The Louisiana FIlm Entertainment Association is hoping to widen the scope of what counts for a return on investment of the state’s film tax credit incentive program, announcing Sept. 16, 2014, a plan to commission a study of the program’s economic impact. (NOLA.com | The Times-Picayune archives)
The Louisiana Film Entertainment Association is hoping to widen the scope of what counts for a return on investment of the state’s film tax credit incentive program, announcing today a plan to commission a study of the program’s economic impact.
The study will cost about $150,000 in total, according to LFEA president and Film Production Capital co-founder Will French. To help with the expense, the association will launch a Kickstarter campaign Sept. 29 aimed at raising $50,000 of the total bill.
“We really want this to be a good, honest study, not one skewed in our favor because we’re commissioning it,” French said. “To do that, it’s expensive to make sure it’s done by a good research group and for the methodology to be credible.”
Economic development consulting firm HR&A Advisors, Inc. has already been tapped to do the study. The firm previously did similar reports for the Motion Picture Association of America regarding the film tax incentive programs in both Massachusetts and New York.
HR&A’s report indicated that every $1 of tax credits awarded in Massachusetts, $10 in spending was generated. As for New York, HR&A found that for every $1 of credit distributed, the city and state received a combined $2.23, according to the Los Angeles Times’ report at the time.
In Louisiana, however, the numbers have so far not been quite as rosy. As mandated by the state, Louisiana Economic Development has commissioned an analysis of the film tax credits every two years since their inception in 2002.
In the most recent report, Loren C. Scott & Associates found that Louisiana’s film tax credit incentives had a net loss of $168.2 million in the state’s treasury in 2012. Put another way, given the adjusted certified tax credits doled out that year, it cost the state about $4.35 for each $1 worth of credits collected.
An earlier report, which was published in 2010, indicated the state paid $7.29 for every $1 of tax credits it collected.
“I’m positive the program costs more to the (state) than it generates, but I’m positive that’s true of all programs. It’s not just film,” said Legislative Fiscal Office chief economist Greg Albrecht in a general discussion about the film tax credits earlier this week.
Industry-generated reports, Albrecht said, tend to overestimate their own impact.
“Every time I’ve ever looked at one, they’ve counted spending that’s a stretch to call it caused by the program,” he said.
French said he’s not sure what HR&A will find in Louisiana, but noted that things have changed since the early days of the state’s film tax incentive program, which began in its current form in 2002.
“Everything had to be sourced from outside Louisiana, so a lot of the economic benefits bled out,” he said. “Every year, we get better at keeping that benefit in the state.”
Billy Bob Thornton prepares to shoot a scene on the set of the crime comedy ‘The Baytown Outlaws,’ which shot in Slidell in summer 2011. (File photo)
Billy Bob Thornton may soon be headed back to New Orleans. The Oscar-winning actor, who shot the crime comedy “The Baytown Outlaws” in the Slidell area in summer 2011, is in talks to join George Clooney and Sandra Bullock in the New Orleans cast of “Our Brand is Crisis,” according to The Wrap.
David Gordon Green is directing the film, a political comedy that is scheduled to start shooting Sept. 29 and continue through early November. It’s unclear what role Thornton (“Slingblade,” “Fargo”) would play.
The Warner Bros.-backed “Our Brand Is Crisis” is based on the 2005 documentary of the same name and focuses on the exporting of American political strategies — specifically, those of former Clinton consultants James Carville and Stan Greenberg — to South America. The film is being produced by Clooney and producing partner Grant Heslov, the same duo behind 2012′s Oscar-winning “Argo.”
Green is directing from a script by “Men Who Stare at Goats” screenwriter Peter Straughan.
“Our Brand is Crisis” is just one of a number of feature films preparing to shoot in what is shaping up to be a busy fall for the Louisiana film industry. Among others: The Dalton Trumbo biopic “Trumbo,” starring Bryan Cranston and Helen Mirren and which started shooting this week in New Orleans; the Warner-backed thriller “Geostorm,” starring Gerard Butler and which will shoot in New Orleans in October; and the Hank Williams biopic “I Saw the Light,” starring Tom Hiddleston and which will shoot in Shreveport.
Louisiana’s fast-growing reputation as the new Hollywood looks set to continue as two major new features prepare to shoot in the southern US state.
Gerard Butler, recently in Australia to film his starring role in Gods of Egypt, is due in New Orleans in the autumn to film Geostorm, a blockbuster from Warner Bros. Dean Devlin directs the disaster-driven thriller about a satellite designer (Butler) who has to save the world from catastrophe.
