Good One, Dear Dave

David Thrasher, mild-mannered and content to stand in the shadows while others bask in glory. But this modest and very generous man has had a flame of discontent burning under him and this flame has thrown him off his chair and with his wonderful writing ability he has penned a very important and revealing letter which I hope all of you out there have read and appreciated.

Thanks, Dave. Good one!!!! Thrasher. David Thrasher.

gino

Question Time

Pointed questions about the situation surrounding the Iowa film tax credit scandal

The Tom Wheeler trial as well as the other trials that have taken place due to the Film Tax Credit scandal have answered a lot of questions but not all, and have raised many more. There are many pointed questions I can think of that I would like to ask the various people who had a part in creating the problem. (Asking these questions with the aid of a pointed stick would be especially satisfying.)

To Michael Blouin, the first head of the Iowa Department of Economic Development (IDED) that Tom Wheeler served under (during the Vilsack administration) I would like to ask this:

Why did you hire Tom Wheeler in the first place while ignoring the 40 or so other applications for the job of Iowa Film Office manager? You didn't renew the contract of previous Film Office manager, Steve Schott, and instead appointed Tom Wheeler without any review of the many applications. Why?

While there may have been applications in the pile of people that were just as qualified as Wheeler, there likely were people with better experience, yet you skipped over these people. Tom Wheeler's experience in the film business consisted of working as a Production Assistant at Fox Animation in the Editorial Department. Did you even bother to find out what this job entailed?

A Production Assistant (PA) is the lowest rung on the ladder. These are the people who get the coffee and do the filing. Tom Wheeler never was on a motion picture or television set, never worked on locations, never dealt with film budgets, and never did many of the things that he would later be asked questions relating to when he went to work for you. He was having trouble with the job long before the film tax credits entered into things or before you moved on to another position elsewhere.

So, tell me again why you hired him? Was he someone's well-connected relative? Did one of your bosses tell you to hire him and to pay no attention to all the other applicants?

I really want to know. Please tell me.

To the members of the Iowa Legislature:

My question to you is not why did you pass the film tax credit bill? With the competition from other states for film projects and the dollars they brought, passing this bill made perfect sense. No, my question - questions, actually - to you are these: Why did you write a law that concerned taxpayer dollars with such vague language? Why did you not include funding or qualified staffing to adequately administer such a program? And finally, why are you now pretending that you had nothing to do with it?

Both major political parties in both houses passed it with a majority voting for it. Now, rather than showing any true leadership and fixing its flaws, you prefer to pretend that it doesn't exist and hope that it will simply go away.

To Michael Tramontina, the second director of the Iowa Department of Economic Development that Tom Wheeler served under:

Just where were you during this big mess? Sleeping at your desk? Were you really so clueless as to think the Film Office was just some fun little tourism thing and that the film tax credits were just some vague abstract thing that the legislature had talked about once? And why did you panic and resign once the issue of luxury cars came up? (Note to self: If ever visiting Beverly Hills with Mike Tramontina, don't go anywhere near a Rolls-Royce dealership. It could give him a heart attack!)

If Tom Wheeler was unable to handle the film tax credits himself, why did you let him? Why didn't you provide staffing for him? And if you didn't think he was the man for the job, why didn't you replace him? You know, division heads have that power. Why didn't you use it?

To Tom Wheeler, the now former manager of the Iowa Film Office:

While I know you suffered greatly through the ordeal of being fired from your job and through the time of your trial (they don't call them "trials" for nothing!), to say nothing of your time at the Iowa Film Office, there are still questions that need to be asked.

Why did you not seek more help from the film community during your term as manager when it became apparent that you were in over your head? I am not just asking about the time when the film tax credits became part of the job. I'm talking about your whole term as manager. Why did you mostly rely mostly upon the internet for information when you could have called people in the know directly who could have given you much more informed answers? There is a lot of information on the internet, true, but it is by no means complete nor necessarily accurate. Was it a puffed up sense of pride from having your first well paying job and a "I can do it all myself" attitude that made you approach your job this way?

And when the film tax credits came into being and your higher ups not only refused you the money and the proper staffing to administer it - in fact cut your Film Office budget - why didn't you just quit? It certainly would have appeared the honorable thing to do and in truth would have been. You could have possibly used your Film Office credentials to find another job in the film industry. Why did you try to be a hero when you were so obviously unprepared and unarmed for the situation?

