Film incentives: Legislature turning its back on a sure shot
Published June 16, 2014
Editorial by Winston-Salem Journal, June 15, 2014.
Despite urging from industry professionals, community supporters and convincing evidence of economic advantages, our legislature seems determined to allow the tax incentive program that brings the film industry to North Carolina to expire on Jan. 1.
A state House member, Republican Rep. Ted Davis of New Hanover County, proposed a compromise incentive program last week, but it was voted down in the chamber’s GOP-led finance committee, the Journal’s Bertrand M. Gutierrez reported. Instead, the Senate has offered the House a lukewarm replacement to the program.
The Senate’s proposal would award grants, totaling $20 million, rather than offer tax incentives. But that’s much less than the total $61 million that the current incentive program paid in 2013.
“I don't think our representatives who voted to support this realize that the parameters set in this bill will … dramatically slash the industry statewide,” Rebecca Clark, the executive director of the Piedmont Triad Film Commission, told the Journal.
“Why in the world would Hollywood care to mess around with North Carolina under this new system when they can get a much better deal somewhere else?” Andrew Rodgers, the executive director of the RiverRun International Film Festival asked.
In the wake of the defeated proposal, we’ve already heard reports of film companies like Screen Gems reconsidering its investment in North Carolina, and actors based in Wilmington applying for jobs in other states.
We understand that some in the legislature want to do away with tax incentives in favor of a broader sales-tax base and lower corporate and income tax rates. And like it or not, their majority allows them to implement such a plan. They believe a lower corporate tax rate will be more attractive to employers than tax incentives.
But as Republican Rep. Jeff Collins of Rocky Mount, who opposed the compromise bill, all but acknowledged, that’s a lure that won’t apply to out-of-state filmmakers.
“I had three of these executives come to my office last year, and I was talking to them about the fact that we weren’t doing this in a vacuum. We were decreasing corporate tax rates – they made it very clear to me that they don’t pay corporate tax rates in North Carolina,” he told the Journal.
The film industry in North Carolina is a proven money maker. From 2007 to 2012, the film industry spent more than a billion dollars here – and that’s not just for the salaries of movie professionals, but for the ancillary workers – caterers, carpenters and hotel owners – who live here. The return on the tax incentives has been rated as high as nine to one. And while our legislatures are cutting our film program, other states are strengthening theirs.
It’s almost like finding a money tree and deciding that we should ship it to Georgia.
It’s not too late for the legislature to reverse its course. But though we may be movie fans, we’re not enjoying this cliff-hanger.
June 16, 2014 at 9:20 am
Richard Bunce says:
All businesses in the State need tax and regulation relief not just one favored by the left. Nice of the left to finally admit that taxes and regulations do have negative impact on businesses though.