And action pic stalwart Sylvester Stallone is once again donning the vest and headband as he reprises his role of the troubled Vietnam vet in Rambo: Final Blood, due to shoot in Shreveport for eight weeks from late October. Stallone also directs from his own screenplay.
The residents of Shreveport are certainly in for a season of celeb-spotting: as reported recently on KFTV, Tom Hiddleston is also heading to the city to play the country legend Hank Williams in the Hank Williams biopic I Saw the Light.
A report published earlier this year by Film L.A. stated that, in 2013, Louisiana overtook California as the film production capital of the world, a finding that would appear to be backed up with recent major titles such as Jurassic Park 4; Zipper, Fantastic Four and the Twilight saga all choosing to shoot in the Bayou State.
Shooting the filmThe Dark Tales of El Diablo employed dozens of local industry veterans. However, months after filming wrapped, the cast and crew say they that nearly $200,000 in wages have not been paid. The unhappy parties worked on an independent segment of the film called The Devil’s Brake, which they shot for nine days this June outside of Slidell, Louisiana. At completion, they were assured of prompt payment by Writer/Director/Producer Spencer F. Lee, but most of the crew say that they have not received checks and some of those that did receive checks have been unable to cash them due to insufficient funds.
The movie’s Sound Mixer Michael Russo points out that because the shoot lasted just nine days, everyone expected all their earnings to come in a single paycheck. Many came into the project through a relationship with Executive Producer David Bullard, an established professional, who several crew members state was returning to film making after being injured on the set of Oblivion. Assistant Director John Michael Sudol says, “We gave these guys our trust, especially Mr. Bullard, who we knew and we were all excited to help him out.” As Russo puts it, “That’s why I got involved because it was a bunch of my friends.”
Sudol states the unpaid crew and actors contend that Lee and the movie’s production company, Z Bayou, LLC, “continued to engage the services of an entire film crew, a Screen Actors’ Guild cast, and vendors and goods and services and write checks and things like that knowing there was no money and kept us going.” Sudol had been paid during his time working on the film’s pre-production, but is still owed $3650 that accrued during the June filming. John Richoux reports that his department did have paychecks clear during pre-production. However, Richoux did not deposit his own paycheck immediately. When he did after he finished working on the film, it was returned NSF/Stop Payment. Richoux said that Director Spencer Lee had contacted him and wanted to negotiate for his NSF-marked check.
Make-up Artist Lesley Rodriguez echoes the experiences others have had with Lee saying “he has contacted me three or four times, I think three, since the non-payment situation has happened. Mostly it’s pretty much the same thing, it’s just he can’t actually give us a date of when we’ll get paid, but any day we’re gong to get paid blah, blah, blah.” Rodriguez signed onto The Devil’s Brake for $300 per day, and thought she would either be paid the last day or have a check arrive within two weeks. As the head of the Make-up Department, she estimated that she and make-up artists she supervised are owed $5800. Charles Lucia, who headed the film’s Special Effects, estimated that 90 percent of the crew thought they would be paid on the last day, but “the production team kind of disappeared leaving everyone questioning exactly what was suppose to happen. You kind of take it on faith.”
Lucia and Richoux point out the level of trust cast and crew put into productions, especially ones not covered by the powerful film unions. Lucia say, “For the most part, anyone who’s trying to make a film and anyone who’s trying to get something done is going to do it on the up and up.” Movie casts and crew generally work irregularly as independent contractors with larger checks allowing them to manage periods with no work. As John Richoux says, “Not getting paid for a month of my labor when I only want to work nine months of the year is a huge blow. I mean ultimately I have seven months of my mortgage out on this project.”
Stories of productions failing to make payroll circulate in the industry. However, in actuality, the instances remain surprisingly rare even on productions with relatively small budgets. Sudol says the failure to provide paychecks with no effective remedy “is very unhealthy” for the Louisiana film industry. John Richoux says “If we allow this to happen, if we don’t stand up and have a voice for ourselves, it will continue to happen.”
The crew approached the Office of the Louisiana Attorney General, but Assistant Attorney General Bill Bryan said that his office would not act directly in the matter. Russo says that attorneys he’s consulted warn that if potential defendants lack funds, they may not recover anything through civil litigation. Movie crews do have an active union in Louisiana, the International Alliance of Theatrical Stage Employees. Mike McHugh from Local 478 said that since The Devil’s Brake production did not have a contract with the union, IATSE could offer no assistance.
