Alternatives to movie incentives aim to keep Michigan competitive
With the end of tax credits that spawned a growing Michigan film industry, new state incentives -- beyond the $25 million in direct subsidies approved for 2012 -- are a long shot for the near future.
But advocates of incentives, who say $25 million isn't enough to keep Michigan in the highly competitive game, aren't giving up.
Here are some possible scenarios:
• The $25-million direct subsidy could become the norm, and major productions such as "Oz" take Michigan off their possible location list.
"Oz" was approved for more than $40 million of refundable tax credits and is in preproduction at Raleigh Studios in Pontiac.
• The direct subsidy could be increased a lot or a little if the program proves successful and state revenues grow enough to allow more spending. Gov. Rick Snyder would consider this.
• A different type of tax credit -- one that could be sold since the state's tax format changed -- could be used, with a Louisiana program serving as the model.
State Sen. Majority Leader Randy Richardville, R-Monroe, is exploring this, but Snyder doesn't like credits.
State's goal: Make sure film grants benefit Michigan
First of three parts
Gov. Rick Snyder wanted a stripped-down business tax, one without loopholes and exemptions for every well-connected interest group. And that's pretty much what he got from the Legislature when it replaced the Michigan Business Tax with a 6% corporate income tax.
Since the movie and TV subsidies enacted in 2008 were calculated as part of each production's Michigan Business Tax (MBT), they will be history when the new tax -- to which virtually no media productions would be subject -- takes effect Jan. 1.
In their place, the Legislature approved Snyder's recommendation for $25 million in direct grants for media production, unconnected to the tax liability of investors or producers, for the state spending year that begins Oct. 1.
Officials in the Michigan Film Office and the Michigan Economic Development Corp. are in the early stages of developing a plan for the administration of that fund.
Film Office spokeswoman Michelle Begnoche said the grant-making procedures, which may or may not require legislative action, will almost certainly include criteria designed to maximize hiring of Michigan residents, spending in Michigan and promotional value to the state. She said administration officials also want to maintain as much flexibility as possible to control the size of the awards and limit reimbursements for spending deemed of little value to Michigan.
Under the original incentives program, Michigan taxpayers paid up to 42% of the cost of talent (stars, directors, etc.) up to $2 million per person. Begnoche said that cap could be reduced since "most of those ... expensive people don't live in Michigan."
Snyder administration proponents of the grant program said it will allow the state to target and control spending better, while still attracting film and TV production. Producers also benefit, they said, because the state money could be available up front, instead of at the conclusion of filming.
Exploring a few options
Entertainment industry advocates mostly reject that view and urge Snyder and the Legislature to consider a reconfigured tax credit.
They have a potential ally in Senate Majority Leader Randy Richardville, R-Monroe, who has expressed concern about the fate of investment made under the original incentives, especially the millions of dollars spent to develop Raleigh Studios in a former Pontiac auto plant.
Richardville has asked Senate staff to explore options outside the grant program, said spokeswoman Amber McCann.
One possibility, she said, is an incentives program like that in Louisiana, which provides transferable credits (which can be sold back to the state treasury) against its business and income taxes. The incentives program has been expanded in recent years to include the recording industry.
The annual cost to Louisiana taxpayers was not immediately available. But the state's film office says the credits have resulted in $3 billion in spending in Louisiana since they were enacted in 2002.
Snyder appears to have little interest in restoring tax credits in any form.
"The governor wants to see how the grant program works out," spokeswoman Sara Wurfel said. "He believed we needed to get tighter control over the spending and a more transparent process, and that's what the new law does."
Another alternative -- and one Snyder may be more willing to entertain, Wurfel said -- would be increasing the money available under the new grant program. Film industry advocates told lawmakers in tax hearings that at least $100 million annually would be needed to sustain a viable movie and TV industry in Michigan.
Wurfel said Snyder would be open to increasing the $25-million program if it appears to be working and state finances stabilize enough to make it possible. But putting film subsidies in direct competition with school, health or community funding could be politically dicey.
Where things stand now
In the meantime, advocates for the industry will press for more. Some Oakland County legislators have expressed concern that the downsized incentive program could place the investment and jobs at Raleigh Studios in jeopardy.
Sen. Mike Kowall, R-White Lake Township, said he would like to "do something," but it's hard to know what, before the new tax and budget plans begin later this year.
John Truscott, a longtime Lansing public relations consultant who has been working with an industry coalition called Michigan Film First, said, "Right now, everybody is just trying to catch their breath ... and assess what (the new rules) mean."
