Lee Thomas Article ..Dreaded Tax Credits

This article is taken from another person's blog: Moderated by Rick Badie A popular film industry tax credit has led some to call Georgia the Hollywood of the South. The director of the state film office calls the tax incentive a necessity in a competitive market. A tax analyst suggests it’s time for all states to roll up the red carpet and end subsidies for such a profitable industry. Tax incentives fuel filmmakers’ interest By Lee Thomas Last week, the Georgia Department of Economic Development released the state film office’s fiscal year 2012 economic impact numbers for the film industry — $3.1 billion. The state is currently hosting 32 film and television shows, from home improvement shows to scripted dramas and major feature films. In February 2007, we had one project filming here: the MTV reality show, “Yo Momma.” The economic impact for that fiscal year was $244 million. How did the state’s film and television industry grow over 1,100 percent in five years? First, by having a proactive legislature and governor who supported the Georgia Entertainment Industry Investment Act, a tax credit incentive of up to 30 percent for projects. Canada started offering incentives for entertainment projects in the late 1990s. Louisiana started the first competitive domestic incentives in 2002. We lost business to both of them. In 2005, when a biopic of Georgia’s native son, Ray Charles, was filmed in Louisiana, legislators decided enough was enough. Today, a market must offer incentives. Studios’ accounting departments dictate which states can be considered for projects. The tax incentive savings are typically rolled back into the budget, raising the spending level. The influx of cash into the economy is widespread. Georgia’s real estate market has been buoyed by shows that rent warehouses, offices, homes and apartments. The film business supports hotels, restaurants, rental car facilities and so on. More than 60 new businesses have expanded or located in Georgia since 2007, from major sound stages to production support companies. These companies are here because the level of business warrants it. They do not get the film tax credits. The film and television industry has provided tens of thousands of jobs to Georgians, not only in technical positions, but also as caterers, production assistants, painters, hair dressers, etc. A 2011 study indicated that for every dollar the state spends on tax credits, $1.24 is earned in state and local taxes. This does not take into account the value of having Jennifer Aniston talk about how she loves Clarkesville on “Good Morning America,” or the Georgia logo being on the credit roll of a film like “The Blind Side.” It does not represent tourists who travel to Georgia to see the Mystic Grill in Covington from “Vampire Diaries.” Senoia, which hosts AMC’s hit “The Walking Dead,” has seen businesses downtown increase from six in 2006 to 47 by 2012, largely due to the film industry. Georgia is uniquely situated for the film business. We have an experienced workforce and infrastructure to save the production companies money. We have a temperate climate so productions can film year-round. We have a diverse topography of mountains, beaches, plains, small towns and urban landscapes. We have great restaurants and the ease of access provided by the world’s busiest airport. Georgia does not have the highest incentive, but it is sustainable. All of these assets help make filming in Georgia cheaper, easier and more desirable than in most markets. The film industry in Georgia means business! Lee Thomas is director of the Georgia Film, Music and Digital Entertainment Office. Better uses for scarce dollars By Joseph Henchman This November, the Georgia State Archives reduces itself to three staffers due to budget cuts, making Georgia the only state without archives open to the public. Other state agencies have been asked to cut themselves 3 percent, the fifth consecutive year of budget and staff reductions. One program not seeing cuts is the state’s annual $200 million in film tax incentives. In recent years, more than $500 million in Georgians’ taxpayer dollars has been funneled to film and television production. Your tax dollars now pick up as much as 30 percent of qualified production costs of one of America’s most profitable and successful industries. Georgians see some benefits, it is true. The state has seen more productions. A couple thousand Georgians work in entertainment, producing everything from Tyler Perry’s hit movies to the poorly reviewed “Mean Girls 2.” But research by scholars on the left and right has found that most jobs “created” by movie productions are often temporary with limited upward mobility, the kinds of jobs that end when shooting wraps and the production company leaves. Film tax credits will never create an independent industry. Hollywood folks are clear that if the tax spigot is ever turned off, they’re gone. This isn’t a case of the state providing a bit of seed funding to a new industry. It’s subsidizing Hollywood productions for a few weeks’ work. Studio lobbyists are eager to ask for money, but promise no loyalty in return. When Georgia’s tax review commission looked at the credit last year, it recommended elimination. In response, those who benefit from the subsidies argued the credit doesn’t actually lose money since it is refunding tax that wouldn’t have been paid otherwise. I don’t buy that. Georgia had film productions even before the credit, but its credit is actually “transferable.” That means that if a Hollywood company gets a bigger tax refund than it owes, it can sell its unused tax credits to Georgians with big tax bills. That means the state is losing money it would have otherwise collected. Other states are realizing that there are better uses for scarce state tax dollars than expensive and ineffective film tax incentives. By our count, state subsidies for the film industry nationwide have dropped from their all-time record of $1.5 billion in 2010. Many states are at last evaluating the programs, especially after a major embezzlement scandal in Iowa sent film officials and producers to jail. Some states, like California and New York, are giving even more tax subsidies. California is now spending $100 million a year in film tax subsidies, and New York spends an astonishing $400 million a year. Topping them means essentially handing out money. Perhaps a better approach is rolling out the red carpet for everyone, not just the film industry. Instead of high taxes for everyone and low taxes for a few, why not even it out so everyone pays a little less? Small Georgia-grown film productions would benefit, as would loyal Georgia businesses that create jobs year after year. As for Hollywood films, Georgians could make some popcorn and enjoy movies that citizens in other states are subsidizing with their tax dollars. Joseph Henchman is vice president of legal and state projects for the Tax Foundation.