Some of the unpaid actors involved in The Devil’s Brake may act through The Screen Actors Guild.
When called, SAG’s New York office did not respond for information on possible action it may be planning.
David Bullard did not return a phone call requesting an interview. When contacted, Director Stephen F. Lee said he was in a meeting and agreed to interview after 6pm, but did not respond to subsequent calls.
Planning to attend the North Louisiana Gay & Lesbian Film Festival this weekend? Here’s the screening lineup.
‘Appropriate Behavior.’ Comedy Noir, 90 min. 5:15 p.m. Sunday, 5 p.m. Tuesday. Shirin is striving to become an ideal Persian daughter, politically correct bisexual and hip, young Brooklynite but is failing miserably in her attempt at all three in this sexy dark comedy.
‘Camp Beaverton: Meet the Beavers.’ Documentary, 62 min. 10:15 p.m. Friday. This film documents life at Camp Beaverton, the only all-women’s, transinclusive, sex-positive camp at Burning Man, an annual arts gathering billed as the world’s largest adult playground.
‘Campaign of Hate: Russia and Gay Propaganda.’ Documentary, 78 min.1 p.m. Saturday, 7:15 p.m. Sunday.Filmmaker Michael Lucas documents the anti-gay sentiment and legislation spreading rapidly throughout Russia, including the ban on so-called “gay propaganda” that effectively makes nearly any public discussion of gay equality a crime.
‘Matt Shepard is a Friend of Mine.’ Documentary, 89 min.7:45 p.m. Friday (Q&A with Judy Shepard), 5:15 p.m. Saturday. Directed by Michele Josue, a close friend of Shepard’s, the film revisits the shocking case of the hate-crime murder of Matthew Shepard with never-before-seen photos, rare video footage, and new revelations about Shepard’s all-too-brief life.
‘Open Up to Me.’Drama, 95 min. 3:15 p.m. Friday, 7 p.m. Tuesday (Q&A to follow). Maarit, who has just completed sex reassignment surgery, finds her own sense of belonging while attempting to rebuild her relationship with her teenage daughter and navigate falling in love with a married soccer coach.
‘The 10 Year Plan.’ Romantic comedy, 90 min. 7:15 p.m. Saturday, 5:15 p.m. Monday, 5:15 p.m. Sept. 11. Best friends Myles and Brody make a pact to be together in 10 years if neither finds love by then. Fast forward to just two months shy of their deadline and both friends set off to do whatever it takes to avoid ending up as each other’s last resort.
‘The Circle.’Docudrama, 102 min.1 p.m. Friday, 3 p.m. Sunday. Based on true events, this docudrama tells the story of Ernst and Robi, who met through The Circle. The gay publication from Zurich in the 1940s and 1950s was scapegoated for the murders of several gay men in the city.
‘The Dog.’ Documentary, 100 min. 3 p.m. Saturday, 7:15 p.m. Monday, 3 p.m. Sept. 11. This documentary provides an intimate portrait of John Wojtowicz, the larger-than-life inspiration behind Al Pacino’s character in “Dog Day Afternoon.” His attempted bank robbery to finance his male lover’s sex reassignment surgery wasn’t just an iconic moment in 1970s cinema. The crime and unforgettable movie had a profound impact on Wojtowicz’s post-prison life.
‘The Foxy Merkins’ Comedy, 90 min. 9:30 p.m. Saturday, 1 p.m. Sunday, 7:15 p.m. Sept. 11. Two lesbian hookers wind their way through a world of bargain-hunting housewives and double-dealing conservative women in this hilarious buddy comedy.
‘To Be Takei’ Documentary, 93 min. 5:15 p.m. Friday, 5:15 p.m. Wednesday. Over seven decades, actor and activist George Takei boldly journeyed from a World War II internment camp to the helm of the Starship Enterprise to the daily news feeds of 5 million Facebook fans. Join George and his husband, Brad, on this star’s playful and profound trek for life, liberty and love.
Sylverster Stallone unleashes some lead in 2008′s ‘Rambo,’ the fourth film in the action franchise. (Lionsgate)
Sylvester Stallone’s on-again, off-again “Rambo 5″ appears to be on again and will shoot in Louisiana this fall, as the Year of the Sequel continues in Hollywood South. Other notable sequels to shoot in-state so far in 2014 include “Jurassic World” and “Terminator Genisys,” both of which shot in New Orleans, and the superhero reboot “The Fantastic Four,” which shot in Baton Rouge.
