Posted 15 November, 2008 in FilmUSA
Hollywood Reporter 11-08
The credit crunch and the crumbling economy has put the nation’s many film tax incentives under the microscope as states debate their overall effectiveness.
At the locations panel Saturday at the American Film Market, the question of how long states can maintain the present course of tax rebates and credits in the face of mounting job losses and bleeding state budgets took center stage. (A refundable tax credit, instituted in such states as Michigan and New Mexico, acts more like a rebate and sees states issue a check to production companies. A transferable tax credit, like the ones in Louisiana and Rhode Island, sees states issue credits that the production then sells via brokers to those looking to offset tax liability.)
Some states are even questioning this “subsidization” of the film industry after reports like that one that claimed Louisiana gave more than $27 million in credits to “The Curious Case of Benjamin Button.”
The scrutiny has local film commissioners and those involved in local film production on the defensive.
“We’re not giving away money,” says Tony Wenson, COO of the Michigan Film Office. “We’re really incentivising new business growth and job creation in the state.”
Adds Jeff Spillman, who runs production-services firm S3EG: “They are not a subsidy for film, they are a subsidy for the development of the economy.”
Michigan instituted its program — which includes the possibility of an eye-catching 42% credit — in April. Since then, it has seen an explosion in production: A dozen movies have wrapped, and four are in production. That’s up from the previous year, when the state hosted one film.
The forecast is for about $100 million of direct spend in the state, a figure that does not include ancillary spending, like the money film crews spend after work.
According to insiders, Clint Eastwood’s upcoming “Gran Torino,” one of the high-profile movies shot entirely in Michigan, will receive about $5 million in credits once its audit is complete. “Youth in Revolt” received $4 million.
Wenson declined comment on the numbers but points out that when all is said and done, the final credit outlay will look more like 35%, not the much-ballyhooed 42%. A production receives 42% credit if it shoots in select cities; in the rest of the state, a production gets 40%, though that’s only if it uses a Michigan crew. Since almost all productions have been importing crews — Michigan is only beginning to create its infrastructure — the credit is only 30%.
“That number is not going to kill the budget,” Wenson says.
Some states are hearing a growing call to cap credits. That idea was brought up in Michigan but quickly quashed.
West Virginia, on the other hand, capped its incentives at $10 million a year. The limit was instituted to prevent the state from being overrun by productions as well as to maintain control over growth.
“Ten million dollars is a very manageable number for us,” Jamie Cope of the West Virginia Film Office says.
Louisiana, meanwhile, is standing by “Benjamin Button,” supporting the film after it pumped millions into the New Orleans economy, which is still recovering from Hurricane Katrina. Jennifer Day of the New Orleans Office of Film & Video said the production helped refurbish the city by sprucing up, restoring and fixing the locations it used.
“They were helping to rebuild this city by location by location,” she says.
As for its tax-credit scheme, which includes a 25% motion picture credit, film heads point out that if there are no buyers for the credits in these recessionary times, the state will buy them. The current price is 72 cents on the dollar, rising to 74 cents in 2009.
“It’s important to stress that the economy has its issues, but there is a fail-safe — and that fail-safe is the state of Louisiana,” says Bill Hess, from the city of Alexandria’s office of economic development
Posted 7 November, 2008 in FilmUSA
The Producers Guild of America’s FilmUSA Committee presents a seminar featuring the considerations & choices a Producer must face when making the fundamental decision of where to shoot their film. We will be utilizing an actual case study: an independently financed $2M feature film which has yet to commit to a location. This project is “The Farm”, Branded Pictures Entertainment’s (J. Todd Harris and Marc Marcum) next production. Using a panel of Producers, Production Managers and Film Commissioners, this study will give attendees a side-by-side comparison of the best creative & financial choices for this film.
DATE: SATURDAY, NOVEMBER 15, 2008
LOCATION: Technicolor Theater: 2345 North Ontario Street, Burbank, CA
(One block east of Hollywood Way).