The Film Office is doing the same thing, Begnoche said, but without the expectation that the rules will change soon.
"We've been given our directive," she said. "We're going to focus on what we know ... and that's that we have $25 million to work with next year, and we're going to try to use it in a way that's best for Michigan."
Monday, July 4, 2011
Sunday, July 3, 2011
Article Courtesy of the DenverPost.Com
business
Colorado's new film commission chief wants to boost state's movie-making incentives
By Jason Blevins
The Denver Post
Posted: 07/03/2011 01:00:00 AM MDT
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: 303-954-1374 or jblevins@denverpost.com
Utah's Incentives
2007
4 major productions
$798,000 incentives paid
2008
10 major productions
$3.4 million incentives paid
2009
9 major productions
$3.9 million incentives paid
2010
19 major productions
$7.5 million incentives paid
New Mexico's Incentives
2007
22 major productions
$17.7 million awarded in rebates
2008
30 major productions
$46.2 million awarded in rebates
2009
24 major productions
$76.7 million awarded in rebates
2010
16 major productions
$65.9 million awarded in rebates
Colorado's new film commission chief wants to boost state's movie-making incentives
By Jason Blevins
The Denver Post
Posted: 07/03/2011 01:00:00 AM MDT
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: 303-954-1374 or jblevins@denverpost.com
Utah's Incentives
2007
4 major productions
$798,000 incentives paid
2008
10 major productions
$3.4 million incentives paid
2009
9 major productions
$3.9 million incentives paid
2010
19 major productions
$7.5 million incentives paid
New Mexico's Incentives
2007
22 major productions
$17.7 million awarded in rebates
2008
30 major productions
$46.2 million awarded in rebates
2009
24 major productions
$76.7 million awarded in rebates
2010
16 major productions
$65.9 million awarded in rebates
Saturday, July 2, 2011
Maneater Article (Mo. U.) by Caitlin Swieca
Missouri Film Office cut from state budget
The office assisted in production of Oscar-nominated films 'Up in the Air' and 'Winter's Bone.'
By Caitlin Swieca
Published July 1, 2011
The Missouri Film Office closed Thursday after Gov. Jay Nixon cut its state funding.
The office was established in 1983 as a resource for production companies looking to film in the state. Its employees provided companies with information about local film crews, tax credits and other incentives to film in Missouri.
"As you may know, this is the last day of existence for the Missouri Film Office," director Jerry Jones said in a letter Thursday. "It began in 1983 and since then has been responsible for bringing hundreds of millions of dollars in production revenue to the state, plus immeasurable worldwide publicity."
The office assisted in the production of two Oscar-nominated movies: "Up in the Air," which was filmed in St. Louis, and "Winter's Bone," filmed in southern Missouri.
The General Assembly voted to provide $150,000 to fund the office after Nixon cut it out of his proposed budget in January. When approving the budget, Nixon cut the funding again.
Sen. Kurt Schaefer, a member of the Missouri Film Commission Board, said he was disappointed in the governor's lack of support for the office.
"It's unfortunate the governor doesn't support the film industry in the state of Missouri even though the General Assembly was supportive of it," he said.
Schaefer said the state will suffer economically due to the loss of film production.
"When you have film production going on, whether it be 'Up in the Air' or 'Winter's Bone' or a smaller film, you get a lot of local economic activity as a result of that," he said.
Missouri is one of a very small number of states that will not have an office of this type.
"We know that, to many of you, this industry is your livelihood, and while Missouri becomes one of just a few states to have no film office, (assistant director) Andrea (Sporcic) and I both sincerely hope that the production industry here will overcome this setback and become thriving and vibrant," Jones said.
Schaefer said the state might also lose business from smaller productions.
"In addition to some of the films that are done for entertainment, the film office was also very helpful with commercial film productions for industries or associations, so a lot of smaller productions will also suffer," he said.
The salaries of the office's two employees, Jones and Sporcic, were paid by MU.
The functions of the office will be reallocated to the Division of Tourism, according to a statement by Sporcic.
"It has been my great pleasure to work as the assistant director for the last six years," she said in the statement. "I am very proud to have been a part of the many movies, TV segments and commercials shot in our beautiful state."
Cutting the office will save the state $175,000.
The office assisted in production of Oscar-nominated films 'Up in the Air' and 'Winter's Bone.'
