-13 to override him, overcoming opposition from Sen. Tom Davis, R-Beaufort.
Davis said then his vote was partly because the provision would “essentially direct a state agency to spend tax dollars unwisely.” He referred to a 2008 College of Charleston analysis that said for every $1 spent by the state in film industry rebates, only 19 cents was recovered in general revenue.
Futch urged Davis and other critics to look at a broader picture.
“You have to look at the services side,” he said. “Look at all the hotel rooms booked, the food purchased, the paint and lumber bought locally. ... That’s money going right into the local community.”
A University of South Carolina report, also published in 2008, found that every dollar paid out as part of the supplier rebate generated $3.68 of in-state spending.
Incentive levels make or break deals in this state and others, Ungaro said.
She pointed to the Robert Redford movie “The Conspirators,” scheduled for release this year.
Scouts recommended Charleston and Beaufort for the filming site, Ungaro said, but the movie’s financial backers insisted it go to Savannah to take advantage of the incentives Georgia offers. And it did.
When an enhanced incentives program began in 2006, South Carolina lured seven movies and two television features after attracting only two movies the year before, according to a November article in The (Charleston) Post and Courier.
The next year, the state reduced wage rebates for nonresident film workers from 20 percent to 10 percent, with a $3,500 cap per job. It also mandated that production companies get a 30 percent rebate on supply costs only if they buy from South Carolina businesses, The Post and Courier reported.
“A film can locate anywhere it wants,” Ungaro said. “It’s all about the money.”
by Katherine Yung, Detroit Free Press
Dan Gearig says he would not have a thriving business without Michigan's film tax incentives.
He and his business partner, Kurt Peters, are hiring workers and buying trucks as they grow Chow Catering, a Madison Heights-based film caterer.
"We wouldn't exist without the incentives," Gearig said from Cincinnati, where he was working on the set of the new George Clooney movie "Ides of March," which also will be filming in Michigan. "If the incentives leave, so will Chow Catering."
Gearig's is one of many companies in Michigan that have benefited from the state's movie tax credits. A study released today that was conducted by the accounting firm Ernst & Young says the incentives generate nearly $6 in economic activity for every dollar spent on the tax breaks.
The study's release comes as Michigan's movie-making business stands on the brink of extinction.
Gov. Rick Snyder has proposed ending the current tax breaks for filmmakers as part of a broad elimination of special tax credits and exemptions. He plans to allocate $25 million a year for new movie incentives, far below the $60 million paid out to production companies last year.
The study shows that the production of movies and TV shows in Michigan during 2009 and 2010 generated 6,491 full-time equivalent jobs in the state and $812 million in economic output.
"There is significant growth and economic activity," said Larry Alexander, CEO and president of the Detroit Metro Convention & Visitors Bureau, which teamed up with its counterparts in Ann Arbor, Grand Rapids and Traverse City to commission the study late last year. "This is an industry that has not had a chance to mature (here) yet."
Among the study's findings:
• Production companies spent $532 million in the state in 2009 and 2010. Of that amount, nearly 60%, or $310.5 million, impacted Michigan's economy.
• Eighty percent of the 4,656 indirect jobs that the movie business has created in Michigan have occurred in five industries: food services, business services, rentals and repairs, personal services and retail.
• The net cost of the tax credits awarded during 2009 and 2010 totaled $137 million. Taxes and fees generated from movie activity, plus reduced unemployment benefits because the filming creates jobs, offset the state's costs, the study says. According to the Michigan Film Office, the state has awarded $304 million in film tax credits since April 2008 and has paid out $96 million so far.
• Film productions paid Michigan residents $42.8 million in wages and salaries in 2009 and $66.9 million in 2010. That equates to an average annual salary of about $53,700 per full-time equivalent employee.
• The average film production in Michigan lasted 90 days in 2009 and 89 days in 2010.
The state's nearly 3-year-old movie tax breaks are the most generous in the nation, covering up to 42% of production expenses. But with the state facing a $1.8-billion budget deficit, Snyder's budget cutters are targeting the incentives.
John Nixon, Snyder's budget director, said Friday that the state must cap the tax breaks, which reduce money in Michigan's General Fund.
"It's creating economic activity, which is a good thing. But from a budgetary standpoint, it costs us money," he said.
"There is no question there is a cost to the state," Alexander said. "But it does add to the diversification of the state that we have talked about for so long."
The study is the first to show that subsidies for the movie industry have produced positive benefits in Michigan.
In September, the Senate Fiscal Agency released a report saying that the incentives only generate 10 cents in new tax revenue for every dollar paid out.
He and his business partner, Kurt Peters, are hiring workers and buying trucks as they grow Chow Catering, a Madison Heights-based film caterer.
"We wouldn't exist without the incentives," Gearig said from Cincinnati, where he was working on the set of the new George Clooney movie "Ides of March," which also will be filming in Michigan. "If the incentives leave, so will Chow Catering."
Gearig's is one of many companies in Michigan that have benefited from the state's movie tax credits. A study released today that was conducted by the accounting firm Ernst & Young says the incentives generate nearly $6 in economic activity for every dollar spent on the tax breaks.
The study's release comes as Michigan's movie-making business stands on the brink of extinction.
Gov. Rick Snyder has proposed ending the current tax breaks for filmmakers as part of a broad elimination of special tax credits and exemptions. He plans to allocate $25 million a year for new movie incentives, far below the $60 million paid out to production companies last year.
The study shows that the production of movies and TV shows in Michigan during 2009 and 2010 generated 6,491 full-time equivalent jobs in the state and $812 million in economic output.
"There is significant growth and economic activity," said Larry Alexander, CEO and president of the Detroit Metro Convention & Visitors Bureau, which teamed up with its counterparts in Ann Arbor, Grand Rapids and Traverse City to commission the study late last year. "This is an industry that has not had a chance to mature (here) yet."
Among the study's findings:
• Production companies spent $532 million in the state in 2009 and 2010. Of that amount, nearly 60%, or $310.5 million, impacted Michigan's economy.
• Eighty percent of the 4,656 indirect jobs that the movie business has created in Michigan have occurred in five industries: food services, business services, rentals and repairs, personal services and retail.
