From The Denver Post, by Jason Blevins

business
Colorado's new film commission chief wants to boost state's movie-making incentives
By Jason Blevins
The Denver Post


Legislators in 17 states, including Michigan, Arizona, Kansas, New Mexico and Idaho, are scaling back and even suspending movie-incentive programs as they wrestle with budget deficits.

Lawmakers in Utah and Wyoming are ramping up programs that offer cash rebates of 25 percent or more to filmmakers who roll cameras in their states.

Then there's Colorado, which boasts the oldest state film commission in the country. Filmmakers have largely eschewed the state — not for its lack of theater-filling landscapes but for its bottom-of-the-barrel incentive program, which offers a comparatively meager 10 percent rebate to production outfits that film here.

In the past seven years, legislative attempts to grow the incentive program have failed, including this year's push to tack a dime onto every movie ticket sold.

"I'm a firm believer that if we create a better incentive plan for Colorado, it will be a good business development tool," said Republican state Rep. Tom Massey, who has carried some form of movie-incentive legislation for the past seven years. "We have to find a way to create that funding source outside of the traditional government funding procedures."

Colorado has not hosted a major movie production in years, while neighboring states such as New Mexico

and Utah have attracted scores of Hollywood hits.

Since Utah created its state-run film commission in 2004, 65 film projects have earned rebates and left about $178 million in the state, according to the commission. Recent films out of Utah include all three "High School Musical" flicks and the Oscar-nominated "127 Hours."

New Mexico's 25 percent incentive has lured 159 major productions in the past nine years, harvesting almost $4 billion in economic impact and paying out $253 million in rebates, according to that state's film office.

With a big-name Hollywood producer now helming the recently revived Colorado Office of Film Television & Media, and a governor friendly to the idea of more Colorado-based movies, hopes are high that Colorado can regain its luster with moviemakers.

"Independent filmmakers generally choose the place with the best incentives," said Donald Zuckerman, whom Gov. John Hickenlooper this spring tapped as new chief of the Colorado Office of Film, Television and Media.

Zuckerman would know.

The Hollywood producer has backed almost 20 pictures, including several with the late director George Hickenlooper , cousin of the governor. In the past decade, Zuckerman said, he has watched incentive programs grow to dominate the industry. A pair of recent films he produced in New Mexico earned him cash rebates of $1.3 million and $1.25 million.

"We could not have made those movies without that money," he said.

He has crafted a plan — which he says he can't discuss until he presents it to the governor — that "will bring a lot of business to Colorado. A lot of significant business."

"It will not cost the state any money but will actually earn the state money," Zuckerman said. "The centerpiece is something unique that no other state has done. It will actually be a profit center for the state."

In 2010, a record 40 states delivered $1.4 billion in film and television tax rebates as part of incentive programs. Today, 43 states have movie-incentive programs. More than $6 billion in public money has been delivered to filmmakers since incentive programs first bloomed a decade ago, according to research by the Washington, D.C.-based Tax Foundation.

In fact, some scripts, Zuckerman said, are actually being written and revised with an eye toward incentives, which can reach as high as 42 percent in suddenly movie-mad Michigan. Last year, Michigan taxpayers paid nearly $100 million in incentives, almost triple the amount paid in 2008, the incentive program's first year.

But in Michigan, they are skeptical. A report last fall by the state Senate fiscal agency argued that nearly half the private spending generated by movie-making "effectively left the state and did not contribute to the state's economic activity."

The report found the state spent $37.5 million in rebates to generate $21.1 million in private-sector activity in 2008-09 and plans to spend $100 million in 2009-10 to generate $59.5 million in private-sector activity.

A similar report by New Mexico State University's Arrowhead Center concluded that the state — which has recently been dubbed "Tamalewood," thanks to its thriving movie industry — lost money on its incentive program.

(To counter the reports, movie and tourism supporters in both states commissioned studies that show, not surprisingly, significant boosts in revenue for every dollar invested in movie incentives.)

Today, Michigan is planning to cap its rebate program at $25 million and New Mexico is weighing a cap.

Nationally, both support for and opposition to movie incentives cross political boundaries. The liberal-leaning Center for Budget and Policy Priorities and the conservative Tax Foundation issued reports last year concluding that movie incentive programs delivered too little bang for their buck.

"Basically, this thing has become an arms race. I call it a race to the bottom," said Harris Kenny, a policy analyst for the free-market-advocating Reason Foundation who testified against the proposed 10-cent movie ticket fee in Colorado's statehouse this spring.

Still, some states are investing in movie incentives, betting that the scaling-back by other states poses an opportunity.

In Utah, for example, lawmakers this spring raised the state's incentive from 20 percent to 25 percent and established a fund that guarantees rebate money would never lapse.

Studios love the fund concept because it means they get rebates in weeks instead of months or even years, said Marshall Moore , director of the Utah Film Commission.

State lawmakers believe in the program, he said, and they recognize the promotional opportunities.

"We have a proven stable record of success over the years, and legislators recognize those benefits," Moore said.

"Our program is here to stay. This is the way of the future and the way it is today."

Jason Blevins