By Caitlin Swieca
Published July 1, 2011
The Missouri Film Office closed Thursday after Gov. Jay Nixon cut its state funding.
The office was established in 1983 as a resource for production companies looking to film in the state. Its employees provided companies with information about local film crews, tax credits and other incentives to film in Missouri.
"As you may know, this is the last day of existence for the Missouri Film Office," director Jerry Jones said in a letter Thursday. "It began in 1983 and since then has been responsible for bringing hundreds of millions of dollars in production revenue to the state, plus immeasurable worldwide publicity."
The office assisted in the production of two Oscar-nominated movies: "Up in the Air," which was filmed in St. Louis, and "Winter's Bone," filmed in southern Missouri.
The General Assembly voted to provide $150,000 to fund the office after Nixon cut it out of his proposed budget in January. When approving the budget, Nixon cut the funding again.
Sen. Kurt Schaefer, a member of the Missouri Film Commission Board, said he was disappointed in the governor's lack of support for the office.
"It's unfortunate the governor doesn't support the film industry in the state of Missouri even though the General Assembly was supportive of it," he said.
Schaefer said the state will suffer economically due to the loss of film production.
"When you have film production going on, whether it be 'Up in the Air' or 'Winter's Bone' or a smaller film, you get a lot of local economic activity as a result of that," he said.
Missouri is one of a very small number of states that will not have an office of this type.
"We know that, to many of you, this industry is your livelihood, and while Missouri becomes one of just a few states to have no film office, (assistant director) Andrea (Sporcic) and I both sincerely hope that the production industry here will overcome this setback and become thriving and vibrant," Jones said.
Schaefer said the state might also lose business from smaller productions.
"In addition to some of the films that are done for entertainment, the film office was also very helpful with commercial film productions for industries or associations, so a lot of smaller productions will also suffer," he said.
The salaries of the office's two employees, Jones and Sporcic, were paid by MU.
The functions of the office will be reallocated to the Division of Tourism, according to a statement by Sporcic.
"It has been my great pleasure to work as the assistant director for the last six years," she said in the statement. "I am very proud to have been a part of the many movies, TV segments and commercials shot in our beautiful state."
Cutting the office will save the state $175,000.
Friday, July 1, 2011
Los Angeles Business from bizjournals - by I-Chun Chen
California film tax credits added $3.8 billion to economy
Los Angeles Business from bizjournals - by I-Chun Chen
Date: Wednesday, June 29, 2011, 1:45pm PDT - Last Modified: Wednesday, June 29, 2011,
California’s film and television tax credit program has generated more than $3.8 billion for the state’s economy over its two years so far and created more than 20,000 jobs, according to a study by Los Angeles County Economic Development Corp.
In 2009, the California legislature approved a five-year program of $100 million in annual tax credits on qualifying film and television productions. About 110 productions have been approved under the program so far.
In its study, the LAEDC looked at the effects of the first 77 productions that were approved for allocation of tax credits totaling $198.8 million and found that state and local governments received a return of $201 million from taxes, permits and fees.
For every tax credit dollar approved under tax credit program, at least $1.13 in tax revenue will be returned to state and local governments, the study said.
In addition, the productions approved under the program created 20,040 jobs and generated labor income totaling $1.4 billion.
The study also found that for each tax credit dollar allocated, total economic activity in the state will increase by $20.11. Labor income, including to the self-employed, will increase by $7.41 per tax credit dollar, while total GDP in the state will increase by $8.48 per tax credit dollar.
Initial tax revenue returned to local and state governments will be $1.06 per tax credit dollar, with the highest return on state tax credits generated by productions with large above-the-line expenditures.
The productions also could attract additional, or ancillary, production activity. Each additional $100 million in follow-on production spending facilitated by the local availability of talent, supplies and services generates at least $10 million in state and local taxes, or an additional 7 cents per current dollar of tax credit allocated, the study said.
Los Angeles Business from bizjournals - by I-Chun Chen
Date: Wednesday, June 29, 2011, 1:45pm PDT - Last Modified: Wednesday, June 29, 2011,
California’s film and television tax credit program has generated more than $3.8 billion for the state’s economy over its two years so far and created more than 20,000 jobs, according to a study by Los Angeles County Economic Development Corp.
In 2009, the California legislature approved a five-year program of $100 million in annual tax credits on qualifying film and television productions. About 110 productions have been approved under the program so far.
In its study, the LAEDC looked at the effects of the first 77 productions that were approved for allocation of tax credits totaling $198.8 million and found that state and local governments received a return of $201 million from taxes, permits and fees.
