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Film incentive bills aim to keep crews in state
Director of Photography Tim Orr looks through a camera while filming for the movie "Provinces of Night," at Seventh and Princess streets Monday, May 19, 2009.
Buy Photo PHOTO BY MIKE SPENCERPublished: Friday, May 22, 2009 at 11:36 a.m.
Last Modified: Friday, May 22, 2009 at 11:36 a.m.
Filmmaking is a word-of-mouth industry. You get your next job if you did your previous job well and you didn't ruffled the feathers of anyone who matters. That's social politics.
But the politics of filmmaking often goes much further than that, particularly when incentives are involved.
In a nutshell, the current North Carolina film incentives package gives a 15 percent tax rebate to any film or television production whose qualifying expenses are at least $250,000, according to N.C. General Assembly bills. The maximum the state will give back, though, is $7.5 million.
Those qualifying expenses include "goods and services leased or purchased," which could be anything from pencils to portable toilet waste disposal.
They also include production-related insurance and cast and crew wages, though those have limits as well. Anyone who makes more than $1 million doesn't get a rebate on his or her salary. That's too bad for Tom Cruise and Angelina Jolie, but still makes local crew members who haul the equipment and set up the lights pretty happy.
Some lawmakers and, of course, those in the film business, want to make changes to our package. And the battle has been colorful.
In March, Sen. Julia Boseman, D-New Hanover, and Sen. Linda Garrou, D-Forsyth, each introduced bills to increase the percentage from 15 to 25 percent. In April, Rep. Pryor Gibson, D-Anson, Union, and Rep. Danny McComas, R-New Hanover, co-sponsored a bill for the same reason in the House.
All three bills are working their way through the political process now.
"It's in my back yard, it's in my home county, even before I went into elected office I've been involved with the film industry when I was with the Chamber," McComas said. "I can see it first hand, I know what it does, I know what it is. I see the people in the film industry. They're buying homes, they're supporting our restaurants, our local retail, our hotel industry, our tourism."
McComas says many of his colleagues are behind the bill. Right now, the legislature is in the midst of budget planning will act once that plan is debated. Whether or not higher incentives will be a part of that is anybody's guess. But so far, he said, no one has stepped up to strongly oppose it.
"I am cautiously optimistic that it's going to happen," McComas said. "I can't tell you for sure and I can't tell you how, but the sentiment is that we've got to compete with the other states. We've got to make sure that we don't lose any traction."
Sen. Phil Berger, Rep.-Guilford, Rockingham is one of the legislators opposing the bill. He said he isn't totally against incentives in general, but voted against the original film incentives bill.
"When they push through something that is in essence a direct taxpayer subsidy of the overhead for the film industry, it struck me that there was a huge unfairness in doing that if we're not going to do that to every business in the state of North Carolina," he said. "You know, there are people in the piedmont of North Carolina and in the mountains where we have lost thousands of jobs that if the government paid 15 percent of the overhead of those companies, we might still have those jobs. I just saw that the way it was structured was inappropriate as far as taxpayer dollars are concerned."
Berger spoke specifically about the state's massive loss of textile and furniture industry jobs as well as other manufacturing positions.
But Aaron Syrett, director of the North Carolina Film Office says if we don't act now on film incentives, the film industry could very easily go the way of the textile manufacturers this state used to be known for.
"It's proven than for 25 years North Carolina has been a leader in this industry and fortunately or not unfortunately, this is the way the industry has gone and we need to do something to retain the business," he said.
In April, the film "The Last Song" starring Miley Cyrus and written by North Carolina writer Nicholas Sparks was set to film around Wilmington but switched to Georgia at the 11th hour, citing that state's significantly higher incentives package.
Georgia offered a 30 percent refund to filmmakers and no cap on counting what actors are paid, according to the Associated Press.
Production accountant Johanna Klingenberger, of Wilmington, is working on the film "The Blind Side" in Georgia.
"I am in Georgia spending my money here where the work is instead of spending it in North Carolina where my home is and where I would like to be spending it," she wrote in an e-mail. "The reason films are here is because of the incentive - no other reason."
South Carolina, where crew members from the Wilmington area work on the Lifetime TV series "Army Wives," offers up to a 20 percent rebate on wages and up to a 30 percent rebate on supplies. Other states, including New York and Louisiana, also have higher incentive packages than North Carolina.
To help legislators determine the value of incentives, several North Carolina film groups, including the N.C. Film Office, have pooled $60,000 for a study to determine the economic impact filmmaking has on the state and local communities.
The study is being conducted by a private company, Ernst & Young. But Sen. Berger says this new study is flawed before it gets started because the bill is being funded by the film industry.
"You tell me what answer you want," he said, "And I'll find you a study that will give you that answer."
Syrett said his organization and the others involved, which include regional film offices and private businesses, wanted an honest look at the industry and they wanted something tailor-made to this state's circumstances.
"Giving false information wouldn't do any good," he said.
Those results, eventually, could be compared to independent studies that the University of North Carolina Charlotte and the University of North Carolina Wilmington are conducting now, he said.
Film office studies and academic studies could match up, but they don't always come to the same conclusions.
According to a recent Associated Press article, Ernst&Young conducted a similar study in New Mexico and New York. In both states, the company's studies concluded incentives create thousands of jobs and boost state and local tax collections.
This is at odds with a similar study by the Arrowhead Center, an economic development arm at New Mexico State University, according to the AP. The Arrowhead Center found the state gets only 14 cents back in taxes for every dollar that it gives the film industry.
But real numbers showing revenue returned after a film tax rebate isn't the only criteria politicians need to look at, according to some.
"It's hard to put a price tag on when a film shows up on screen. You can't really buy a billboard that large," Syrett said. "This industry, it's a clean industry, it puts money through the economy quicker than any other industry"
"You can't put a price to, you know, when a film is being produced downtown and it's 10 o'clock at night and people are working and how the tourists and everybody will converge to watch what's going on.," McComas said. "You can't put a price to the fact that the film industry, they live in Wilmington, they go to our movies, to our restaurants, they support it. And now more than ever we need our economy to get back on. This is one of those things."
Amy Hotz: 343-2099
On Twitter.com: @AmyHotz
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