• The net cost of the tax credits awarded during 2009 and 2010 totaled $137 million. Taxes and fees generated from movie activity, plus reduced unemployment benefits because the filming creates jobs, offset the state's costs, the study says. According to the Michigan Film Office, the state has awarded $304 million in film tax credits since April 2008 and has paid out $96 million so far.
• Film productions paid Michigan residents $42.8 million in wages and salaries in 2009 and $66.9 million in 2010. That equates to an average annual salary of about $53,700 per full-time equivalent employee.
• The average film production in Michigan lasted 90 days in 2009 and 89 days in 2010.
The state's nearly 3-year-old movie tax breaks are the most generous in the nation, covering up to 42% of production expenses. But with the state facing a $1.8-billion budget deficit, Snyder's budget cutters are targeting the incentives.
John Nixon, Snyder's budget director, said Friday that the state must cap the tax breaks, which reduce money in Michigan's General Fund.
"It's creating economic activity, which is a good thing. But from a budgetary standpoint, it costs us money," he said.
"There is no question there is a cost to the state," Alexander said. "But it does add to the diversification of the state that we have talked about for so long."
The study is the first to show that subsidies for the movie industry have produced positive benefits in Michigan.
In September, the Senate Fiscal Agency released a report saying that the incentives only generate 10 cents in new tax revenue for every dollar paid out.
Thursday, February 17, 2011
Jay Villwock & I @ the Iowa Capitol Today
Today Jay Villwock and I had a long meeting with a top official in the newly-elected governor's office. I can tell you that although it will take time, the Iowa Film Office will return and that efforts are being made daily to make that happen.
We also met with one of Iowa film's strongest supporters, Senator Bill Dotzler, Jr., who is continuing to work in our behalf. There are some great ideas and good plans underway, but until the recent series of film trials are over we will have to be patient, which is not easy at all.
Jay and also met with Richard Thornton, Motion Picture Ass'n of America lobbyist, and with others, including Bill Wimmer, a lawyer who has gone to bat for us as well.
Saturday, February 12, 2011
The PA Film Office Web Site: Looks Nice
Government Incentives
FILM TAX CREDIT: THE PENNSYLVANIA FILM PRODUCTION TAX CREDIT PROGRAM
Pennsylvania offers a 25% Film Tax Credit to films that spend at least 60% of their total production budget in the Commonwealth. Eligible projects include: feature films, TV films, TV talk or game show series, TV commercials, and TV pilots or episodes intended as programming for a national audience. Applications can be filed up to 90 days prior to the start date of principal photography.
Step 1: Single Application
Applicants must complete the online Single Application and provide the information and documentation as set forth in the Program Guidelines. Please follow the step by step outline for completeing the Single Application. The outline is here.
Step 2: Film Tax Credit Application
Applicants must also complete the Film Tax Credit Application. Prior to sending the completed application, please attach a "budget top sheet" reflecting: total production expenses and qualified Pennsylvania expenses, and a statement indicating whether financing for the project has been secured or will be secured prior to the planned start date of principal photography.
Also, prior to mailing, a face-to-face or phone interview is required with the Director of the Pennsylvania FIlm Office. Applicants should contact the Film Office at 717-783-FILM.
Step 3: Monthly Progress Report
Following your acceptance of a Film Tax Credit offer, from pre-to-post-production, a Monthly Progress Report is due within five business days of the end of each month.
Step 4: Acknowledgement & PA Film Office Logo
In each print and electronic version of the project, the end credits should include an acknowledgement of the support provided by the Pennsylvania Film Office and use of its logo.
Step 5: Economic Impact Report
Within 60 days of completion of the production, a Final Production & Economic Impact Report must be submitted to the Pennsylvania Film Office. This report should be submitted simultaneously with your audit. Tax Credit certificates will not be issued until these reports are submitted and approved.
Step 6: Film Tax Credit Sale or Assignment Application & Instructions
Tax Credits may be applied against tax liability under the following Pennsylvania taxes (under Articles III, IV or VI of the Tax Reform Code of 1971): Personal Income Tax (but not tax withheld by an employer from an employee); Corporate Net Income Tax; and Capital Stock and Franchise Tax. Refer to the Film Tax Credit Sale or Assignment Application and Instructions for more information.
To view the Film Tax Credit guidelines and application you will need to download Adobe Acrobat Reader if it is not already installed on your computer. Click here to download Adobe Acrobat Reader.
For more information, please contact:
Pennsylvania Film Office
Jane Saul, Director
Phone: 717-783-3456
Email: jsaul@state.pa.us
www.filminpa.com
HOTEL OCCUPANCY SALES TAX EXEMPTION
In Pennsylvania, the hotel occupancy tax is exempt for feature film productions when hotel stays are in excess of 30 days. Film production companies should contact the Pennsylvania Film Office for more information.
FEE-FREE LOCATIONS
In Pennsylvania, film companies are not charged a fee or other location cost for the use of state-owned property when filming commercial motion pictures of any length except for the actual costs incurred by the affected state department or agency and for activities outside the normal course of business, such as demolition and/or construction projects totaling more than $1 million.
For more information, please contact:
Pennsylvania Film Office
Commonwealth Keystone Building, 4th Floor
Harrisburgh, PA 17120-0225
Phone: 717-783-FILM
Fax: 717-787-0687
FILM TAX CREDIT: THE PENNSYLVANIA FILM PRODUCTION TAX CREDIT PROGRAM
Pennsylvania offers a 25% Film Tax Credit to films that spend at least 60% of their total production budget in the Commonwealth. Eligible projects include: feature films, TV films, TV talk or game show series, TV commercials, and TV pilots or episodes intended as programming for a national audience. Applications can be filed up to 90 days prior to the start date of principal photography.
Step 1: Single Application
Applicants must complete the online Single Application and provide the information and documentation as set forth in the Program Guidelines. Please follow the step by step outline for completeing the Single Application. The outline is here.
Step 2: Film Tax Credit Application
Applicants must also complete the Film Tax Credit Application. Prior to sending the completed application, please attach a "budget top sheet" reflecting: total production expenses and qualified Pennsylvania expenses, and a statement indicating whether financing for the project has been secured or will be secured prior to the planned start date of principal photography.