For every tax credit dollar approved under tax credit program, at least $1.13 in tax revenue will be returned to state and local governments, the study said.
In addition, the productions approved under the program created 20,040 jobs and generated labor income totaling $1.4 billion.
The study also found that for each tax credit dollar allocated, total economic activity in the state will increase by $20.11. Labor income, including to the self-employed, will increase by $7.41 per tax credit dollar, while total GDP in the state will increase by $8.48 per tax credit dollar.
Initial tax revenue returned to local and state governments will be $1.06 per tax credit dollar, with the highest return on state tax credits generated by productions with large above-the-line expenditures.
The productions also could attract additional, or ancillary, production activity. Each additional $100 million in follow-on production spending facilitated by the local availability of talent, supplies and services generates at least $10 million in state and local taxes, or an additional 7 cents per current dollar of tax credit allocated, the study said.
Sunday, June 26, 2011
Our Film Future In Iowa
Acting gigs are pretty much non existent now in Iowa. The ads and infomercials are around, the non-paying movie projects for film festivals. And how about a Tea Party rally where Jay Villwock and I, plus forty-some others were hired to wear costume shop military uniforms and plant flags on a stage at a rally put together by Tea Party officials?
Although Jay and I are veterans, the organizers had a former army drill sergeant teach us how to march. Because most of those hired for this event were not actors and also were not vets, the marching scenario was a classic comedy scene. Instead of turning in unison, marchers would turn towards each other. Fellow actor and miltary veteran Rick Septer was there, as well as Jeremy Ray Smolik, who worked on movies shot in Iowa before the program was killed.
Pathetic fare, yet there is hope for a better movie future in Iowa: Wendol Jarvis. Wendol was our first Iowa film office director and brought many, many movies to this state. He has solid Hollywood connections as well as political skills and contacts. He's driven thousands of miles and compiled hundreds of pages of graphs and charts and data related to how to improve the Iowa film office, all on his own time and dollar.
Wendol seems a likely candidate to lead the Iowa film office again. I am fully confident that he will rekindle interest in the minds of film producers and smooth the path for those people to bring their projects back to us.
Although Jay and I are veterans, the organizers had a former army drill sergeant teach us how to march. Because most of those hired for this event were not actors and also were not vets, the marching scenario was a classic comedy scene. Instead of turning in unison, marchers would turn towards each other. Fellow actor and miltary veteran Rick Septer was there, as well as Jeremy Ray Smolik, who worked on movies shot in Iowa before the program was killed.
Pathetic fare, yet there is hope for a better movie future in Iowa: Wendol Jarvis. Wendol was our first Iowa film office director and brought many, many movies to this state. He has solid Hollywood connections as well as political skills and contacts. He's driven thousands of miles and compiled hundreds of pages of graphs and charts and data related to how to improve the Iowa film office, all on his own time and dollar.
Wendol seems a likely candidate to lead the Iowa film office again. I am fully confident that he will rekindle interest in the minds of film producers and smooth the path for those people to bring their projects back to us.
Saturday, June 25, 2011
StatesmanJoural.Com Article:Can it apply to IOWA????
Legislators tweak tax breaks
Some are capped, but new ones are created
Written by
Peter Wong
While Oregon lawmakers were scaling back existing tax breaks on Friday, they also were creating another tax break whose effect on state tax coffers — or private investment — will not fully unfold in the next two years.
By a 26-1 vote, the Senate approved House Bill 3672, which reduces tax breaks from the $40 million they were projected to cost the state in the next two years to the $10 million made available by legislative leaders.
The bill, which goes to Gov. John Kitzhaber, eliminates several little-used tax breaks, extends or reduces others, and revamps the much-debated business energy tax credit into three new credits — all of them capped. In addition to the state's budget situation, lawmakers were compelled under a 2009 law to review specified tax credits on a six-year cycle.
"For many years, many of us were concerned we were scrutinizing one part of our budget and not scrutinizing another part of it," said Sen. Jackie Dingfelder, D-Portland.
The bill also reduces a fund for film and video production — contributing investors get the tax credit — and changes a credit for collection and production of woody material used for biomass energy.
The only dissenter was Sen. Larry George, R-Sherwood, who said, "There are some of us who would have voted for even more cuts in giveaways by government."
