Tax incentives key to U.S. production levels

Federal incentives would boost efforts

WASHINGTON - The importance and value of production tax incentives was in focus during a panel of film office representatives here Tuesday morning.

Asked if U.S. federal incentives would make sense now that 40 states and DC have incentives programs, most were in favor - although to different degrees.

A federal program "would be of great value" as a supplement to states' efforts, said Richard Moskal, director of the Chicago Film Office.

Sharon Pinkenson, executive director, Greater Philadelphia Film Office, pointed out that just about every country has a film commission these days. "It's about time (for federal incentives)," she said. "The U.S. seems to be the only country that doesn't represent this industry."

Congressman Steve Scalise from Louisiana, meanwhile, suggested the federal government could do "something on the jobs side" incentives-wise to avoid job migration to such countries as Canada, Ireland and New Zealand instead of giving out additional production tax credits per se.

The panel also discussed the importance of incentives amid the recession, agreeing that they are key in this environment.

"This will be a record year in Georgia for production work attracted by the state," said Bill Thompson, deputy commissioner of Georgia Film, Music and Digital Entertainment. About 20 features have filmed in the state since the 2008 tax incentives bill, with 10 shooting in the first quarter alone, he said.

Pinkenson said incentives allowed her region to maintain the 2007 activity levels in 2008 despite the recession and credit crunch, which has made the financing of films tougher.

Without incentives, "clearly we would have lost that level of production," she said. "We're at capacity really."

Among the films currently shooting in Pennsylvania is M. Night Shyamalan's "The Last Airbender," which employs 650 people, she said.

Scalise said Louisiana has seen continued growth in production since introducing incentives in 2002 and has become the third-largest production state behind California and New York.

"We have been up every year" he said, adding that taxpayers have "gotten value from the incentives due to the economic boost."

Meanwhile, Chicago has seen more sluggish production momentum as of late. After a record year in 2007, "2008 started to drop off mid-year," said Moskal. He said the recession and SAG contract negotiations were among the reasons, but predicted the decline would be short-lived given the resources of Chicago and Illinois.

The panel was moderated by George Clooney's father Nick, a distinguished journalist in residence at American University's School of Communication & the Newseum.

The panel was part of the second biennial "Business of Show Business" symposium.