Iowa Film Office Future Still Uncertain

Another trip to the Iowa State House today. Just as we got to the rotunda level, the level for the entrances of both the Senate and House chambers, we were greeted by Senator Bill Dotzler, Jr., of Waterloo. And just as the senator joined Jay Villwock and me at a table near the senate chamber entrance, Wendol Jarvis also joined us. Thus, an impromptu meeting began.

Of course the topic of discussion was the Iowa Film Office. Rep. Jason Schultz and Senator Dotzler are the co-chairs of the Economic Development Budget Conference Committee, where the matter of deciding on funding for the Iowa Film Office has landed and where the life or death of that office will be decided. Schultz is determined to thwart funding of the IFO and Dotzler is determined to get at least some funding for it.

During our meeting, Wendol provided Senator Dotzler with a few examples of how much of a financial impact films can make on a community, examples based on his twenty years of experience as director of the IFO. The senator will use this information when trying to persuade opponents of the film office to change their minds.

A meeting of the above-mentioned conference committee was scheduled for one p.m. today in senate conference room twenty-two in the capitol building, where five members of each chamber were to face off in a discussion of budget matters, including funding of the film office. A few legislators waited for all committee members to appear but only four or five made it to the meeting and the discussion was postponed until next Monday.

Today Jay and I also spoke with Rep. Dan Kelley, who has carried our message to the House floor and tried to gain support for we in the Iowa film community. He, and his House colleagues Ruth Ann Gaines and Ako Abdul-Samad have been working together to widen support for us in the House chamber.

Wendol had a productive meeting with Director of Management and Budget, David Roederer, who urged that we all continue to contact legislators for their support.

We popped in to see the governor's office manager, Leo Hough, where we brought our latest news about our experiences today. Leo has kept the governor informed about what Jay and I have accomplished during our weekly visits to the Iowa State house.

The official ending date for this current Iowa legislative session has passed recently but the session is expected to continue one to two more weeks. During the remaining days of this session Jay and I will continue to make our Capitol visits and I will continue to keep you readers current with what's happening.

Stay tuned.

Gene L. Hamilton

photo shows Wendol Jarvis and Senator Bill Dotzler, Jr.

Troubling Times For Creative Iowans

Our experience at the Iowa Statehouse brings to my mind the following passage from A Tale of Two Cities by Charles Dickens:
"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way - in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only."

The best of times ended a few years ago when a handful of greedy scoundrels ruined it all for the rest of us who were just gaining momentum in the movie business. The worst of times began with those misdeeds and continues even now as Iowa legislators seem uninterested in supporting creativity in this state. The spring of hope emerged with each of the last three Iowa legislative sessions as Jay Villwock and I received supportive comments from senators and representatives but nothing seemed to take root when those sessions ended and now during the third session since the film office collapsed we learn that the Iowa House tea party-types are turning their collective backs on we actors and crew.

They voted for zero funding for the film office and now they will enter a conference committee with members of the senate to decide the fate of Governor Branstad's budget recommendation of a $400,000 allocation to fund the Iowa film office. We did have everything before us: movie crews, trucks, cameras and lights and the prospects of many movies slated to film here. Then we went the other way, thanks to deeds of evil.