Also, prior to mailing, a face-to-face or phone interview is required with the Director of the Pennsylvania FIlm Office. Applicants should contact the Film Office at 717-783-FILM.
Step 3: Monthly Progress Report
Following your acceptance of a Film Tax Credit offer, from pre-to-post-production, a Monthly Progress Report is due within five business days of the end of each month.
Step 4: Acknowledgement & PA Film Office Logo
In each print and electronic version of the project, the end credits should include an acknowledgement of the support provided by the Pennsylvania Film Office and use of its logo.
Step 5: Economic Impact Report
Within 60 days of completion of the production, a Final Production & Economic Impact Report must be submitted to the Pennsylvania Film Office. This report should be submitted simultaneously with your audit. Tax Credit certificates will not be issued until these reports are submitted and approved.
Step 6: Film Tax Credit Sale or Assignment Application & Instructions
Tax Credits may be applied against tax liability under the following Pennsylvania taxes (under Articles III, IV or VI of the Tax Reform Code of 1971): Personal Income Tax (but not tax withheld by an employer from an employee); Corporate Net Income Tax; and Capital Stock and Franchise Tax. Refer to the Film Tax Credit Sale or Assignment Application and Instructions for more information.
To view the Film Tax Credit guidelines and application you will need to download Adobe Acrobat Reader if it is not already installed on your computer. Click here to download Adobe Acrobat Reader.
For more information, please contact:
Pennsylvania Film Office
Jane Saul, Director
Phone: 717-783-3456
Email: jsaul@state.pa.us
www.filminpa.com
HOTEL OCCUPANCY SALES TAX EXEMPTION
In Pennsylvania, the hotel occupancy tax is exempt for feature film productions when hotel stays are in excess of 30 days. Film production companies should contact the Pennsylvania Film Office for more information.
FEE-FREE LOCATIONS
In Pennsylvania, film companies are not charged a fee or other location cost for the use of state-owned property when filming commercial motion pictures of any length except for the actual costs incurred by the affected state department or agency and for activities outside the normal course of business, such as demolition and/or construction projects totaling more than $1 million.
For more information, please contact:
Pennsylvania Film Office
Commonwealth Keystone Building, 4th Floor
Harrisburgh, PA 17120-0225
Phone: 717-783-FILM
Fax: 717-787-0687
Tuesday, February 8, 2011
from KOMO News.Com, by John Discepolo
OLYMPIA, Wash. -- The movie "Battle in Seattle"was based in Seattle, but shot in Vancouver, B.C.
"Twilight" was based in Forks, but shot in Oregon.
And state lawmakers say the trend must stop.
A state Senate bill proposed in Olympia encouarges to encourage television and movies companies to come to Washington state by offering them a bigger tax break.
"We need to do a lot more," said Sen. Jeanne Kohl-Welles, D-Seattle, who sponsored the bill. "Other states are taking advantage of the income, the revenue that comes into their state. We're not able to do that at this point."
Uder the bill, "Washington's motion picture competitiveness" would extend a program of tax credits to film and television makers who base their productions here.
The current program offers up to $3.5 million in business and occupation tax credits. The new bill would extend the program and double the amount of tax credits to $7 million a year, eventually tripling the amount by 2017.
"Bringing in more substantial work, especially series television -- that would provide a wealth of jobs to washington residents at higher rates of pay, pension and health," said Abby Dylan of Washington Filmworks.
But with the state facing a $4.6 billion budget shortfall, these tax breaks will be scrutinized.
The cost, according to the state Office of Financial Management, would be $55.6 million over the next six years.
"Up until now we've had a modest incentive program which has allowed us to have smaller films be shot here," said Carl spence of Seattle International Film Festival. "But to really get the biggest productions - to get sort of the big bang - and really make the difference,. we need this new initiative to pass."
Back in 2009, the state increased the film tax incentive from 20 to 30 percent. But that's only half of what's offered by British Columbia.
"Twilight" was based in Forks, but shot in Oregon.
And state lawmakers say the trend must stop.
A state Senate bill proposed in Olympia encouarges to encourage television and movies companies to come to Washington state by offering them a bigger tax break.
"We need to do a lot more," said Sen. Jeanne Kohl-Welles, D-Seattle, who sponsored the bill. "Other states are taking advantage of the income, the revenue that comes into their state. We're not able to do that at this point."
Uder the bill, "Washington's motion picture competitiveness" would extend a program of tax credits to film and television makers who base their productions here.
The current program offers up to $3.5 million in business and occupation tax credits. The new bill would extend the program and double the amount of tax credits to $7 million a year, eventually tripling the amount by 2017.
"Bringing in more substantial work, especially series television -- that would provide a wealth of jobs to washington residents at higher rates of pay, pension and health," said Abby Dylan of Washington Filmworks.
But with the state facing a $4.6 billion budget shortfall, these tax breaks will be scrutinized.
The cost, according to the state Office of Financial Management, would be $55.6 million over the next six years.
"Up until now we've had a modest incentive program which has allowed us to have smaller films be shot here," said Carl spence of Seattle International Film Festival. "But to really get the biggest productions - to get sort of the big bang - and really make the difference,. we need this new initiative to pass."
Back in 2009, the state increased the film tax incentive from 20 to 30 percent. But that's only half of what's offered by British Columbia.
From Az Capitol Times.Com
Arizona Capitol Times
Tax break bill aims to woo film studios to Arizona
By Richard Tackett - richard.tackett@azcapitoltimes.com
Published: February 7, 2011 at 10:59 am
A Republican legislator says if Arizona is ever going to regain its old reputation as a state that welcomes the film industry, it needs to be more appealing to big production studios that want to shoot here.
SB1159, sponsored by Sen. John Nelson, R-Glendale, would create tax incentives for film and television studios, as well as for multimedia studios crafting everything from video games to corporate training videos.
The Senate Economic Development and Jobs Creation Committee on Feb. 2, approved the bill 6-0, with one committee member absent. The bill heads to the Senate floor via the Rule Committee.
What distinguishes SB1159 from past incentive laws is that it requires a company to spend a significant amount of money on production within the state before it can apply to the Department of Revenue for a tax credit.
