Florida film incentives program will sunset without lawmakers’ support

By Paul Guzzo | Tribune Staff

Following three straight years of failing to convince the Florida Legislature that the film and television industry could be a major economic driver for the state, industry leaders will attempt to do so once again in January.

Only this time there is more at stake.

The current incentive program sunsets on July 1, 2016, meaning that if legislators do nothing, the program ends.

It has been hard enough to bring big productions to the state on a limited basis without state incentives, say industry leaders. Without an incentive program on the books, they said, it would send a message to productions that Florida does not want to compete for major film and television productions.

“While we haven’t been able to get any more funding for this program the past three years, at least we’ve had one,” said Film Florida president Michelle Hillery. “This is a very critical year for our industry.”

To ensure a new incentive program is created, Film Florida — a nonprofit advocacy association for the industry — is recommending the state’s already conservative program become even more so.

Under the current program, a production can receive a base of 20 percent back on in-state expenditures with a cap of $8 million following two audits of receipts.

Film Florida suggests the percentage be lowered to a base of 15 percent, the cap halved to $4 million and cash rebates be used in place of tax credits.

The association also advocates for doing away with the current first-come/first served manner in which incentives are doled out. In its place, the organization suggests a rating system to identify which projects can have the highest return on investment for the state.

“We’re trying to make sure the money goes further,” said Dale Gordon, executive director of the Tampa Hillsborough Film and Digital Media Commission.

Chris Ranung, founder of the Congress of Motion Picture Associations, a group that represents those who work in film and television and small businesses that support them, said several ideas are being floated to use other means than state funding to replenish the state incentive program. Ideas include a loan program and an equity/ownership program.

“The focus is on creating pragmatic, business-savvy legislation that includes a replenishing provision that will empower the motion picture industry eventually to be self-supporting,” he said.

To that end, Film Florida suggests a loan program that could mimic one proposed unsuccessfully in past years to support high-impact television series. Last year’s proposed QTV Fund, for instance, sought to ease a financial burden on executive producers of such series, who often must cover all costs and are not reimbursed by a network until production is complete, requiring loans from lenders who want a percentage of royalties as well as interest.

The idea for the QTV Fund called for providing low-interest loans to these producers through a trust fund that in time would become self-sustainable.

“QTV had some support from legislators who did not support our bill and vice versa,” said Film Florida’s Hillery. “So we should incorporate that within our bill to take a look at it as a bit of a pilot program.”

She expects at least some of these suggestions to be part of a bill being drafted by state Rep. Mike Miller, an Orlando Republican.

Miller said his bill will be filed before the next legislative session begins Jan. 12.

“I want to be respectful to the industry in trying to remain competitive with the other states but also need to be respectful of leadership which has a difficult time with the idea of incentives,” Miller said. “I am trying to straddle both sides and make something that leadership will say, ‘This is not throwing good money after bad.’”

Hillsborough film commissioner Gordon said while she thinks Film Florida will suggest $50 million a year be placed into the program’s incentive pot, that issue will not be addressed until a program is in place for the coming years.

“If we don’t have a program approved now it will become more difficult to get a new one approved as we get further away from the old one,” Gordon said. “At least now we can point to the success of the existing one. We won’t have the luxury in the future.”

The current program was funded with $296 million in 2010. That money was supposed to last through 2016 but was tapped by 2012.

Different groups have different ideas on whether the fund was a success.

Those working in the industry point to a Florida Office of Film and Entertainment report that states the $296 million added $4.1 billion to Florida’s gross state product — a 15 to 1 return — and created more than 170,000 jobs that paid over $900 million in wages.

But opponents of using public funds as incentives for the industry quote a study conducted by the Florida Legislature’s Office of Economic and Demographic Research showing the state receives just 43 cents back per dollar it awards in tax incentives to productions.

That amounts to a loss of almost $170 million on the $296 million in incentives.

That study is accurate but misunderstood, say proponents of the film industry, as it only reflects how much money in tax receipts the government gets back rather than the full economic impact.

Switching away from tax credits to a cash rebate system will address this issue, Hillery said.

Gus Corbella, chairman of the Florida Film and Entertainment Advisory Council that is the lead advisory body to Florida leaders on entertainment issues, would not comment on the proposed changes because a bill has not yet been filed.

But he agreed this year is of the utmost importance to the production industry in Florida.

“This is do or die time,” Corbella said. “Is this an industry the Legislature feels is worth supporting and growing or is it an industry they are willing to allow to pick up and move to a neighboring state?”

Georgia, with its unlimited pot of annual tax incentives for film and television and no per-production cap, has landed two movie productions this year based on stories from the Tampa Bay area — “Live By Night” starring by Ben Affleck about rum running in Ybor City during the 1920s and 1930s, and “Gifted” starring Chris Evans about a St. Petersburg man who fights for custody of the young daughter of his deceased sister.

Both mimicked the actual locales through set design.

Under Film Florida’s proposed $4 million-per-film cap, said Tony Armer, St. Petersburg-Clearwater film commissioner, makers of “Gifted” would have chosen this area as their production hub.

Corbella of the Florida Film and Entertainment Advisory Council remains optimistic this is the year that the Legislature will make a larger commitment to luring film and television productions to the state.

“I am hopeful given the fact that we are coming to the finish line that the Legislature will step up after what has been a very challenging past three years,” he said. “The decision rests squarely on the Legislature’s shoulders now.”



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