June 13, 2013

Bill would woo movie, TV production companies with tax break

Financial incentive sought to augment state's natural beauty, unusual quality of light as lure for production companies

By Bob Keyes bkeyes@pressherald.com
Staff Writer

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click image to enlarge

Eric Matheson is working to convert the South Portland Armory, seen here on May 22, into a movie sound stage.

Maine Sunday Telegram photo by John Patriquin

Rep. Lance Harvell, R-Farmington, authored a similar bill earlier in the session. Elements of his proposal were incorporated into L.D. 1409. "It's pretty bad when movies about Maine are filmed in North Carolina," Harvell said.

Advocates position film incentives as progressive economic development and a sound way to generate tourism and jobs. Detractors say the bill would give money to big-time movie producers from out of state. Numerous studies in recent years have questioned the cost and value of movie incentives.

According to an April report in the New Orleans Times-Picayune, the Louisiana Legislative Auditor's Office estimated that tax credits cost Louisiana almost $170 million in 2010. In return, it received about $27 million in direct tax revenue.

The Boston Globe reported that Massachusetts' film subsidy program cost taxpayers $44 million in tax credits in 2011 and created the equivalent of 1,200 full-time jobs. The Department of Revenue said most economic benefits went to Hollywood and other locales.

Only 35 percent of the $176 million that production companies spent in Massachusetts in 2011 went to residents and companies in the state, according to the Globe story. The state recouped just 16 cents in new tax revenue for every $1 it gave up in subsidies in 2011, the most recent year with complete data.

Massachusetts enacted its incentive tax plan in 2006. Since then, more than 40 movies have been made there, generating more than $1 billion in direct film-related revenue, according to one film-industry estimate. Among the big ones: "Gone, Baby, Gone," "Shutter Island" and "The Town."

It's worth noting that the opening sequence for "Shutter Island" was filmed at Acadia National Park in Maine; after that, the crew moved to Massachusetts.

Among those who question the value of incentives are Maine residents Bernard Martin and Cameron Bonsey, who lobbied to bring King's "Bag of Bones" to Maine. They worked with the production team from Sennet Entertainment and the Legislature to improve the incentives in 2009. They set up meetings among the producers, the author, then-Gov. John Baldacci and legislators.

Their efforts failed. Lacking a better financial package in Maine, Sennet took the film to Nova Scotia.

"Halifax doubled very well for us," Gary said. "Halifax looks a lot like Maine."

Gary urged legislators to think about incentives not as a subsidy for a wealthy industry, but as a jobs bill. Movies support skilled labor and help create jobs, he said.

To demonstrate that point for a skeptical state, Gary said his company paid a local crew in Arizona its per diem wages with $2 bills. The company asked merchants and local policymakers to track the greenbacks.

"Within four or five days, those $2 bills were everywhere -- in restaurants, bars, movie theaters, gas stations, clothing stores," he said.

King declined an interview request for this story, but a spokeswoman for the Bangor-based horror writer said he remained committed to the cause.

"He would love to have more movies made here, but there is not much you can do," King aide Marsha DeFilippo said. "As they exist now, the incentives are just not enough to entice moviemakers to come here."

Martin and Bonsey both have reconsidered their support for overly generous incentives.

"I believe less and less in film incentives as I go along," said Bonsey, a former TV producer who works in marketing in Portland. "I think it's silly to simply pass incentives to bring projects to Maine. Yes, there is an economic impact, but I think you really have to look at what a project does to market Maine."

Rather than enact sweeping changes to the incentive package, Maine might be wiser to choose a single major movie project to support, and test the economic effect of more generous incentives, Martin said. That way, with hard evidence in hand, movie advocates would have an easier time proving to legislators and skeptics that incentives not only bring movies to the state, but help create jobs and spur tourism.

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