It’s a variation on a 2006 statute that expired last year. The tax credits disbursed under that statute caused the state to lose money, because Arizona was giving away more money than it collected in corporate and personal income taxes from the movie companies and the people they employed.
Nelson and other supporters of the bill said they hope new provisions in SB1159 prevent that kind of money-hemorrhaging. (See “How the tax credits would work,” this page.)
“We are really interested in getting production companies up and running,” Nelson said in committee, “because that’s where a lot of the money will come from.”
Detractors argue that carving out tax codes for specific industries is asking for trouble. Steve Voeller, president of the Arizona Free Enterprise Club, testified that the bill amounts to tax code manipulation.
“But the tax relief that occurs when all rates are reduced across the board is not tax code manipulation,” Voeller said. “It’s not a new credit; it doesn’t favor one industry, one company, one activity or one behavior over someone else’s.”
Speaking directly to the legislators, Voeller warned of possible political consequences for passing the bill.
“You’d have to go back to your districts and defend why they need to pay higher taxes so that film producers do not,” he said.
Nelson said in an interview that although projections for the bill’s effect on the state general fund are unknown at this time, the aim of the bill is to have the state turn a profit.
“The goal obviously is to have a positive impact, because we want to see the industry grow,” Nelson said. “We’ve tried to adapt the positives from other states, recognizing the fact that they’ve been successful now because of what they’ve done. If we’re right and it works, this thing is going to be positive on the general fund.”
Barry Aarons, a lobbyist representing Tucson film companies, said that the argument against picking “winning and losing” industries is less important than stimulating the state’s economy.
“I have an alternative way to look at that,” Aarons told the committee. “Mine is that we look for the opportunities that create the greatest opportunity for economic development. That’s what this bill does.”
Nelson concluded his testimony by saying that Arizona shouldn’t wait much longer to re-institute some kind of tax credit for in-state multimedia production, or the companies will stay elsewhere.
“When the sun set [on the statute], they quit looking at us,” he said. “The sooner we get this going, the sooner they’ll be back and coming across from California rather than flying over us going to New Mexico.”
How the tax credits would work
Under SB1159, production companies could get 20 percent of their individual and corporate income taxes back if their production spends at least $250,000.
They would qualify for an additional 5 percent refund if, for at least half of the production, they use a “privately funded production facility” that meets the following requirements:
• At least 50 percent of the full-time employees of the facility are Arizona residents.
• The facility must have an infrastructure valued at $50 million or more.
The total credit, or amount of money that studios can see a return on, will not exceed $15 million.
Tax break bill aims to woo film studios to Arizona
By Richard Tackett - richard.tackett@azcapitoltimes.com
Published: February 7, 2011 at 10:59 am
A Republican legislator says if Arizona is ever going to regain its old reputation as a state that welcomes the film industry, it needs to be more appealing to big production studios that want to shoot here.
SB1159, sponsored by Sen. John Nelson, R-Glendale, would create tax incentives for film and television studios, as well as for multimedia studios crafting everything from video games to corporate training videos.
The Senate Economic Development and Jobs Creation Committee on Feb. 2, approved the bill 6-0, with one committee member absent. The bill heads to the Senate floor via the Rule Committee.
What distinguishes SB1159 from past incentive laws is that it requires a company to spend a significant amount of money on production within the state before it can apply to the Department of Revenue for a tax credit.
It’s a variation on a 2006 statute that expired last year. The tax credits disbursed under that statute caused the state to lose money, because Arizona was giving away more money than it collected in corporate and personal income taxes from the movie companies and the people they employed.
Nelson and other supporters of the bill said they hope new provisions in SB1159 prevent that kind of money-hemorrhaging. (See “How the tax credits would work,” this page.)
“We are really interested in getting production companies up and running,” Nelson said in committee, “because that’s where a lot of the money will come from.”
Detractors argue that carving out tax codes for specific industries is asking for trouble. Steve Voeller, president of the Arizona Free Enterprise Club, testified that the bill amounts to tax code manipulation.
“But the tax relief that occurs when all rates are reduced across the board is not tax code manipulation,” Voeller said. “It’s not a new credit; it doesn’t favor one industry, one company, one activity or one behavior over someone else’s.”
Speaking directly to the legislators, Voeller warned of possible political consequences for passing the bill.
“You’d have to go back to your districts and defend why they need to pay higher taxes so that film producers do not,” he said.
Nelson said in an interview that although projections for the bill’s effect on the state general fund are unknown at this time, the aim of the bill is to have the state turn a profit.
“The goal obviously is to have a positive impact, because we want to see the industry grow,” Nelson said. “We’ve tried to adapt the positives from other states, recognizing the fact that they’ve been successful now because of what they’ve done. If we’re right and it works, this thing is going to be positive on the general fund.”
Barry Aarons, a lobbyist representing Tucson film companies, said that the argument against picking “winning and losing” industries is less important than stimulating the state’s economy.
“I have an alternative way to look at that,” Aarons told the committee. “Mine is that we look for the opportunities that create the greatest opportunity for economic development. That’s what this bill does.”
Nelson concluded his testimony by saying that Arizona shouldn’t wait much longer to re-institute some kind of tax credit for in-state multimedia production, or the companies will stay elsewhere.
“When the sun set [on the statute], they quit looking at us,” he said. “The sooner we get this going, the sooner they’ll be back and coming across from California rather than flying over us going to New Mexico.”
How the tax credits would work
Under SB1159, production companies could get 20 percent of their individual and corporate income taxes back if their production spends at least $250,000.
They would qualify for an additional 5 percent refund if, for at least half of the production, they use a “privately funded production facility” that meets the following requirements:
• At least 50 percent of the full-time employees of the facility are Arizona residents.
• The facility must have an infrastructure valued at $50 million or more.
The total credit, or amount of money that studios can see a return on, will not exceed $15 million.
Sunday, February 6, 2011
from The Hudson Reporter.Com
Getting the film crews back to NJ
Gov. to decide future of tax credit that benefited Hudson County
by E. Assata Wright
Reporter staff writer Hudson Reporter
Feb 06, 2011
ROLL ’EM – The cast of “Law & Order: Special Victims Unit,” which typically filmed at a studio in North Bergen, shot on location in Secaucus last summer on Meadowlands Parkway.
