The Latest State to End Film Tax Credits

By Pat Forgey

Gov. Bill Walker has signed legislation ending a state subsidy program for the film industry, even while proclaiming his support for the motion picture business in Alaska.

“This does not mean our administration is not supportive of this important industry,” Walker said Tuesday in a prepared statement announcing that on Monday he signed Senate Bill 39.

The news of the bill signing was not a surprise; Walker had unilaterally suspended the program months ago in the face of declining state oil revenues.

Still, supporters of efforts to use the incentives to build a film and television production industry had made a last-ditch attempt to keep the program alive, even if suspended, in hopes that the state’s finances would turn around and the program could be affordable again.

Carolyn Robinson, owner and executive producer of the Anchorage film production company SprocketHeads, urged Walker to veto the bill.

She highlighted for him an article from an Alaska Airlines in-flight magazine about the Hawaii film-industry support program, and the associated benefits to tourism there.

“The Alaska Film Production Tax Credit Program should be supported and expanded,” Robinson said.

Because Alaska has only minimal taxes, it subsidized the industry with tax credits that film and TV productions in Alaska could sell to the few companies that do pay substantial taxes.

Walker said that since the program was created in 2009 the state has spent about $9 million a year on the subsidies. Ending it was just the first of many difficult decisions the state will face in coming years, he added.

With the state’s budget deficits growing, support for the subsidies waned in the Legislature, and Sen. Bill Stoltze, R-Chugiak, who had opposed creation of the program in the first place, sought its repeal. His legislation passed 14-6 in the Senate and 23-17 in the House of Representatives, largely along party lines with Republicans joining Stoltze in opposition.

Walker said he thought the program was popular with the public, but that the state could not justify it at a time when it was closing two Alaska State Trooper stations.

He said the state would continue to support the industry in other ways, such as connecting film producers and directors with Alaska location scouts and contractors, and working with the Alaska Film Group trade association to see that any film work done in Alaska will take advantage of the in-state workforce.

How much film work might be might be affected is unclear. Some productions, such as “Deadliest Catch,” were filmed in Alaska before the incentive program, but the movie “Hunter-Killer,” which was to have been shot in Whittier, pulled out of Alaska after Walker suspended the program.

Robinson said Stoltze’s bill has “almost destroyed” the Alaska program, and will prevent the state from doing what Hawaii has done to bolster its economy.

“It’s heart-breaking to read how our sister state of Hawaii has built, and continues to support and cash in on, a thriving film (and tourism) industry,” Robinson said.

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