By a 22-5 vote, the Senate also approved Senate Bill 817, which creates a tax credit for investors in businesses that go into low-income areas based on the U.S. Census and defined by the U.S. Treasury. That bill goes to the House, which is likely to vote on it Monday.
Although the credit would allow investors to recoup 39 percent spread over seven years, they would have to wait two years before claiming their first credits — and they would have to pay all the money back if the business leaves the area or they are repaid any portion of the principal.
It is tied to the federal "new markets" tax credit, created by Congress in 2000 and renewed last year as part of a two-year extension of 2001 tax cuts under President George W. Bush. Investors can qualify only if they are turned down for a traditional bank loan.
"Oregonians need the hope of new jobs and a turnaround in the economy," said Kevin Campbell, a lobbyist who advocated for the credit during a committee hearing May 19.
But Jody Wiser, executive director of Tax Fairness Oregon, said the tax break would result in a seven-year loss of $79 million to state coffers. (SB 817 caps the annual amount at $16 million through mid-2016, and at $4 million for a single project.)
"The state could do this far, far more cheaply — and likely would not choose to add to the public subsidy of typical projects getting federal new-market tax credits," she said.
Just 10 projects qualified for federal credits in the Mid-Valley, she said, adding up to $21.9 million of the $375 million in credits statewide.
"I've been leaning 'no' most of the week," said Sen. Alan Bates, D-Medford. "But having heard the floor debate — and knowing the economic needs of this state in producing new jobs and bringing in more capital — if we watch it carefully over the new few years and cut that program off if it's not doing what we expect it to do, I feel comfortable going forward."
Sen. Ginny Burdick, D-Portland, said the concept has been examined over the past couple of years.
"I am quite convinced that this bill will have a significant effect in low-income communities in our state," said Sen. Frank Morse, R-Albany, the bill's floor manager. "It's worthy of a shot."
Some are capped, but new ones are created
Written by
Peter Wong
While Oregon lawmakers were scaling back existing tax breaks on Friday, they also were creating another tax break whose effect on state tax coffers — or private investment — will not fully unfold in the next two years.
By a 26-1 vote, the Senate approved House Bill 3672, which reduces tax breaks from the $40 million they were projected to cost the state in the next two years to the $10 million made available by legislative leaders.
The bill, which goes to Gov. John Kitzhaber, eliminates several little-used tax breaks, extends or reduces others, and revamps the much-debated business energy tax credit into three new credits — all of them capped. In addition to the state's budget situation, lawmakers were compelled under a 2009 law to review specified tax credits on a six-year cycle.
"For many years, many of us were concerned we were scrutinizing one part of our budget and not scrutinizing another part of it," said Sen. Jackie Dingfelder, D-Portland.
The bill also reduces a fund for film and video production — contributing investors get the tax credit — and changes a credit for collection and production of woody material used for biomass energy.
The only dissenter was Sen. Larry George, R-Sherwood, who said, "There are some of us who would have voted for even more cuts in giveaways by government."
By a 22-5 vote, the Senate also approved Senate Bill 817, which creates a tax credit for investors in businesses that go into low-income areas based on the U.S. Census and defined by the U.S. Treasury. That bill goes to the House, which is likely to vote on it Monday.
Although the credit would allow investors to recoup 39 percent spread over seven years, they would have to wait two years before claiming their first credits — and they would have to pay all the money back if the business leaves the area or they are repaid any portion of the principal.
It is tied to the federal "new markets" tax credit, created by Congress in 2000 and renewed last year as part of a two-year extension of 2001 tax cuts under President George W. Bush. Investors can qualify only if they are turned down for a traditional bank loan.
"Oregonians need the hope of new jobs and a turnaround in the economy," said Kevin Campbell, a lobbyist who advocated for the credit during a committee hearing May 19.
But Jody Wiser, executive director of Tax Fairness Oregon, said the tax break would result in a seven-year loss of $79 million to state coffers. (SB 817 caps the annual amount at $16 million through mid-2016, and at $4 million for a single project.)
"The state could do this far, far more cheaply — and likely would not choose to add to the public subsidy of typical projects getting federal new-market tax credits," she said.
Just 10 projects qualified for federal credits in the Mid-Valley, she said, adding up to $21.9 million of the $375 million in credits statewide.
"I've been leaning 'no' most of the week," said Sen. Alan Bates, D-Medford. "But having heard the floor debate — and knowing the economic needs of this state in producing new jobs and bringing in more capital — if we watch it carefully over the new few years and cut that program off if it's not doing what we expect it to do, I feel comfortable going forward."