Gov. Christopher Christie will this month decide the fate of a tax credit program for motion picture and television productions that film in New Jersey. Until the governor suspended this tax credit last year, several Hudson County-based productions, including “Law & Order: Special Victims Unit,” had benefited from the tax credit, which supporters say led to job creation and increased business for local vendors.
The state legislature last month approved the restoration and expansion of the tax credit program. Under bills passed by both the state Senate and Assembly, the program would offer 20 percent tax credits to television and film productions that shoot in New Jersey and meet set standards for hiring and local spending. The legislation would offer 22 percent tax credits for productions that film in the state’s Urban Enterprise Zones.
_____________
According to the MPAA, more than 250 people worked on the set of “Mercy.”
________
Last year Christie suspended the credit for Fiscal Year 2011 to close an $11 million budget gap and to take time to evaluate the merits of the program.
The governor has not indicated whether he’ll sign the new legislation, but he has in the past been skeptical that film tax credits create jobs and boost local economies.
Shows left for NY
The tax credit had been instrumental in attracting several TV productions to Hudson County, including the NBC hospital drama “Mercy,” which was shot in Secaucus, and NBC’s “Law & Order: Special Victims Unit,” which filmed throughout the county but was primarily shot in a studio in North Bergen.
After the film and television tax credit was suspended, both productions immediately fled to New York, which still offers its own tax incentive program.
New York is among 40 states and Washington, D.C. that offer economic perks to film productions that shoot in their jurisdictions, according to the Motion Picture Association of America (MPAA). Supporters of the credits argue that they produce jobs and support local businesses in the areas where filming takes place.
“The tax credit program sustains over 70,000 jobs in New York State. I think the New Jersey legislature recognizes the value of the credit,” said Vans Stevenson, MPAA’s senior vice president for State Government Affairs, last week. “This legislation would put New Jersey back in the mix for consideration.”
According to the MPAA, roughly 7,000 jobs were created in New Jersey through film productions in 2008, while state vendors and contractors reaped about $507 million in economic stimulus thanks to the film industry that same year.
Detractors of New Jersey’s film credits question these numbers and believe the state gave away more in credits than it got back in jobs and local spending.
After winning election, Gov. Christie’s own transition team recommended that the state’s film tax credit be extended and enhanced. Christie rejected these recommendations and last year asked State Treasurer Andrew Eristoff to review the economic impact of the program himself.
Eristoff has yet to release the outcome of his review.
Benefit for Hudson County?
Although television and film producers have long held an attraction for New Jersey, several high-profile shows in recent years have turned the spotlight on Hudson County. “Going as far back as the ’70s, we’ve had a lot of film projects come to New Jersey,” Steven Gorelick, executive director of the New Jersey Television and Motion Picture Commission, told the Reporter last summer. In the interview, conducted just weeks before the tax credit was suspended, he ironically credited the state’s tax credit program with helping attract production companies west of the Hudson River.
Until last July NBC had rented a 52,100-square-foot warehouse in North Bergen to shoot its popular cop drama “Law & Order: Special Victims Unit.”
Tom Fontana, producer of the HBO prison drama “Oz,” decided to create his fictional Oswald State Correctional Facility in an old warehouse is Bayonne. Much of the series, which ran from 1997 until 2003, was filmed around the now defunct Military Ocean Terminal base.
More recently, NBC producer Jim Bigwood selected the warehouse at 10 Enterprise Ave. in Secaucus to film his hospital drama “Mercy.” The show occasionally also filmed inside a private residence in Weehawken.
Within days of the tax credit’s suspension last year, NBC announced that both “Law & Order: SVU” and “Mercy” would relocate to New York. Although the network ultimately canceled the latter show, an attorney for NBC/Universal told state lawmakers last year the network could have still used its Secaucus studio for other film projects had the credit remained.
According to the MPAA, more than 250 people worked on the “Mercy” set, which is now rented to a dry goods company.
Approximately 200 people had worked at the “Law & Order” soundstage in North Bergen.
The clock’s ticking
Those in the film and television industry and other supporters of the tax credit are anxious.
When lawmakers passed legislation to restore and expand the film tax credit last month, Christie had 45 days to sign it into law, a timeline that will run out on Feb. 24.
The governor is unlikely to sign the legislation without first seeing Eristoff’s report, but that has yet to be released. In the meantime, Christie is expected to present his FY 2012 budget on Feb. 22.
Supporters of the film tax credit fear time may be running out for the credit to be restored in next year’s budget.
One lobbyist for the film industry said last week that many in the industry expect Gov. Christie to veto the tax credit legislation. Industry lobbyists are now focusing their energies, she said, on securing enough votes to override the governor’s veto and get the credit restored for FY 2012, which begins July 1, 2011.
Read more: Hudson Reporter - Getting the film crews back to NJ Gov to decide future of tax credit that benefited Hudson County
Gov. to decide future of tax credit that benefited Hudson County
by E. Assata Wright
Reporter staff writer Hudson Reporter
Feb 06, 2011
ROLL ’EM – The cast of “Law & Order: Special Victims Unit,” which typically filmed at a studio in North Bergen, shot on location in Secaucus last summer on Meadowlands Parkway.
Gov. Christopher Christie will this month decide the fate of a tax credit program for motion picture and television productions that film in New Jersey. Until the governor suspended this tax credit last year, several Hudson County-based productions, including “Law & Order: Special Victims Unit,” had benefited from the tax credit, which supporters say led to job creation and increased business for local vendors.
The state legislature last month approved the restoration and expansion of the tax credit program. Under bills passed by both the state Senate and Assembly, the program would offer 20 percent tax credits to television and film productions that shoot in New Jersey and meet set standards for hiring and local spending. The legislation would offer 22 percent tax credits for productions that film in the state’s Urban Enterprise Zones.
_____________
According to the MPAA, more than 250 people worked on the set of “Mercy.”
________
Last year Christie suspended the credit for Fiscal Year 2011 to close an $11 million budget gap and to take time to evaluate the merits of the program.
The governor has not indicated whether he’ll sign the new legislation, but he has in the past been skeptical that film tax credits create jobs and boost local economies.
