Which industries will follow filmmakers out of state?

| July 14, 2015

12081853371627177650shuttermonkey_Movie_Clapperboard.svg.medEditorial by Fayetteville Observer, July 14, 2015.

The film industry is all but dead in North Carolina because a General Assembly incentives jihad has sent movie producers scurrying to other states offering better deals.

We hope the movies aren’t the canary in our coal mine, singing of other corporate losses to come. Distaste for the incentives game is a reasonable reaction to the giveaways required to lure corporate business. But unless we’ve got a better idea, playing the game is the only pragmatic strategy around.

Dumping the game will send millions – eventually billions – of dollars in jobs, local spending and tax revenue to other states. But because our economic-development tools are largely determined by the ideologues running the N.C. Senate, that’s just what we face.

North Carolina’s film-incentive program was allowed to die at the end of last year. So far, legislative leaders have no inclination to revive it. Instead, they appropriated $10 million a year for film-production grants – a slim fraction of spending under the old incentive program.

As a story in Sunday’s Greensboro News & Record reported, that program refunded 25 percent of the qualified money that production companies spent in North Carolina. Between 2007 and 2012, Hollywood spent $1.3 billion here. The state paid $112 million to the filmmakers. And yet, the state still earned nearly $60 million in tax revenue during that time.

At this time last year, in the final year of the tax-credit program, there were 40 productions spending a total of $268 million and providing jobs to 19,000 people. This year, 13 productions are spending $70 million. The grant program funding will go to one TV series and one movie.

Most of the others are heading out of town, many to South Carolina and Georgia, which offer 30 percent rebates to filmmakers. Like North Carolina, those states are under firm Republican control, but political leaders there put a higher value on cash flow than on rigid ideology.

In a press release last week, Georgia Gov. Nathan Deal said the film industry spent $1.7 billion in his state in the last fiscal year, which ended June 30. Forty-two productions are filming in Georgia this summer. More than 100 new film-related businesses have set up shop there. Guess where a lot of them came from.

This is the same reason Volvo and Boeing spurned North Carolina and chose South Carolina. We’re not just uncompetitive, we’re even changing the rules to send existing businesses packing.

But Phil Berger and his fellow Senate leaders are plugging their ears so they won’t hear the canary sing.


Category: NC SPIN Perspectives - Opinions from NC Leaders & Organizations

Comments (2)

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  1. Richard L Bunce says:

    Let’s lower taxes and regulations for ALL businesses in NC including existing and new businesses and end the practice of government bureaucrats picking losers and worse losers. Let the market decide which products and services are worth having in NC.

  2. bruce stanley says:

    Using taxpayer dollars for film industry incentives is the same as using tax dollars to incent the auto industry- they are both essentially bribery to a special interest. The GOP Senate is on the right track by lowering the corporate income tax rate, lowering the personal income tax rate (but increasing the standard deduction personal exemption for low income earners) and broadening the base. This will be good for all businesses, not just targets. Keep doing what you are doing, Senator Berger- the out of state businesses will come and the in state businesses will receive the same low rates to help grow their businesses.