To Tom Miller, Iowa Attorney General:

Why didn't you provide any legal assistance to the Iowa Film Office during the time of the film tax credits? Were you somehow expecting Tom Wheeler to know all about this subject or about the law in general? Why did you allow your office to be used as a tool to make Tom Wheeler a scapegoat and deflect attention from the other responsible parties who should have known better? Why did you make it your job to protect the powerful in state government at the expense of Iowa taxpayers?

To Chet Culver, former governor of Iowa:

Did you pay any attention at all to what was happening in the various departments under your care, or were you too busy keeping up with the doings of the Green Bay Packers? Why did you decide to make no effort at all to fix the film tax credit program problems once you awoke from your slumber? To use words you might understand, why did you forfeit the game when it was still only at the beginning of the first quarter after noticing that the score was not in your favor?

You could have frozen the film tax credit program for only a limited period of time - time enough to regroup, fire whoever needed to be fired, hire whoever needed to be hired, do whatever triage necessary to get things moving again, and then work with all the parties involved to fix the problems for good. You can walk and chew gum at the time, can't you? (Don't answer that!)

Instead, you froze everything for essentially forever with no attention given whatsoever to the possible consequences of your actions. Then you had the nerve to try to use it as an issue for your re-election campaign with your tough guy declaration about Iowans not being made into suckers.

Are you surprised you lost the election? I'm not.

To the great silent majority of the Iowa film community:

I'm talking about those who simply sat back while this whole thing was going on without raising a finger to fight back for a chance for a satisfying way to make a living. Why didn't you do anything? What was so important that you couldn't even take 5 minutes to write a legislator or send a "letter to the editor" expressing your thoughts? There were plenty of you around when times were good. You were lining up at the craft service tables, grabbing the pay checks, the glamor of the visiting celebrities, and enjoying the camaraderie of the set. But when all of this was threatened you decided to hang back and let others do the leg work. Why?

The few who did try to do something and did speak up need more than the occasional "Atta boy!" from you. The need more than a "thank you". They need more than an apology from all above. They need their lives and opportunities restored. Who is going to do it for them?

To all of those I've referred to above and to all of those reading this article:

The problem with the film tax credit scandal is that it just didn't affect the Iowa Film Office, it didn't just affect the well being of the Iowa Department of Economic Development, and its effects did not stop at the Culver administration. It affected the whole state of Iowa and in its wake took down several other Film Offices and film incentive programs in other states. It put a black eye on Iowa in the eyes of the rest of not only the country but of the world and not just in the film community.

Film producers no longer trust the State of Iowa for anything. Who can blame them?
In the film community what happened as a result of the film tax credit scandal was the equivalent of the dropping of an atomic bomb. Iowa may as well contain deadly radiation as far as they are concerned. Nobody wants to film in Iowa any longer, at least professionally anyway. The fallout is going to last years, if not decades to come.

Like Being In The Talapoosa Georgia Jail Again

Thank you to those who have written to Governor Branstad regarding the Iowa Film Office being revived. I had hoped many more of you in the Iowa Film Family would've written though. I feel like I did when in the late sixties I was on a Georgia highway hitchhiking in the black of night, alone and broke and not a car in sight. I did eventually get a ride , but in an old car driven by drunk hillbillies. I got tossed in the Talapoosa jail overnight for being with them. So, that's how I feel, a bit concerned but still hopeful.

Write to Iowa's Governor Branstad, Please!

I asked my dear friend Dave Thrasher to help me draft a letter which we in the Iowa film family could send to our governor. Now all you have to do is copy and paste it and send it to the governor using the below email address. The governor has NOT heard from many at all, in fact, very few, so by you sending a letter he will feel our presence and realize our needs. DO IT!!! thanks.. gino send to: (email: governor.contact@Iowa.gov)


Dear Governor Branstad,

For over two years we in Iowa's film community have gone without being able to employ our skills and talents once utilized in feature films shot in Iowa. We had nothing to do with the film program wrongdoings, yet our “Field of Dreams” has become a “Field of Nightmares”. Many of our film colleagues were forced to move out of the state in order to pursue film-making careers, but many of us remain in Iowa hoping and waiting for things to get better and for the Iowa Film Office to re-open.
For us, film and television production here represented both financial opportunity and the chance to continue to live with our friends and family in Iowa without needing to move and thus increase the talent base and tax base in other states.
Re-establishing the Iowa Film Office and encouraging film productions to shoot in Iowa will help you fulfill your pledge of creating more jobs for Iowans.
We very much appreciate your efforts in your previous administrations with your original creation of the Iowa Film Office and we urge you now to re-establish it , with sufficient staffing and sufficient funding. It is a crucial first step in reviving film activity in the state, activity that will lead to contributions to the economy of our state.This is a way of bringing money from outside our state and will benefit not only those who get film jobs but, too, those in the hotel, transportation, food, and other industries within our state.
I ask that you please put this important creative and economic matter on your fast track, Governor Branstad.
Signed,
(Your Name)

