Uncap the film tax credit
Southwestern Pennsylvania has a long and rich history in the film business and it's well past time that we are given the resources needed to develop an industry that will work for all of Pennsylvania's economy. Recently, Senate Majority Leader Dominic Pileggi introduced legislation to uncap Pennsylvania's Film Tax Credit Program. This is precisely the right tool at the right time to open the film industry in our region to unlimited potential, creating countless jobs and bringing millions of dollars to businesses in our region.
Many people argue under the faulty premise that tax credits should directly generate money for the state. The function of a tax credit program is to build an industry and create jobs. In this way, all of the citizens of Pennsylvania benefit as new businesses thrive, employment opportunities grow and, with that growth, the coffers of the commonwealth benefit.
The PA Film Tax Credit program was created in 2004. Since that time, it has been markedly successful, creating jobs and bringing hundreds of millions of first-dollar new spending to Pennsylvania. In Southwestern Pennsylvania alone, we have seen 50 feature film and television productions with a first-dollar economic spend of nearly $500 million in the last five years!
Some critics of the film tax credit program believe the tax credit is a slap in the face to the hardworking people of Pennsylvania. The truth is that the film industry has an immediate, positive economic impact for our citizens and local businesses.
It's a false perception that movie sets are made up of Hollywood producers and film stars. The truth is that a typical film crew is made up of hundreds of local people employed as actors, crew, technicians, tradesmen, construction workers, drivers, office personnel and caterers. Without an adequate film tax credit, workers sit idle while the film industry moves to other states with uncapped tax credit programs like Massachusetts, Connecticut, North Carolina, Georgia, Louisiana and Illinois, or New York, with a $420 million per year tax credit guaranteed for the next five years.
In 2009, the General Assembly directed the Legislative Budget and Finance Committee to study the effectiveness of 18 state tax credit programs. The film tax credit program was studied by Economics Research Associates, an independent Illinois firm. It concluded that the motion picture industry had a high level of multiplier impacts and was in the top 10 percent of industries in the commonwealth for impacts. It also concluded that there was a “net fiscal gain to the Commonwealth of $4.5 million when considering all of the revenues generated by the entire industry.” The film tax credit program is the most powerful tool we have to attract the industry to our state and stay competitive.
In the last nine months, the Pittsburgh Film Office tracked 13 productions with a cumulative potential economic impact of more than $250 million that were lost to other states with better, more dependable programs. The inadequate incentives program was the primary reason stated by those films' producers as to why they were looking elsewhere.
Our film industry is at a standstill. The “test period” of the film tax credit program has proven more successful than anyone dreamed. I say uncap the program, roll the cameras and put our citizens back to work.
Dawn Keezer directs the Pittsburgh Film Office.