Sen. Ginny Burdick, D-Portland, said the concept has been examined over the past couple of years.
"I am quite convinced that this bill will have a significant effect in low-income communities in our state," said Sen. Frank Morse, R-Albany, the bill's floor manager. "It's worthy of a shot."
Thursday, June 23, 2011
from Below The Line News by Leslie Lindeman
Credit the 30% Tax Credit: Shooting ‘Em Up in Chicago
June 22, 2011 | By Leslie Lindeman
Hollywood’s been braving the cold, shooting on the ‘L’ and eating plenty of the world’s best pizza – 2010 was a banner year for filming in Chicago. Michael Bay’s Transformers 3, Ron Howard’s The Dilemma, Steven Soderbergh’s The Contagion, and Jake Kasdan’s, Bad Teacher, each contributed to the record $161 million spent filming in the Windy City last year. That number represented a 54 percent increase over a dismal 2009.
The city also benefited from five pilots shot there in 2010, including The Boss, starring Kelsey Grammer. Produced by Lionsgate and set to air on Starz, director Gus Van Sant began shooting episodes in Chicago in April. The show is said to be only loosely based on the mayoral careers of Richard J. Daley and his son, Richard M. Daley, each of whom served for more than 20 years. Legendary columnist Mike Royko’s book about Richard J. Daley is called, Boss.
Also, Fox TV’s, Playboy Club – think, Mad Men with bunnies – is a series about the first playboy club which opened in Chicago in 1960. The show has been picked up and will air on NBC in the fall. It’s currently shooting in Chicago.
While some governmental bodies dither over whether to pass incentives packages, the Illinois legislature has been squarely behind the concept since 2003 when the state passed its first wage credit. In fact, the state is so gung-ho about its incentive plan that the law has no sunset.
Following three tough years from 2007 through 2009, when the film business in Chicago and the state was hit by the same trio of negative factors that affected the rest of the industry (the writer’s strike, the threatened SAG strike, and the national economic meltdown), Illinois enjoyed a strong comeback last year. The $161 million in spending and 8,000 job hires were both record marks. The state’s incentive plan was a big part of the success, with a 30 percent tax credit as its cornerstone, Betsy Steinberg, director of the Illinois Film Office, says.
Steinberg says the tax credit has been responsible for pulling half a billion dollars worth of film business into the state since its inception, and creating 10,000 jobs.
“Our tax credit is like having a gift card with the Illinois Department of Revenue,” Steinberg explains. “You can use it to reduce or eliminate your taxes, and if you don’t have a tax liability with the state, you can sell it to someone who does,” she says.
But what if an out-of-state production company has no Illinois tax liability, or owes taxes that are less than the tax credit it’s earned?
“That’s often the case,” Steinberg says. “The third-party market for these credits is very, very strong.” Banks, utilities, a large department store and many others are all eager buyers because there is usually about a 10 percent discount on the credits. The selling price “has consistently been 88 – 91 cents on the dollar,” Steinberg says. “No production company has ever been left with a tax credit it couldn’t sell,” she says. Production companies don’t have to use the tax credit immediately; they can be carried forward five years.
When it was first passed, the tax credit was 25 percent and only covered the wages of Illinois workers, but eventually the lawmakers worked it up to 30 percent and expanded the umbrella to cover all “qualified Illinois production spending,” Steinberg says. “The law focuses on Illinois vendors and residents, but it’s incredibly broad,” Steinberg says. “It covers anything you would purchase or rent for use in your production, and any and all wages and salaries” paid to workers who were valid Illinois residents prior to the commencement of the production. The limit on salaries is $100,000.
Chicago, Illinois.
In order to qualify for the tax credit, productions are required to submit a diversity plan demonstrating efforts to include minority workers on the crew. The state gives productions an additional 15 percent tax credit (for a total of 45 percent) on the wages and salaries of workers who earn at least $1,000 and live in economically disadvantaged neighborhoods with at least 10 percent unemployment.
Chicago’s film and television infrastructure got a huge shot in the arm last month when a long-planned $85 million deal was finalized for Toronto-based Cinespace Studios to buy an enormous, shuttered steel mill on the city’s near southwest side and refurbish it into the largest U.S. studio outside of Hollywood. Toronto’s famed Mirkopoulos family has run Cinespace Studios there for 23 years. The facility is a critical piece of Canada’s film and television infrastructure and has hosted more than 1,000 films.