Stallone has been trying to get a fifth entry in his action franchise off the ground for a few years. Last month, it became apparent that the project was moving forward, as the actor told Vulture that he was already training for the role. “I’m starting to work out. I’m going to be appropriately vicious and all that stuff, but intellectual. A killer with a heart.” Stallone said of the film that he has described as in the vein of “No Country for Old Men.”
Now, it looks like we have a start date. “Rambo 5″ — which also has gone by by the Roman numeraled “Rambo V” — will shoot for eight weeks in Shreveport starting Oct. 27, according to the state’s most recent listing of film and TV projects shooting or preparing to shoot in Louisiana.
No official synopsis has been released, but the IMDB page for “Rambo 5″ says it will see Stallone’s wounded warrior character, John Rambo — last seen on the big-screen in 2008′s simply (but somewhat confusingly) titled “Rambo” — go up against a Mexican drug cartel “in what’s reported to be his last adventure.”
The project will mark a return to Louisiana for Stallone, who shot parts of “The Expendables” and “The Expendables 2″ in New Orleans, as well as the sports comedy “Grudge Match” and the thriller “Bullet to the Head.”
“Rambo 5″ is one of a number of films shooting or preparing to shoot in Louisiana. Others include the Dalton Trumbo biopic “Trumbo,” starring Bryan Cranston, Helen Mirren and John Goodman, which is already underway; the political comedy “Our Brand is Crisis,” starring George Clooney and Sandra Bullock, and which starts shooting late this month; and the Warner Bros.-backed thriller “Geostorm,” starring Gerard Butler and which gets underway in October. All three of those projects are scheduled to shoot in and around New Orleans.
Below, find a full listing of projects shooting in-state as well as contact information for prospective crew members, courtesy of the state-run Louisiana Entertainment.
“Geostorm”: Warner Bros feature film Geostorm starring Gerard Butler began pre-production July 7 and is slated to begin filming in October in New Orleans. Send resumes to email@example.com
“I Saw the Light”: Independent feature I Saw the Light starring Tom Hiddleston will film October through December in Shreveport. Direct resumes to firstname.lastname@example.org
“Our Brand Is Crisis”: Warner Bros. feature filmOur Brand Is Crisis starring Sandra Bullock and George Clooney is filming Sept. 29 in New Orleans. Send resumes to email@example.com
“Trumbo”: Groundswell feature film Trumbo starring Helen Mirren, Bryan Cranston, Diane Lane, and John Goodman will film Sept. 15 through November 6th in New Orleans. Send resumes to firstname.lastname@example.org
“American Horror Story: Freak Show”: Fox television series American Horror Story ‘Freak Show’ is filming July 14 to December in New Orleans. Send resumes to email@example.com.
“NCIS: New Orleans“: CBS Studios television series NCIS: New Orleans starring Lucas Black, Scott Bakula, and Paige Turco is filming July 21 in New Orleans. Send resumes to firstname.lastname@example.org
The crew for the HBO series “Treme” shoots a scene for the pilot in the Howard Avenyue newsroom of The Times-Picayune. California is set to triple its budget for motion picture tax credits in 2015, but industry professionals don’t believe it will affect Louisiana as much as California lawmakers would hope
With the rising number of movie and TV productions hitting the road and leaving for greener pastures in a kind of reverse gold rush, the California legislature approved measures last week to triple its motion picture tax incentive program next year.
Meanwhile, in Louisiana, that approval raises the question of how this could affect film production here.
What is California’s film tax incentive program, and how will it change?
California’s film and TV tax credit program incentive program will rise from $100 million to $330 million per year for five years, a move aimed at reversing the export of the state’s movie industry to other states with more generous programs, like Louisiana. Specifically, a study published in February by the Milken Institute indicates California lost more than 16,000 film jobs between 2004 and 2012.
The changes also lower the threshold at which a production can qualify for the incentives and slowly begin to phase out the widely disliked lottery system by which California randomly awards its credits to in-state productions. Instead, California will begin awarding the credits on the basis of how many jobs a project supports, but their value — 20 percent to 25 percent of qualified expenses — will not change, according to The Los Angeles Times.
California’s credits have also been unavailable to projects with budgets over $75 million, but the new program would remove that qualifier.
The new tax incentives are scheduled to take effect in July 2015, and The Los Angeles Times reports that the deal was reached in a last-minute compromise during California’s legislative session, which ended last week.
The bill next moves to California Gov. Jerry Brown’s desk and he has already signaled his intent to approve it.
Louisiana currently offers a 30 percent transferable tax credit to all productions meeting a $300,000 in-state budget threshold, plus an additional 5 percent on resident labor costs.