Shows left for NY
The tax credit had been instrumental in attracting several TV productions to Hudson County, including the NBC hospital drama “Mercy,” which was shot in Secaucus, and NBC’s “Law & Order: Special Victims Unit,” which filmed throughout the county but was primarily shot in a studio in North Bergen.
After the film and television tax credit was suspended, both productions immediately fled to New York, which still offers its own tax incentive program.
New York is among 40 states and Washington, D.C. that offer economic perks to film productions that shoot in their jurisdictions, according to the Motion Picture Association of America (MPAA). Supporters of the credits argue that they produce jobs and support local businesses in the areas where filming takes place.
“The tax credit program sustains over 70,000 jobs in New York State. I think the New Jersey legislature recognizes the value of the credit,” said Vans Stevenson, MPAA’s senior vice president for State Government Affairs, last week. “This legislation would put New Jersey back in the mix for consideration.”
According to the MPAA, roughly 7,000 jobs were created in New Jersey through film productions in 2008, while state vendors and contractors reaped about $507 million in economic stimulus thanks to the film industry that same year.
Detractors of New Jersey’s film credits question these numbers and believe the state gave away more in credits than it got back in jobs and local spending.
After winning election, Gov. Christie’s own transition team recommended that the state’s film tax credit be extended and enhanced. Christie rejected these recommendations and last year asked State Treasurer Andrew Eristoff to review the economic impact of the program himself.
Eristoff has yet to release the outcome of his review.
Benefit for Hudson County?
Although television and film producers have long held an attraction for New Jersey, several high-profile shows in recent years have turned the spotlight on Hudson County. “Going as far back as the ’70s, we’ve had a lot of film projects come to New Jersey,” Steven Gorelick, executive director of the New Jersey Television and Motion Picture Commission, told the Reporter last summer. In the interview, conducted just weeks before the tax credit was suspended, he ironically credited the state’s tax credit program with helping attract production companies west of the Hudson River.
Until last July NBC had rented a 52,100-square-foot warehouse in North Bergen to shoot its popular cop drama “Law & Order: Special Victims Unit.”
Tom Fontana, producer of the HBO prison drama “Oz,” decided to create his fictional Oswald State Correctional Facility in an old warehouse is Bayonne. Much of the series, which ran from 1997 until 2003, was filmed around the now defunct Military Ocean Terminal base.
More recently, NBC producer Jim Bigwood selected the warehouse at 10 Enterprise Ave. in Secaucus to film his hospital drama “Mercy.” The show occasionally also filmed inside a private residence in Weehawken.
Within days of the tax credit’s suspension last year, NBC announced that both “Law & Order: SVU” and “Mercy” would relocate to New York. Although the network ultimately canceled the latter show, an attorney for NBC/Universal told state lawmakers last year the network could have still used its Secaucus studio for other film projects had the credit remained.
According to the MPAA, more than 250 people worked on the “Mercy” set, which is now rented to a dry goods company.
Approximately 200 people had worked at the “Law & Order” soundstage in North Bergen.
The clock’s ticking
Those in the film and television industry and other supporters of the tax credit are anxious.
When lawmakers passed legislation to restore and expand the film tax credit last month, Christie had 45 days to sign it into law, a timeline that will run out on Feb. 24.
The governor is unlikely to sign the legislation without first seeing Eristoff’s report, but that has yet to be released. In the meantime, Christie is expected to present his FY 2012 budget on Feb. 22.
Supporters of the film tax credit fear time may be running out for the credit to be restored in next year’s budget.
One lobbyist for the film industry said last week that many in the industry expect Gov. Christie to veto the tax credit legislation. Industry lobbyists are now focusing their energies, she said, on securing enough votes to override the governor’s veto and get the credit restored for FY 2012, which begins July 1, 2011.
Read more: Hudson Reporter - Getting the film crews back to NJ Gov to decide future of tax credit that benefited Hudson County
Thursday, February 3, 2011
from 225 Alive.Com..thanks Neil Wells for this alert
Louisiana's latest film crew and production job opportunities »
Wednesday
Feb022011
Motion picture productions filming in the Baton Rouge area spent an estimated $196 million here in 2010
Motion picture productions filming in the Baton Rouge area spent an estimated $196 million here in 2010 and accounted for 33,500 hotel and motel room nights, according to an economic impact report released to the Baton Rouge Film Commission Tuesday.
In all, 26 films and television projects were made in Baton Rouge last year, resulting in an estimated Louisiana payroll of $116 million.
"Our Baton Rouge Film Commission has done a tremendous job selling our city as a great place for production," said Mayor-President Melvin "Kip" Holden, "and they have set even higher goals for the future."
Holden said Baton Rouge Film Commission Executive Director Amy Mitchell-Smith works closely with his office to aggressively pursue projects and overcome any obstacles which could send film productions to another city.
"With our success, Baton Rouge is building an experienced workforce that makes filming here even more attractive to the television and movie industry," Holden said. "Although the state tax credits help, we still have to be creative enough to show that Baton Rouge can provide diverse locations, top notch infrastructure, and the ability to manage the logistical challenges that arise with projects of all budgetary ranges. This year, Third Street was transformed into a street in Hong Kong and the city-parish provided a location appropriate for a NASA laboratory, which showcases our wide range of capabilities; but we still compete every day to be successful with this industry."
Nearly two-thirds of the local spend for 2010 came from two blockbuster projects – the vampire-themed fantasy romance, “The Twilight Saga: Breaking Dawn,” and “Battleship,” a science-fiction thriller based on the popular Milton Bradley board game.
According to the state Office of Entertainment Industry Development records, “Battleship” spent an estimated $67.6 million in Baton Rouge in 2010, and had a Louisiana payroll of $37.7 million.
The state records show that Twilight Saga: Breaking Dawn had an estimated local spend of $65.5 million in the Baton Rouge area in 2010, and is estimated to spend another $32.7 million in 2011 as it continues filming here.
"What sets Baton Rouge apart is our continued passion and commitment to the motion picture industry," said Mitchell-Smith. "As a result our film commission office is extremely responsive in catering to the vast needs specific to each and every production."