“We’ve always had great respect for our crews here,” Steinberg says. “That’s perhaps the number one reason such a huge percentage of our business is repeat customers,” she says. Pointing to the recent run of films, she notes Ron Howard’s positive experience burning up the city with Backdraft (1991) and Steven Soderbergh’s favorable reaction to his previous time in Chicago making The Informant (2009). Meanwhile, Michael Bay was effusive in his praise for the city after officials and citizens alike patiently accommodated the production’s closing of the city’s premier commercial district on Michigan Avenue for most of an entire weekend. The “Magnificent Mile” serves as the location for the film’s concluding battle scenes.
“Yes, we’ve had highly skilled and hard-working crews, and we’ve been respected for that,” Steinberg says, “and our iconic locations speak for themselves. Now, however, opening Cinespace, and especially after it’s fully built out, this absolutely takes us to another level,” she says.
Governor Pat Quinn said the new stage space was a game changer. “Now we are the complete package – truly a world class film destination,” he said.
Cinespace Chicago Film Studios is located on nearly 50 acres of the former Ryerson Steel property just three miles southwest of Chicago’s downtown Loop area. When it’s fully built out the facility will include 1.2 million square feet of space. The studio has already served as the location for filming Boss, as well as portions of Transformers 3, A Nightmare on Elm Street, and the already-canceled TV show The Chicago Code.
The purchase by the Mirkopoulos family also has national implications. When the family opened Cinespace Studios in Toronto in 1988, it heralded the continuing flight of shooting from Los Angeles and the U.S. to Toronto and Canada. “We hope this is part of accelerating the turnaround,” Steinberg says.
Steinberg is one of a number of film office directors with a strong production background, having made documentaries for A&E and the History Channel, as well working as a line producer filming commercials. She relocated to Chicago from the East Coast in 1998 and took the film office position in January 2007.
Asked whether Chicago can turn the corner from its traditional position as a location productions travel to when they need a large, older city, to becoming a destination for any kind of shooting, Steinberg points to The Express, the 2008 Gary Fleder bio-pic about Ernie Davis (Rob Brown), the first African-American to win college football’s Heisman Trophy. The film was released in 2008. Dennis Quaid plays Davis’s Syracuse University coach.
“There were 103 locations in the film, none of them in Illinois,” Steinberg says. “But every frame of the film was shot here and I can tell you the tax credit was a big part of Universal’s decision to come here.
“And that was before the opening of the new studio. Just watch what we can do now,” she says.
June 22, 2011 | By Leslie Lindeman
Hollywood’s been braving the cold, shooting on the ‘L’ and eating plenty of the world’s best pizza – 2010 was a banner year for filming in Chicago. Michael Bay’s Transformers 3, Ron Howard’s The Dilemma, Steven Soderbergh’s The Contagion, and Jake Kasdan’s, Bad Teacher, each contributed to the record $161 million spent filming in the Windy City last year. That number represented a 54 percent increase over a dismal 2009.
The city also benefited from five pilots shot there in 2010, including The Boss, starring Kelsey Grammer. Produced by Lionsgate and set to air on Starz, director Gus Van Sant began shooting episodes in Chicago in April. The show is said to be only loosely based on the mayoral careers of Richard J. Daley and his son, Richard M. Daley, each of whom served for more than 20 years. Legendary columnist Mike Royko’s book about Richard J. Daley is called, Boss.
Also, Fox TV’s, Playboy Club – think, Mad Men with bunnies – is a series about the first playboy club which opened in Chicago in 1960. The show has been picked up and will air on NBC in the fall. It’s currently shooting in Chicago.
While some governmental bodies dither over whether to pass incentives packages, the Illinois legislature has been squarely behind the concept since 2003 when the state passed its first wage credit. In fact, the state is so gung-ho about its incentive plan that the law has no sunset.
Following three tough years from 2007 through 2009, when the film business in Chicago and the state was hit by the same trio of negative factors that affected the rest of the industry (the writer’s strike, the threatened SAG strike, and the national economic meltdown), Illinois enjoyed a strong comeback last year. The $161 million in spending and 8,000 job hires were both record marks. The state’s incentive plan was a big part of the success, with a 30 percent tax credit as its cornerstone, Betsy Steinberg, director of the Illinois Film Office, says.
Steinberg says the tax credit has been responsible for pulling half a billion dollars worth of film business into the state since its inception, and creating 10,000 jobs.
