From the Missouri News Horizon

Missouri eliminates film office, not film tax credits
June 22, 2011
By Brian R. Hook

Missouri Watchdog

The Missouri Film Office is in the process of shutting down after Missouri Gov. Jay Nixon cut its funding, however the film industry will continue to receive support through the Missouri Department of Economic Development.

The governor, who has the authority to restrict expenditures at anytime during the fiscal year to ensure a balanced budget, cut the $175,000 the Missouri General Assembly budgeted for the office for fiscal 2012, starting July 1, earlier this month.

The film office, designed to promote the growth of the video and film industry within Missouri, is expected to spend around $200,000 this fiscal year, ending June 30.

“Continued funding for the administrative costs for staffing a dedicated film office was simply not feasible,” said Missouri Budget Director Linda Luebbering, noting the need to make spending reductions to ensure the budget stays in balance.

While the office will close June 30, the state’s economic development department will continue to work with the film industry, Luebbering said.

Closing the film office is a good first step, said Audrey Spalding, a policy analyst with the Show-Me Institute, a free-market think tank in St. Louis. “But it is by no means substantial reform,” she said. “The state should stop awarding film tax credits.”

Film tax credits have increased in recent years in Missouri, hitting more than $4 million issued in 2009 and more than $3 million issued in 2010, Spalding said.

“Film tax credits are some of the worst tax credits that the state awards,” Spalding said.

“The credits, at best, result in a few temporary jobs in the state.”

The Missouri Tax Credit Review Commission, formed by Nixon last year to present recommendations for reform, said that the state should eliminate film tax credits in its final report issued in late November.

“This tax credit serves too narrow of an industry and fails to provide a positive return on investment to the state,” according to the report, which advised lawmakers on ways to eliminate more than $220 million in tax credits.

The Missouri General Assembly, however, did not pass any tax credit reforms before its session ended in May.

“When film companies desire to shoot a film in the state of Missouri, we will be able to accommodate them as we always have,” said John Fougere, spokesperson for the Missouri Department of Economic Development.

The economic development department has not issued any film tax credits for fiscal 2011. The annual cap on film tax credits in Missouri, if any are issued, will remain at $4.5 million for fiscal 2012, according to Fougere.

The $175,000 in savings may be small relative to the $23.29 billion spending plan for Missouri, but eliminating the film office is a step in the right direction and a way to cut unnecessary bureaucracy, said Christine Harbin, research manager at the American Legislative Exchange Council in Washington D.C.

“If they were serious about solving Missouri’s budget woes, lawmakers in Missouri will eventually cut the film tax credit program entirely and rein in targeted tax credits,” Harbin said. ”Missouri simply can’t afford to subsidize film production. The state government has other bills to pay that are more important than making movies.”