Film industry is paying attention to Illinois’ tax-credit freeze


GREG HINZ ON POLITICS

Gov. Bruce Rauner’s move to defer action on any new applications for Illinois’ film tax credit is showing signs of playing well—in other states.

Kenneth Blaine, a New Jersey-based consultant who works with movie and TV producers, sent an email to clients and studio execs this week reviewing “alternate options” to Illinois.

“In view of the recent press release” from Rauner announcing the decision, Blaine wrote, “our team would like to share some of our favorite state incentive programs for film and commercial production.”

He added, “While we sincerely hope that Illinois will begin (acting on) applications again soon, here are some great options to consider during the suspension.”

The email went on to talk about the glory, financial and otherwise, to be found in Massachusetts, Pennsylvania, New Mexico, Mississippi and other states that have tax credits still being offered.

In an interview, Blaine, who works for a company that matches buyers with sellers of transferable credits, as is legal in Illinois, said he hasn’t seen much impact yet from Rauner’s decision, but that will grow with time.

“I know a lot of the production firms in Illinois and the Midwest are really dependent on the credit,” which covers up to 30 percent of qualifying local expenditures. The current situation isn’t too bad because “they’re still accepting apps in Illinois. So long as you go ahead and shoot, you should get your money, eventually.”

But if the hold “lasts for a long time, whether it’s several months or a year-plus, it will have an impact.”

Rauner aides didn’t respond to a request for comment.

The freeze was part of a “first wave” of $400 million in spending cuts ordered by the governor amid a continuing stalemate with legislative Democrats over the proposed 2016 state budget.

Expect to see worse cuts any day now—and certainly if the state begins its fiscal year July 1 without a budget in place.

3:45 p.m. update: Rauner spokeswoman Lyndsey Walters responds: “The Madigan-Cullerton budget is unbalanced and does not address the necessary structural reforms needed to turn around the state of Illinois. Tax incentives alone cannot turn our state around. They play an important role, but the major cost drivers of doing business must be addressed.”

The reference is to House Speaker Mike Madigan and Senate President John Cullerton.

http://www.chicagobusiness.com/article/20150610/BLOGS02/150619984/film-industry-is-paying-attention-to-illinois-tax-credit-freeze

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