$60M in state tax credits dries up way before red carpet rolls out for movie premieres
By Jason Cato
Published: Friday, December 14, 2012, 9:24 p.m.
Updated: Thursday, December 20, 2012
Pittsburgh was set to roll out the red carpet for its first movie premiere in decades on Saturday -- until tragic events in Connecticut intervened -- but Dawn Keezer laments the premieres that weren't.
“We've had to turn away business, which means we've had to turn away Pennsylvania jobs, which is sad,” said Keezer, director of the Pittsburgh Film Office.
More than a dozen television and movie projects passed on Pennsylvania because $60 million in state film tax credits was gone by Aug. 27, less than two months into the fiscal year, according to the state Department of Community and Economic Development.
“We spent all the money really fast,” Keezer said.
Tom Cruise's “Jack Reacher,” which was to premiere at SouthSide Works and was filmed in Western Pennsylvania between October 2011 and January 2012, will receive the tax credit, although the amount is undetermined. At least seven major projects interested in Western Pennsylvania moved on after learning that no more money was available, Keezer said.
Eastern Pennsylvania lost out on at least six feature films and two major television series.
“It's impossible to know how many projects have been lost because once the word is out that Pennsylvania has no more money, the phones just stop ringing,” said Sharon Pinkenson, director of the Greater Philadelphia Film Office.
Keezer and Pinkenson want Gov. Tom Corbett and legislators to bolster the film tax credit fund to as much as $150 million and approve it for multiple years, which would help land TV series and the work they bring year after year.
Corbett's office did not return calls for comment.
Supporters and critics of tax credits abound in the state capital and across the country, both sides armed with surveys and data they say prove incentives are — or are not — worth the cost in public dollars.
“Why are you subsidizing films? Are your education and other systems perfect?” asked Schuyler Moore, an entertainment lawyer in Los Angeles.
Moore believes there should be a federal tax incentive to keep projects from leaving the United States but that states should compete with what they have to offer in terms of locations, workforce and industry infrastructure such as studios and soundstages.
“It's just goofball,” Moore said. “The truth is it is fun and sexy, but it is a pig trough.”
The last federal film and television tax incentive program expired at the end of 2011, when Congress failed to extend it. States began offering incentives in 1999, when Missouri set aside $1 million to entice filmmakers. New Mexico and Louisiana in 2002 began offering uncapped incentives.
Today, more than 40 states and Puerto Rico offer some sort of incentive.
In September, California Gov. Jerry Brown extended an annual $100 million tax credit program until 2017 to help stem the exodus of projects and jobs from his state.
A study that the Los Angeles County Economic Development Corp. and the Hollywood Chamber of Commerce released last month showed the film and television industry in that county alone lost more than 16,000 jobs, down to 102,100, since 2004, the year Pennsylvania began its tax credit program.
Filmmakers can apply 25 percent of production expenses in Pennsylvania to offset state taxes, provided they spend at least 60 percent of their total production expenses in the state.
Starting this year, a 30 percent rebate is possible for projects using “qualifying production facilities,” including 31st Street Studios in the Strip District and Island Studios in McKees Rocks.
Pennsylvania has paid more than $300 million in tax credits for film and television projects that injected $1.4 billion into its economy, according to state figures.
Western Pennsylvania is on track to get more than $100 million in economic impact from the film industry for the fourth consecutive year, Keezer said.
“I believe states are doing a good job, and your state in particular,” said Dama Claire, co-owner of The Incentives Office, a consulting firm in Santa Monica, Calif. “Your growth has been regular. It's been well-maintained. Now it's time to talk about expanding the tax-credit program.”
State Sen. Wayne Fontana, D-Brookline, said he and other lawmakers plan to ask for a tax credit budget of $150 million for fiscal year 2013-14 and for a multiyear commitment at that level.
“We just need to be able to compete,” Fontana said. “I don't think we're going to get $150 million, but that would be great.”
Rep. Tim Krieger, R-Delmont, said he probably won't get the chance to vote to reduce the tax credit next year but would certainly oppose any increase.
“Why do we pick a particular industry to get a benefit that we don't give other businesses already here?” he asked.
A client with a TV show that Claire declined to identify chose Toronto over Pittsburgh this year because of the tax credits, she said.
Toronto also beat out Pittsburgh this year for “Hemlock Grove,” a TV series with a $40 million budget based on a novel written by former Charleroi resident Brian McGreevey featuring a teenage werewolf.
Philadelphia recently failed to land a film about the 1970s FBI sting operation known as “Abscam” because the tax credit fund is empty, Pinkenson said. The film will be set in the City of Brotherly Love but shot in Boston.
Jason Cato is a staff writer forTrib Total Media. He can be reached at 412-320-7936 or firstname.lastname@example.org.
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Business get incentives and tax credits all the time and it pays for the community and business directly. Which is better than letting the government and state decide for us with our taxes. We have an industry that has been successful in and around this area, let's continue to grow and feed it!
Submitted by: Eric on Saturday, December 15, 2012
Just as bad as sports owners. Make millions in profits, but look to the public to subsidize them. States are just as bad, competing with each other as to who can give away more while our infrastructure crumbles.