Wednesday
Feb022011
Motion picture productions filming in the Baton Rouge area spent an estimated $196 million here in 2010
Motion picture productions filming in the Baton Rouge area spent an estimated $196 million here in 2010 and accounted for 33,500 hotel and motel room nights, according to an economic impact report released to the Baton Rouge Film Commission Tuesday.
In all, 26 films and television projects were made in Baton Rouge last year, resulting in an estimated Louisiana payroll of $116 million.
"Our Baton Rouge Film Commission has done a tremendous job selling our city as a great place for production," said Mayor-President Melvin "Kip" Holden, "and they have set even higher goals for the future."
Holden said Baton Rouge Film Commission Executive Director Amy Mitchell-Smith works closely with his office to aggressively pursue projects and overcome any obstacles which could send film productions to another city.
"With our success, Baton Rouge is building an experienced workforce that makes filming here even more attractive to the television and movie industry," Holden said. "Although the state tax credits help, we still have to be creative enough to show that Baton Rouge can provide diverse locations, top notch infrastructure, and the ability to manage the logistical challenges that arise with projects of all budgetary ranges. This year, Third Street was transformed into a street in Hong Kong and the city-parish provided a location appropriate for a NASA laboratory, which showcases our wide range of capabilities; but we still compete every day to be successful with this industry."
Nearly two-thirds of the local spend for 2010 came from two blockbuster projects – the vampire-themed fantasy romance, “The Twilight Saga: Breaking Dawn,” and “Battleship,” a science-fiction thriller based on the popular Milton Bradley board game.
According to the state Office of Entertainment Industry Development records, “Battleship” spent an estimated $67.6 million in Baton Rouge in 2010, and had a Louisiana payroll of $37.7 million.
The state records show that Twilight Saga: Breaking Dawn had an estimated local spend of $65.5 million in the Baton Rouge area in 2010, and is estimated to spend another $32.7 million in 2011 as it continues filming here.
"What sets Baton Rouge apart is our continued passion and commitment to the motion picture industry," said Mitchell-Smith. "As a result our film commission office is extremely responsive in catering to the vast needs specific to each and every production."
From Santa Fe New Mexican.Com
Split vote stalls bill to kill film incentive
by Trip Jennings | The New Mexican
Is it a "subsidy" or a "tax credit" when New Mexico refunds part of what a TV or film production spends in the state?
That question — which term most accurately describes the state's film production tax credit — repeatedly came up Thursday during a first, and possibly last, legislative hearing on a piece of legislation that would kill the program.
On a 5-to-4 vote along party lines, the House Labor and Human Resources Committee tabled a bill sponsored by Rep. Dennis Kintigh, R-Roswell, aimed at completely doing away with the tax credit.
The tabling was a blow to Kintigh and others who want to eliminate or at least reduce the program, but it likely won't be the final skirmish in the battle over film-industry incentives.
Thursday's vote came after a two-hour hearing in which dozens of people, including more than a few Santa Fe business owners, spoke against the legislation.
"I sold my house, everything in California, and moved 100 percent here because of the incentives" four years ago, said Adam Barth, owner of Santa Fe's Absolute Video Assist. "I believe if they even reduce it, (the film business) will go away."
Subsidy or tax credit?
While no one in the audience spoke in support of Kintigh's legislation, the debate among state lawmakers put on display the multilayered quality of legislative debates in which not only numbers are thrown around, but state lawmakers engage in deliberate word play to make their case.
Critics repeatedly used the word "subsidy" to describe the program, similar to the phrase Gov. Susana Martinez has employed since announcing her desire to lower from 25 percent to 15 percent the refundable tax credit the state gives to production companies that meet certain requirements.
Supporters of the program, meanwhile, returned again and again to the phrase tax credit or discount, and avoided "subsidy" like the plague.
The artful use of words as weapons is inherent in political debates, particularly in highly charged ones. And the battle over whether to reduce New Mexico's film-production tax credit is no exception. The Martinez administration has said her recommended reduction would save $25 million at a time when state policymakers are trying to close a projected shortfall between $200 million and $450 million.
During Thursday's more than two-hour hearing, Kintigh said "subsidy" repeatedly, especially when speaking of the $65.9 million New Mexico paid to TV and film productions from the state treasury last year through the program.
Because of the way the program works, the total refunds of $65.9 million, or 25 percent of qualified expenses, to film and TV production companies means that those firms spent at least $263 million in New Mexico last year.
Kintigh's choice of words caught the attention of Rep. Sheryl Williams Stapleton, D-Albuquerque, who asked Kintigh what he thought of the tax credits, exemptions and deductions New Mexico gives to other industries.
Of the $1.3 billion New Mexico didn't collect in taxes because of hundreds of tax credits, exemptions and deductions in the state tax code, more than $134 million went to the oil and gas industry, according to a New Mexico Taxation and Revenue Department document.
"This is fundamentally different," Kintigh said to Stapleton. "Show me the checks. I can show you ... of checks written from the public treasury to the film companies," Kintigh said.
Kintigh held up a state memorandum listing more than $180 million in payments to more than 110 TV and film productions over the past three years, including the $65.9 million from last year.
"There are no corresponding checks" to the other industries, he told Stapleton.
"As glamorous, as appealing, as notable as this industry is, we have to look at the data," Kintigh said in defense of his bill.
Stapleton shot back that the effect was still the same. Whether the state cut checks or decided not to tax an industry through tax credits, exemptions or deductions, the "state is getting less money," she said.
Fuzziness over program
The use of competing terms to describe the state's film-production tax-credit program is fostered by a lack of clarity about exactly what the program does. The state's film-production tax credit isn't a traditional film tax credit so much as a rebate.
A tax credit usually removes part of a taxpayer's tax liability. For example, a 25 percent tax credit normally means a taxpayer owing $1,000 in taxes pays only $750, or $250 less than the full amount.
The state's film production tax credit works differently.
The film productions spend money in New Mexico and then the state reimburses up to 25 percent of what each production spends in "qualified expenses," a broad category that contains any direct production expense for a purchase in New Mexico that has a state tax attached. For example, lumber or meals from a local caterer trigger the state's gross-receipts tax.
The money New Mexicans earn while working on the production, as carpenters or electricians or technical crew, also could count as qualifying expenses.
