Louisiana, Wisconsin in different states of mind
EmptyIs 30% the new 25%?
Last week, Louisiana joined Ontario and Quebec in increasing its film-production tax credit to 30%. As the carrot on top of the carrot, the state's new law offers an additional 5% for in-state labor to encourage producers to hire locally -- making it 35% on local-hire payroll.
Quebec was the first major center to hit the 30% ceiling, quickly followed by Ontario. Louisiana is the first U.S. hub to follow suit, but it likely won't be the last.
While the champagne is popping in Louisiana, the glasses are empty in Wisconsin. That state has all but given up on the film industry after Gov. Jim Doyle exercised a line-item veto to place a deathlike limit on the state's 25% refundable credit: Instead of an available $1.5 million a year, the figure is capped at $500,000.
Last year, the state was flying high when Universal's "Public Enemies" shot in locales including Milwaukee, and it was looking forward to more shoots of that scale. Now those dreams are as dead as Dillinger.
"We all know it's the state of the economy," Film Wisconsin's Scott Robbe says. "People are much less apt to take risks on new developments through incentives. What's happening in Wisconsin is indicative of a national trend. Like everyone else, we are going to have to weather the storm."
Robbe says the state, with its cap, will attract small indie productions at best. A single big shoot like "Enemies" would drain the pool dry.
The small indie "No God, No Monster," starring David Strathairn, is due to start shooting this week. Like "Enemies," the 1920s period piece is taking advantage of Milwaukee architecture.
One problem facing lawmakers considering incentives is reconciling numbers being bandied about regarding economic impact, job creation and taxpayer costs.
"The evaluation of the program is only as good as the financial tracking," Robbe says. "And the problem here in Wisconsin is there were no really good financial tracking mechanisms put in place. Because it is a business whose intangibles are hard to track -- like tourism, for example -- it's hard to get an exact number."
Louisiana officials, however, say they have those numbers as they prepare to welcome more productions: The state says there was $429 million in production in 2007, resulting in an economic impact of $763 million. The City of New Orleans Office of Film & Video says 2008 saw $230 million in direct impact from the film and television industry.
"For every dollar we invest, we get $6.64 back on economic impact," says Chris Steely of the Louisiana Governor's Office of Film and Television Development.
Steely says the numbers were on everyone's mind while passing the new law, but he stressed that the state is in it for the long term and wants the industry to be a permanent fixture.
To show how serious it is, the program is now officially permanent. And as part of the new law, Louisiana instituted a buyback program of the credits at 85% of their face value, giving certainty to the producers that they will recoup a set amount of money.
Robbe, meanwhile, believes his state is being short-sighted.
"Louisiana is seriously in the game for the long haul, just like Canada," he says. "(This is an industry) that doesn't happen overnight, and if you think it does, you're deluded."
Robbe admits that each state must look at the numbers and ask whether productions are bringing beneficial long-term increases in jobs and revenue. But he says film and television jobs aren't akin to working in a factory, where one can be employed for 20 years, but rather a trade in which workers move from project to project.
"It's paramount that people who are working to build a TV and film business in their state educate lawmakers the realities of the business," he says.