Today Jay and I were joined by Dave Thrasher, who delivered documents containing useful talking points for a few of the Iowa House members, namely Ako Abdul Samad, Ruth Ann Gaines, and Dan Kelley. These rep's intended to use these points to support an amendment they planned to submit to the house but this plan unraveled as follows in this message from Rep. Kelley today: "Reps Abdul-Samad, Gaines and I left the meeting (with Senator Dotzler) this morning with a positive outlook. Sen. Dotzler is a strong supporter of a film office. finding the funding is an issue. Rep. Gaines and I withdrew our amendment. If we had allowed it to be voted on yesterday, this would have given too many Reps in both parties to go on record to opposition to full-funding of the office. This would have been detrimental to those in the conference committee who are supportive of the office. Conference committee on the bill is the most effective route to follow. Our amendment would have complicated the matter."


We did speak with an ally from the Iowa senate, Senator Jack Hatch, who hoped the governor would use his influence to gather more support for funding the IFO. He added that Senator Bill Dotzler, Jr. is one of the most important key players in all of this. We were also welcomed into the office of the director of the Department of Management, David Roederer. Mr. Roederer urged us to continue the fight and not to give up hope.

Gene L. Hamilton

Thanks, Doug Miller, For Alerting Us to This Article

My friend Doug Miller, owner of Great River Studios production company in the Quad Cities, brought the following to my attention today.

The following is from an article credited to the globegazette.com: "WORKFORCE DEVELOPMENT FUNDING: The Iowa Senate has revised its fiscal 2013 budget for economic development programs that includes $20 million for state business incentives, $200,000 to keep the Iowa Film Office operating and $2.3 million to maintain or reopen Iowa Workforce Development field offices.
The amendment Senate Democrats seek to attach to House File 2337 would allocate $1.1 million for satellite offices in Decorah, Fort Madison, Iowa City and Webster City and another $1.2 million to reopen IWD offices in Ames, Atlantic, Denison and Newton.

Sen. Bill Dotzler, D-Waterloo, the bill’s floor manager, said another $150,000 would be allocated to the state library to license an online resource to improve job skills and vocational test-taking abilities of unemployed or under-skilled workers.

The proposal also calls for $4 million for a regent universities innovation fund and would move the Iowa Film Office to the state Department of Cultural Affairs with funding for two full-time positions.

Iowa Film Office: Still A Fight But Increasing Hope

Jay's and my visit to the Iowa Statehouse today began with our meeting Rep. Dan Kelley, a staunch film supporter. He said he's been alert as he awaits the return of the film office bill to the House floor. I know he's been speaking with his colleagues on our behalf and feel fortunate that he is on the side of creative Iowans.

And we met our friend, Senator Bill Dotzler, Jr., who said the "props" bill (appropriations bill containing the IFO funding issue) would be "deferred" so amendments could be added, which I believe means that legislators can add their own issues to the bill before it is approved. Politics. Complicated.

While waiting on the rotunda level, Rep. Jason Schultz unexpectedly came over to explain why he voted for zero funding for the film funding bill a few weeks ago. Although he is not in support he did say there would be further negotiations on this matter and that it is certainly not a dead situation for us. He was very kind and if I said anything bad about him previously I now take it all back. He's doing what he thinks is best for his constituents.

Rep. Ruth Ann Gaines met with us in the House of Representatives lounge. She is a former high school drama teacher and has been speaking out for us this session. She said that she and fellow representatives Dan Kelley and Ako Abdul-Samad are putting together an amendment to support fully funding the Iowa Film Office. This would be attached to the Economic Development bill. Governor Branstad recommended allocating $400,000 to run the IFO.

We met a legislator going in and we met two legislators outside as well. While outside, I approached Rep. Dave Jacoby and apologized for getting him mixed-up, in a earlier report, with Rep. Jason Schultz, both of whom are bald, even balder than myself!!! He laughed it off and accepted my apology. I know that from previous talks with him he is a supporter of amply supporting the IFO.

I recognized Rep. Bob Hager who was also outside and asked what his position was on the film issue. He was quite friendly but said his primary concern was to preserve the unemployment office in his Allamakee district which faced elimination. He implied that there wasn't enough to support both that office and the IFO.

