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Pa. tax credits for film industry might be halted

| Wednesday, Feb. 11, 2009

A state lawmaker said Tuesday she wants to eliminate tax breaks for the film production industry as the General Assembly seeks ways to close a $2.3 billion budget deficit.

"The governor is freezing wages and considering layoffs of state workers, and it would be unconscionable in this environment to continue awarding tax credits to film companies," state Sen. Pat Vance said in a statement. "Failure to suspend this tax credit sends the wrong message about our fiscal priorities."

Vance, a Republican who represents Cumberland County and part of York County, introduced a bill to suspend the Film Production Tax Credit program until 2011.

Supporters of the program, which extends a 25-percent tax credit to production companies that spend at least 60 percent of a film's budget in Pennsylvania, say it generates millions of dollars for the state economy.

"The tax credit has been an unqualified success in attracting production to Pennsylvania, and has been more successful than anticipated," said Chuck Ardo, a spokesman for Gov. Ed Rendell, who wants to keep the program. "This is no time to take any steps that will result in (fewer) jobs and less economic activity."

The program, which is capped at $75 million, was included in the $29 billion budget Rendell proposed last week.

Dawn Keezer, director of the Pittsburgh Film Office, said without the credit production companies won't even consider the Keystone State for future film production. Even Vance's proposal could dissuade them.

"July is only five months away. Studios will be saying, 'Maybe Pennsylvania won't have the tax credit this year,' " Keezer said. "If they kill the incentive, they will kill the industry" in the state.

Vance pointed to a state report that last year said just $18.3 million in new tax revenues were generated because of the program. Keezer countered that it can take a year or two for film production to be completed, and for all of the economic impact to be tallied. In the Pittsburgh region, she estimates that 11 productions last year generated $50 million in economic benefits, including jobs for theatrical carpenters, electricians and specialists in wardrobe and sound production.

The Senate finance committee yesterday introduced a resolution calling for all tax credit programs to be reviewed. Republican state Sens. John Pippy of Moon and Jane Orie of McCandless, who is a member of that committee, said they would first examine those reviews before determining whether the credit should be kept.

"We're hearing from both sides," Pippy said. "We want to be able to look everything before we make a decision."

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