Real life consequences
The program's intricacies might be hard to grasp, but there will be easy-to-understand consequences if the state reduces the program, said dozens of people who packed into Room 317 of the Capitol, where Thursday's hearing was held.
Rick Clemente of I-25 Studios in Albuquerque said two productions recently had called him while looking to rent space.
"One is a TV series probably that would have spent millions of dollars in New Mexico," he said. "The other one was a major, two-hour, made-for-TV movie that was also a pilot."
Now, they aren't answering their phones, he said, and he'd heard they were scouting locations in Texas. Clemente attributed the change of heart to New Mexico's debate over the film-production tax-credit program.
Steve Perry of Masque Entertainment Studios, which has received city approval to build facilities at the Santa Fe Railyard, said the film industry "is one of the most expensive industries to create and sustain. So the business decision is where can you maximize your discount? We don't call the (New Mexico) rebate a rebate. We call it a discount."
State officials who think New Mexico can keep the same amount of film business coming if they reduce the incentives are mistaken, he said. "They think if they reduce it, they'll still keep it here," he said. "The banks are pushing the decisions. It's a business."
by Trip Jennings | The New Mexican
Is it a "subsidy" or a "tax credit" when New Mexico refunds part of what a TV or film production spends in the state?
That question — which term most accurately describes the state's film production tax credit — repeatedly came up Thursday during a first, and possibly last, legislative hearing on a piece of legislation that would kill the program.
On a 5-to-4 vote along party lines, the House Labor and Human Resources Committee tabled a bill sponsored by Rep. Dennis Kintigh, R-Roswell, aimed at completely doing away with the tax credit.
The tabling was a blow to Kintigh and others who want to eliminate or at least reduce the program, but it likely won't be the final skirmish in the battle over film-industry incentives.
Thursday's vote came after a two-hour hearing in which dozens of people, including more than a few Santa Fe business owners, spoke against the legislation.
"I sold my house, everything in California, and moved 100 percent here because of the incentives" four years ago, said Adam Barth, owner of Santa Fe's Absolute Video Assist. "I believe if they even reduce it, (the film business) will go away."
Subsidy or tax credit?
While no one in the audience spoke in support of Kintigh's legislation, the debate among state lawmakers put on display the multilayered quality of legislative debates in which not only numbers are thrown around, but state lawmakers engage in deliberate word play to make their case.
Critics repeatedly used the word "subsidy" to describe the program, similar to the phrase Gov. Susana Martinez has employed since announcing her desire to lower from 25 percent to 15 percent the refundable tax credit the state gives to production companies that meet certain requirements.
Supporters of the program, meanwhile, returned again and again to the phrase tax credit or discount, and avoided "subsidy" like the plague.
The artful use of words as weapons is inherent in political debates, particularly in highly charged ones. And the battle over whether to reduce New Mexico's film-production tax credit is no exception. The Martinez administration has said her recommended reduction would save $25 million at a time when state policymakers are trying to close a projected shortfall between $200 million and $450 million.
During Thursday's more than two-hour hearing, Kintigh said "subsidy" repeatedly, especially when speaking of the $65.9 million New Mexico paid to TV and film productions from the state treasury last year through the program.
Because of the way the program works, the total refunds of $65.9 million, or 25 percent of qualified expenses, to film and TV production companies means that those firms spent at least $263 million in New Mexico last year.
Kintigh's choice of words caught the attention of Rep. Sheryl Williams Stapleton, D-Albuquerque, who asked Kintigh what he thought of the tax credits, exemptions and deductions New Mexico gives to other industries.
Of the $1.3 billion New Mexico didn't collect in taxes because of hundreds of tax credits, exemptions and deductions in the state tax code, more than $134 million went to the oil and gas industry, according to a New Mexico Taxation and Revenue Department document.
"This is fundamentally different," Kintigh said to Stapleton. "Show me the checks. I can show you ... of checks written from the public treasury to the film companies," Kintigh said.
Kintigh held up a state memorandum listing more than $180 million in payments to more than 110 TV and film productions over the past three years, including the $65.9 million from last year.
"There are no corresponding checks" to the other industries, he told Stapleton.
"As glamorous, as appealing, as notable as this industry is, we have to look at the data," Kintigh said in defense of his bill.
Stapleton shot back that the effect was still the same. Whether the state cut checks or decided not to tax an industry through tax credits, exemptions or deductions, the "state is getting less money," she said.
Fuzziness over program
The use of competing terms to describe the state's film-production tax-credit program is fostered by a lack of clarity about exactly what the program does. The state's film-production tax credit isn't a traditional film tax credit so much as a rebate.
A tax credit usually removes part of a taxpayer's tax liability. For example, a 25 percent tax credit normally means a taxpayer owing $1,000 in taxes pays only $750, or $250 less than the full amount.
The state's film production tax credit works differently.
The film productions spend money in New Mexico and then the state reimburses up to 25 percent of what each production spends in "qualified expenses," a broad category that contains any direct production expense for a purchase in New Mexico that has a state tax attached. For example, lumber or meals from a local caterer trigger the state's gross-receipts tax.
The money New Mexicans earn while working on the production, as carpenters or electricians or technical crew, also could count as qualifying expenses.
Real life consequences
The program's intricacies might be hard to grasp, but there will be easy-to-understand consequences if the state reduces the program, said dozens of people who packed into Room 317 of the Capitol, where Thursday's hearing was held.
Rick Clemente of I-25 Studios in Albuquerque said two productions recently had called him while looking to rent space.
"One is a TV series probably that would have spent millions of dollars in New Mexico," he said. "The other one was a major, two-hour, made-for-TV movie that was also a pilot."
Now, they aren't answering their phones, he said, and he'd heard they were scouting locations in Texas. Clemente attributed the change of heart to New Mexico's debate over the film-production tax-credit program.
Steve Perry of Masque Entertainment Studios, which has received city approval to build facilities at the Santa Fe Railyard, said the film industry "is one of the most expensive industries to create and sustain. So the business decision is where can you maximize your discount? We don't call the (New Mexico) rebate a rebate. We call it a discount."
State officials who think New Mexico can keep the same amount of film business coming if they reduce the incentives are mistaken, he said. "They think if they reduce it, they'll still keep it here," he said. "The banks are pushing the decisions. It's a business."
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