“Our tax credit is like having a gift card with the Illinois Department of Revenue,” Steinberg explains. “You can use it to reduce or eliminate your taxes, and if you don’t have a tax liability with the state, you can sell it to someone who does,” she says.
But what if an out-of-state production company has no Illinois tax liability, or owes taxes that are less than the tax credit it’s earned?
“That’s often the case,” Steinberg says. “The third-party market for these credits is very, very strong.” Banks, utilities, a large department store and many others are all eager buyers because there is usually about a 10 percent discount on the credits. The selling price “has consistently been 88 – 91 cents on the dollar,” Steinberg says. “No production company has ever been left with a tax credit it couldn’t sell,” she says. Production companies don’t have to use the tax credit immediately; they can be carried forward five years.
When it was first passed, the tax credit was 25 percent and only covered the wages of Illinois workers, but eventually the lawmakers worked it up to 30 percent and expanded the umbrella to cover all “qualified Illinois production spending,” Steinberg says. “The law focuses on Illinois vendors and residents, but it’s incredibly broad,” Steinberg says. “It covers anything you would purchase or rent for use in your production, and any and all wages and salaries” paid to workers who were valid Illinois residents prior to the commencement of the production. The limit on salaries is $100,000.
Chicago, Illinois.
In order to qualify for the tax credit, productions are required to submit a diversity plan demonstrating efforts to include minority workers on the crew. The state gives productions an additional 15 percent tax credit (for a total of 45 percent) on the wages and salaries of workers who earn at least $1,000 and live in economically disadvantaged neighborhoods with at least 10 percent unemployment.
Chicago’s film and television infrastructure got a huge shot in the arm last month when a long-planned $85 million deal was finalized for Toronto-based Cinespace Studios to buy an enormous, shuttered steel mill on the city’s near southwest side and refurbish it into the largest U.S. studio outside of Hollywood. Toronto’s famed Mirkopoulos family has run Cinespace Studios there for 23 years. The facility is a critical piece of Canada’s film and television infrastructure and has hosted more than 1,000 films.
“We’ve always had great respect for our crews here,” Steinberg says. “That’s perhaps the number one reason such a huge percentage of our business is repeat customers,” she says. Pointing to the recent run of films, she notes Ron Howard’s positive experience burning up the city with Backdraft (1991) and Steven Soderbergh’s favorable reaction to his previous time in Chicago making The Informant (2009). Meanwhile, Michael Bay was effusive in his praise for the city after officials and citizens alike patiently accommodated the production’s closing of the city’s premier commercial district on Michigan Avenue for most of an entire weekend. The “Magnificent Mile” serves as the location for the film’s concluding battle scenes.
“Yes, we’ve had highly skilled and hard-working crews, and we’ve been respected for that,” Steinberg says, “and our iconic locations speak for themselves. Now, however, opening Cinespace, and especially after it’s fully built out, this absolutely takes us to another level,” she says.
Governor Pat Quinn said the new stage space was a game changer. “Now we are the complete package – truly a world class film destination,” he said.
Cinespace Chicago Film Studios is located on nearly 50 acres of the former Ryerson Steel property just three miles southwest of Chicago’s downtown Loop area. When it’s fully built out the facility will include 1.2 million square feet of space. The studio has already served as the location for filming Boss, as well as portions of Transformers 3, A Nightmare on Elm Street, and the already-canceled TV show The Chicago Code.
The purchase by the Mirkopoulos family also has national implications. When the family opened Cinespace Studios in Toronto in 1988, it heralded the continuing flight of shooting from Los Angeles and the U.S. to Toronto and Canada. “We hope this is part of accelerating the turnaround,” Steinberg says.
Steinberg is one of a number of film office directors with a strong production background, having made documentaries for A&E and the History Channel, as well working as a line producer filming commercials. She relocated to Chicago from the East Coast in 1998 and took the film office position in January 2007.
Asked whether Chicago can turn the corner from its traditional position as a location productions travel to when they need a large, older city, to becoming a destination for any kind of shooting, Steinberg points to The Express, the 2008 Gary Fleder bio-pic about Ernie Davis (Rob Brown), the first African-American to win college football’s Heisman Trophy. The film was released in 2008. Dennis Quaid plays Davis’s Syracuse University coach.
“There were 103 locations in the film, none of them in Illinois,” Steinberg says. “But every frame of the film was shot here and I can tell you the tax credit was a big part of Universal’s decision to come here.
“And that was before the opening of the new studio. Just watch what we can do now,” she says.
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