The pace of everything is cumbersome at the Statehouse, so this film funding issue still has some time left on the clock before it will be all over. Continued letters are still needed, so please email legislators to ask that they stand in support of full funding for the film office.

Gene L. Hamilton

You ARE Making An Impact!!!

Shortly after arriving at the Iowa Capitol Building today Jay Villwock and I met former Iowa Film Office director Wendol Jarvis. The three of us worked as a team today and before we could take our first steps we met Senator Brad Zaun, who said the film tax credit portion of the IFO funding bill was struck down in the senate, with his vote being the only one to keep the tax credits. He said this issue would likely go to a conference committee for further discussion. With the issue of tax credits now being removed I think legislators will be more inclined to support Governor Branstad's recommendation of funding the IFO with an allocation of $400,000, but I also think the Iowa House needs to receive more emails from the Iowa film community and others of you who may not be in the film industry but want film making to return to Iowa. Emails should state that film tax credits have NOTHING to do with the film office issue now. Many legislators, especially on the House side, have been skittish about funding the IFO because of their fear of further troubles with tax credits. Hard to believe, but this is quite true as Jay and I have learned from many discussions with these representatives over the past three legislative sessions.

The three of us also met with Rep. Dan Kelley, who does know the facts of this matter, and who has been in close touch with his House colleague and fellow film supporter, Ruth Ann Gaines. Rep. Gaines wants to add an amendment to the current effort to fund the big "Filed of Dreams" bill which would enable the expansion of the Dyersville site of that famous movie, an expansion to attract more tourists to Iowa. Rep. Gaines' amendment would emphasize the importance of funding of the IFO. Gaines' move is well-timed considering how popular that movie was and that it was the IFO under the leadership of Wendol Jarvis that brought the film to Iowa.

We popped in to see the governor's office manager,Leo Hough, a longtime friend of Wendol's. We went over our activities of the day with Leo, who always seems eager to keep up with what is happening with the film issue and who works directly with the governor.

Although very polite and generous with his time to speak with us today, Senator Paul McKinley seemed not inclined to offer his support to the film issue. He stated that we need to speak with Senator Dvorsky, but Jay and I have tried that many times only to be brushed off by him. I felt that Senator McKinley didn't understand the impact of films made in this state.

Rep. Anesa Kajtazovic spoke with us and indicated that she is interested in giving her support to the IFO being revived. She told us that she has personally received many emails from you readers out there, so THANKS to you for hammering away...it seems to be effective!!!

I stopped Senator Merlin Bartz on the rotunda level and he spoke with us and commented that his son is a musician who is eager to gain an agent. Jay and I gave him a suggestion as to who to contact, as did Wendol. I think Senator Bartz is an ally.

Here's what I think. The film tax credit issue is out. The IFO bill is free of that stigma. IF legislators ALL know this I think funding for the IFO will stand a much better chance of succeeding. Thus, it is still vital that you write to Iowa Rep.'s and senators, urging them to stress keeping Governor Branstad's FULL suggested allocation of $400,000 to fund the Iowa Film Office.

I don't know when the shuffling from the House to the Senate will end, but when does end we will need to come out of it with our film office once again in place with Wendol Jarvis leading it. It will take much effort to re-establish trust with movie producers, but Wendol has twenty years of IFO experience and lots of connections, so he is our best hope to get many of you working again.

Thanks so much for writing and helping this situation improve by your letters and calls.

Gene L. Hamilton

I Wonder And I Wonder

The pages of the calendar are rapidly being peeled off and the remaining days of the current Iowa legislative session are becoming fewer and fewer, so please do write to members of the Iowa House of Representatives now and tell them why it's so vitally important to fund the Iowa Film Office as per Governor Branstad's official budget report recommendation of $400,000. This sum is needed to relaunch the IFO, to purchase computers to replace computers pilfered by state employees when Governor Culver dropped the ax on film making here. The film office needs to start from scratch to create a locations file because the original file which contained hundreds of thousands of locations pictures and data was also taken and is lost, probably never to be found. When the film office returns, hopefully with Wendol Jarvis once again at the helm, movie producers will have to be convinced that Iowa actors and crew are not connected with past scandals. They'll need to once again see how beautiful Iowa landscapes and towns are and how honest and friendly Iowans are. Wendol can do a great job when he returns to head the IFO because he has Hollywood connections and years of previous IFO experience.

gene l. hamilton