My Festering Wound

Does the following bother YOU? I just can't let go of it....:

Debi Durham, director of the reconfigured Iowa Economic Development Authority, said she would like to see the state “get rid” of the film tax credit program that has been suspended until 2013 due to a scandal that shut down the effort two years ago and resulted in criminal convictions over alleged abuses and mismanagement of financial incentives aimed at attracting movie, television and video projects to Iowa.
“That’s not a business we should be in, and the reason we shouldn’t be in it is because it isn’t creating the value we need from a high-quality job, high-quality investment,” Durham said. “I don’t think we need to be incentivizing it.”

From EarternIowaGovernment.Com, Rod Boshart writer

Durham: Get rid of state film tax credits
October 6, 2011, 2:23 pm
By Rod Boshart/SourceMedia Group News

Gazette Des Moines Bureau
DES MOINES – Iowa’s economic development chief said Thursday the state should not be in the business of providing financial incentives to lure film projects.
Debi Durham, director of the reconfigured Iowa Economic Development Authority, said she would like to see the state “get rid” of the film tax credit program that has been suspended until 2013 due to a scandal that shut down the effort two years ago and resulted in criminal convictions over alleged abuses and mismanagement of financial incentives aimed at attracting movie, television and video projects to Iowa.
“That’s not a business we should be in, and the reason we shouldn’t be in it is because it isn’t creating the value we need from a high-quality job, high-quality investment,” Durham said. “I don’t think we need to be incentivizing it.”
The Iowa Attorney General’s Office currently is negotiating with the remaining filmmakers who contracted with the state for tax credits to resolve outstanding issues, and Durham said once that process is completed and Iowans assess what was invested and what was gained in return she expects they’re going to say “let’s rethink that.”
Leaders of the Iowa Motion Picture Association and others have been working to revitalize a film industry that suffered a setback with the tax credit program’s collapse. They say they are pushing to reopen the Iowa Film Office and to reformulate a new Iowa incentive program similar to what other states offer to attract film projects.
Durham said she favors reopening the Iowa Film Office but placing it in the state Department of Cultural Affairs and having it operate as a clearinghouse of information where prospective moviemakers could go to get information about possible locations where film shoots could take place or to connect them with businesses in Iowa that specialize in equipment, crews, cast or other pertinent services.
“What we need to do is facilitate the process. We need to make sure we have a directory here that when film companies come in, we can introduce them to companies that can do work. We should be a clearinghouse for that,” she said.
“When you look at some of the biggest films like “Bridges of Madison County” and “Field of Dreams,” I mean we didn’t incentivize those and I don’t think we need to. I think we need to facilitate those and we need to have that information handy.”
Tim Albrecht, Gov. Terry Branstad’s spokesman, said last week that the governor is interested in opening a new Iowa Film Office given the movie-making successes the state enjoyed in the ‘80s and ‘90s and he has had discussions with Wendol Jarvis — who created the office in 1984 and then left in discouragement over staff cuts in 2002 – about reprising his role.
Albrecht said the governor believes filmmaking is good for economic development in Iowa, but it’s not likely film tax credits have a future role in Iowa.

By Mary E. Arata, from Nashoba Publishing, Harvard

Before cameras roll, a focus on film tax credit

By Mary E. Arata, Marata@nashobapub.com


DEVENS -- MJM Development, LLC, of Andover hopes to build a first-of-its-kind movie and television studio on Devens.

Led by Managing Director Michael J. Meyers (no relation to the former Saturday Night Live and Austin Powers actor), MJM says it will build a $104 million, 600,000-square-foot film and television studio on Jackson Road at Devens.

It's not the first time a sound stage has been contemplated for Devens, according to Devens Enterprise Commission Administrator Peter Lowitt. But this is the first proposal to see the light of day with a named entity and a pinpointed location, which will fall entirely within the historical bounds of Harvard.

The success of the launch rests in part with the Massachusetts film tax credit. It was considered a lynchpin in similar studio deals plotted for South Boston, Plymouth and even the former naval station in Weymouth. No other Massachusetts studio has made it to full theatrical release.