TIME: 10 am – 12:30 pm
MODERATOR: TBD
PANELISTS:
Amy Lemisch, Film Commissioner, CALIFORNIA
Robert Scott Fort, Line Producer [PGA], CALIFORNIA
Dawn Keezer, Film Commissioner, PITTSBURGH, PA
Laura Greenlee, Line Producer [PGA], PITTSBURGH, PA
Scott Robbe, Film Commissioner, WISCONSIN
Nick Langholff, Line Producer, WISCONSIN
Jerry Jones, Film Commissioner, MISSOURI
Jeanine Rohn, Line Producer [PGA], MISSOURI
Jill Simpson, Film Commissioner, OKLAHOMA
Chad Burris, Line Producer, OKLAHOMA
Peter Jasso, Film Commissioner, KANSAS, participating, but not attending
Joel Feigenbaum, Line Producer, KANSAS, participating, but not attending
COST: Free to Members of the PGA, $50 for non-members, payable by check or cash at the door
PARKING: Free parking – entrance off Ontario Street
RSVP: kyle@producersguild.org
PRODUCED BY: The FilmUSA Committee – Eric Klein, Diane Ward, Wayne Hackett
Posted 2 November, 2008 in PA News
Editors Note: we are posting this article, and others like it, so that we can see viewpoints opposing production incentives, and know what issues are their concerns.
……
Supporters of the bond question say a vote in favor of the initiative is a vote for clean water. Thus, anyone opposing further indebting taxpayers clearly favors polluted waterways and dirty disease-ridden drinking water. This despite the fact, as the Commonwealth Foundation points out, that the General Assembly has already approved $3 billion in new borrowing this year – without asking our permission. So, what is the problem with an additional $400 million?
The Commonwealth of Pennsylvania is having problems paying for core government services. It would seem maintaining and improving our sewer and water systems would be a top budget priority, as would be maintenance of our highways, roads and bridges. All of said infrastructure has fallen into an advanced state of disrepair even though, until recent months, the state treasury has racked in records amounts of tax revenue.
This raises the question: What exactly is state government spending our money on that funding is not available to maintain and improve basic services?
The answer: Porno films. Or, at least raunchy films about making porno films.
While sewage pollutes our rivers and streams and our highways fill with potholes your state government has invested millions in the so-called “film industry,” including a $5.7 million tax credit for a film aptly titled “Zack and Miri Make a Porno.” As the title would suggest, in the film Zack and Miri do in fact “make a porno,” and fall in love with each other along the way. Not exactly the mating ritual of most Pennsylvanians, but apparently something worthy of subsidizing with our tax dollars.
An article posted on Movies On-Line describes the film: “What happens when two best friends up to their eyeballs in debt decide to have sex on camera for money? Lifelong friends and roommates Zach and Miri are facing hard times and a mountain of debt. When the electricity and plumbing get cut off, they seize upon the idea of making a homegrown porno movie for some quick cash, enlisting the help of their friends.”
Hey, what are friends for?
The review concludes: “‘Zack and Miri Make a Porno’ is a feast of dirty talk, raunchy scenes with real love and caring amongst the characters, cooked up by the originator of the genre – Kevin Smith. Here’s what he had to tell us about his new film (and) appealing an NC17 rating.”
Well, at least there is “real love amongst the characters.” And, as a further redeeming factor a group of unemployed actors in Pittsburgh did find paying jobs acting in the film. There is the little matter of the propriety of our tax dollars going to pay actors to have sex on camera, but this is apparently a far greater use of state funds than say sewer lines.
State funding for “Zack and Miri Make a Porno” is only the tip of the film subsidy iceberg. A “film tax credit” was also given to the mass-suicide film “The Happening.” Gov. Ed Rendell has also advocated such tax credits on behalf of Lionsgate, a company which gave us such classics as “House of 10,000 Corpses” and “Devil’s Rejects.”
Meanwhile, back at the state treasury, funds apparently are still lacking to fix those bridges. Oh, and if you want to watch Zack and Miri make a porno, you will have to pony up $7.50 at the theater as there are no “investor” discounts. Nor are you likely to be invited to this weekend’s red carpet debut.
So, when you go to the polls on Tuesday, and you are faced with placing an additional $400 million in debt on your children and grand-children, think of your tax dollars going to subsidize soft core porn and ask yourself if you haven’t already invested enough in sewers.
Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail address is lhenry@lincolninstitute.org.
Posted 2 November, 2008 in FilmUSA
FORWARDED: Congress Extends Federal Tax Incentive
The Section 181 tax incentive has been extended through December 2009. This program which was first enacted in 2004 was extended and enhanced by being attached to the $700 billion financial markets rescue plan passed by Congress.Â
The new legislation improves upon the prior law by applying the tax incentive to the first $15 million of all motion picture productions in the USA. The prior legislation was flawed because this threshold amount included all costs, including difficult to predict residuals and participations. This quirk in the law made it risky to accept the incentive if your budget plus these extras might exceed $15 million.Â
The new provisions are retroactive to January 2008. Â
