Film industry supporters shift tactics to attract productions

RALEIGH | Stung by last year’s failings during the short legislative session, the region’s film supporters this winter decided to change their tactics.


Current film incentive legislation proposals

Gov. Pat McCrory
The governor’s proposed budget includes $10 million for the film grant program for each of the next two fiscal years.

N.C. House
Democrats, including Rep. Susi Hamilton, D-New Hanover, have introduced an economic development bill that would restore the 25 percent tax credit. The House GOP leadership failed to include any funding for film in its initial economic development bill, but has recently talked about introducing a new bill that would include financial support for film.
Separately, Rep. Ted Davis, R-New Hanover, has introduced legislation that would allocate $66 million to the state’s film incentive grant program for the 2015-16 fiscal year.

N.C. Senate
Sen. Michael Lee, R-New Hanover, has submitted a bill that mirrors Davis’ proposal in the House – $66 million for the grant program. The Senate’s GOP leadership has introduced an economic development bill that doesn’t include any funding for film.
Separately, Sen. Paul Lowe, D-Forsyth, has introduced a bill that would re-enact the 25 percent tax credit program.

Scrapped was the idea of pushing for a restoration of the state’s 25 percent film tax credit, an open-ended program that was loved by the film industry but scorned by many Republicans as a taxpayer giveaway to out-of-state Hollywood studios.

Instead, film backers decided to push for a beefed-up film grant program that would largely mirror the $10 million grant program that was eventually adopted for the first half of 2015.

The reason was practical as much as anything else, Wilmington Mayor Bill Saffo said. The mayor, a vocal supporter of the film industry, said that while everyone would prefer to have the old tax credit program back, it was pretty obvious that was never going to get through the GOP-controlled General Assembly.

“At the end of the day we were told it was going to be a grant program whether we liked it or not,” Saffo said.

So the film supporters have adapted, falling in line with the Republicans’ push to scrap many of the state’s incentive programs or change them into grant programs.

Saffo said the change in direction doesn’t mean the idea of bringing back the tax credit program is gone for good.

“And maybe down the road we’ll have an opportunity to reconsider that,” he said. “But I don’t see any support for doing that in the near term.”

That sentiment was echoed by state Sen. Michael Lee, R-New Hanover, who has sponsored a bill that would earmark $66 million for the film grant program in 2015-16 – legislation that was matched by state Rep. Ted Davis, R-New Hanover, in the House.

“I supported the tax credit program, too,” he said. “But we have to work with the structure that’s in place, and that’s what we’re trying to do, even as we try to increase the amount that’s in there.”

Still, there’s no guarantee there’s enough Republican political support to get a substantial film incentive bill through the General Assembly – even though officials fear there might not be much of a production industry left in North Carolina if legislators don’t. In 2014, nearly $170 million was spent by film and television productions in Southeastern North Carolina. This year, with several productions already having announced plans to leave, best estimates put spending at $40 million to $50 million.

Nevertheless, there could be, in showbiz parlance, time for a second act with the GOP leadership in the House announcing last week that they would float – with Democratic support – a new economic development proposal that would incorporate a host of incentive and recruitment programs, including film.

State Rep. Susi Hamilton, D-New Hanover, said the move was prompted by concerns about the lasting damage of doing away with so many successful economic development initiatives and the perceived foot-dragging of the state Senate to support new or beefed-up programs.

“This shows that the House is willing to work in a bipartisan way to pass a true economic development bill that would benefit all 100 of North Carolina’s counties,” she said.

But the pressure from the right to end any kind of taxpayer assistance to the film industry doesn’t look like it will be abating anytime soon.

Americans for Prosperity last week announced plans to launch a new series of anti-film incentive radio ads in most of the state’s major markets.

“Our new radio ad may give a few laughs to listeners, but there is nothing funny about lawmakers giving away millions of dollars to Hollywood film executives,” the conservative action group stated in a release. “Subsidizing Hollywood executives with our hard-earned money doesn’t create sustainable economic growth for our state – just bigger profits for a few companies.”

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