In order to turn the screenplay into reality, MJM Development will bank on its studio tenants -- movie and television producers -- being attracted to the tax credit.

State Department of Revenue spokesman Bob Bliss said the individual productions, and not the studio construction itself, can benefit from the tax relief.

"The production of movies qualifies, but the construction of the studio is not a qualified expense," Bliss said. "Who knows what other tax credits might be applicable here, but the film tax credit is
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not one of them."

The law, in a nutshell

To roll out the red carpet to movie and television producers, former Gov. Mitt Romney signed the state's first film tax credit into law in 2005, and it was to sunset in 2013. Gov. Deval Patrick signed into law amended legislation that extended the sunset date to Jan. 1, 2023.

The goal is to depict Massachusetts in a positive light and spark spinoff jobs, hotel stays, tourism and retail sales.

To qualify, studios, producers and filmmakers must shoot at least half of their movie or spend at least half of their production budget in the state to be eligible for a tax credit of 25 cents for every new dollar of spending they bring to Massachusetts. There's a 100 percent sales-tax exemption on any in-state, production-related item purchased, starting with pre-production and stretching for the ensuing 12 months.

There's also a 25 percent payroll-tax credit applicable to the total payroll of a motion picture subject to Massachusetts personal income-tax withholdings but not for "high salary" stars earning more than $1 million.

The tax credit is credited to the company's personal income or corporate excise-tax liability. At their discretion, filmmakers may opt to receive a guaranteed direct payout of 90 percent of the face value of the tax credit. Otherwise, a filmmaker can sell the tax credit at market rate. Transferred tax credits can be carried forward for five years.

Unlike the former Romney-era, $7 million-per-motion-picture limit, there are no limits or cap on the tax credits possible. As the Massachusetts Film Office website proclaims, "No muss. No fuss."

The credit applies to feature-length films, video or digital media projects (narrated or documentary); TV series (with a season not to exceed 27 episodes); and commercials (a single commercial or series of commercials for one client with production expenses above $50,000 in a consecutive 12-month period).

Obscene productions cannot benefit; nor can fundraising and marketing productions cannot.

News programs are excluded, as are current-events programming, weather and financial market reports, talk shows, game shows, sporting events, awards shows and gala events.

Expenses qualifying for the tax relief include wages and salaries, set construction, operations, photography, lighting, sound, editing, wardrobe, makeup, film processing, transfer, sound mixing, special and visual effects, music, location fees, and the purchase or rental of facilities and equipment.

While the Massachusetts Film Office enthusiastically reports that the film tax credit is a boon to the state's economy, Department of Revenue figures sully that statement. The DOR is required to annually report on the figures. The DOR's report on calendar year 2009 was released in January and resulted in negative press -- particularly a critical Associated Press story, grilling the merits of the tax credit:

* For productions filmed in 2009 that had yet applied for the credits, a total of $82.4 million in film tax credits were generated by 86 individual productions, with commercial and advertising productions accounted for the largest number of tax credits awarded (48). There were also 13 feature films. Combined, they accounted for 93 percent of the total value of tax credits claimed to date for 2009.

* Massachusetts directly paid out $100 million in fiscal year 2010 for tax credits issued in 2009 and issued in prior years but that had not yet been used.

* In calendar 2009, the film tax incentive program generated $10.4 million in new state revenue that could help partially offset the cost of the tax credits.

* Taking into account payments to out of state residents and businesses, as well as state spending cuts required to fund the tax credits, in calendar 2009, the film tax credit program resulted in $32.6 million in new spending in the Massachusetts.

* In 2009, the cost to the state per Massachusetts resident job created was $324,838. The cost spread over all jobs created (in and out of state) was $123,130 per employee. For the period 2006 to 2009, the cost per Massachusetts resident job created was $133,055 and for all jobs created was $70,648.

* Tax credits for calendar year 2009 productions totaled $329.7 million. DOR estimates that $10.7 million were productions that would have proceeded regardless of the tax credits. Of the remaining $319 million in new 2009 spending attributable to the tax incentives; $103.8 million, or one-third, was paid to Massachusetts residents or businesses located in Massachusetts; and $215.2 million, or two-thirds was paid to nonresidents or businesses located outside of Massachusetts.

Taking it all into account, the film tax-credit program resulted in $32.6 million in new spending in the Massachusetts economy in 2009, according to the DOR report of January.