How does Louisiana stack up to California’s revamped program?
When you do the math, Louisiana’s incentives are still preferential to California’s from a producer’s standpoint, but there are also some difficult-to-quantify factors that go into the decision of where to film.
California still boasts the most welcoming film infrastructure thanks to decades of Hollywood-based filmmakers. That means it has large studios and a built-in labor base, but Louisiana has slowly been building up its own infrastructure in recent years.
“Louisiana undeniably beats California on cost of living and labor rates,” said Patrick Mulhearn, the executive director of Celtic Studios in Baton Rouge, in an email. “And if recent studies are to be believed, people are happier living in Baton Rouge than they are in Los Angeles. Because Louisiana has maintained the same stable program since 2009 and has made great strides at building up a critical mass of seasoned crew, infrastructure and equipment, Hollywood South should not miss a beat.”
In a prepared statement, Chris Stelly, the executive director of the Louisiana Entertainment department under Louisiana Economic Development, which administers the film tax credits, indicated a strong belief that the state’s film industry will “continue to remain strong.”
“That California is poised to increase the value of its film incentives says much about how effective Louisiana has been in cultivating film and TV productions within our state,” Stelly said. “Although tax credits represent a significant attraction to film features and TV series produced in Louisiana, we also have built a recognizable, trusted, valuable brand as a beneficial location for these productions.”
Stelly also noted that Louisiana operating costs “can be far more favorable in maximizing any production’s bottom line.”
Will California’s higher tax credit budget keep more of the film industry there?
The California bill had widespread support from lawmakers, but some industry professionals are not sure the measures will staunch the flow of productions from California-based production companies to other states and counties.
“It certainly should have a fairly substantial impact, especially since it is being offered to a broader array of productions,” said Paul Audley, president of FilmLA, which tracks productions filming in Los Angeles, in an interview with Variety. “It is very good news, but the question exists, with states like Louisiana and Georgia and New York, is this enough to turn the tide and bring all the production back? I think that the answer is no.”
Mulhearn said the renewed California program will “help stop the bleeding, but the genie is already out of the bottle.”
Last year, California was the fourth most popular place in which to shoot a movie, falling behind Louisiana, Canada and the United Kingdom, according to a FilmLA survey as quoted in Forbes.
What are other states doing?
The big players — like New York and Georgia — are still deeply in the game, but a couple of smaller states, like North Carolina, have pulled back the reigns on their credits.
North Carolina, which has been the backdrop for movies like “The Hunger Games” and “Talladega Nights: The Ballad of Ricky Bobby” and TV shows like “Homeland,” severely cut back its own credit program during its last legislative session.
The Wall Street Journal reports that North Carolina will add a $10 million statewide cap to its 25 percent refundable tax credit. To put that in perspective, the state awarded $61 million in credits in 2013 alone.
Tired of seeing Hollywood take its business elsewhere, California is moving to triple tax subsidies for film and TV productions, boosting incentives to $330 million annually and making the state competitive with New York, Georgia and other states that are courting the entertainment industry with ever-richer incentives.
The action is widely seen as necessary to stop thousands of jobs from leaving Southern California, where most studios and production companies are based and would prefer to work if costs are roughly equivalent.
Yet it comes amid growing national debate about the value of film tax breaks and whether they create new jobs, or merely shift work from one place to another. Some fear California’s move may, in fact, escalate a bidding war among states eager to claim a share of the world’s most glamorous industry.
While these tax credits have been highly effective at luring production out of California, their long-term economic benefits have been questioned by several independent studies.
Louisiana has been one of the biggest beneficiaries of so-called runaway production, earning the moniker Hollywood South. But a report for the state’s office of economic development said its film incentives ended up costing taxpayers there nearly $170 million in 2012 — even after the economic benefits were counted.
The Massachusetts Department of Revenue estimated that for every dollar of film tax credits awarded, the state got back only 13 cents in revenue from 2006 to 2011. The net cost to the state was $128,575 for every filmjob created for a Massachusetts resident.
Michigan, New Mexico and most recently North Carolina have scaled back their incentive programs in one way or another over concerns the cost to taxpayers outweighed the economic benefits.
North Carolina lawmakers recently decided to drastically reduce film incentives on the heels of a state report that found $30 million in tax incentives led to the creation of just 55 to 70 new jobs in 2011.
“Our economists tell us it’s the worst return on investment of any of the tax-credit programs,” said Rep. Paul “Skip” Stam, the Republican speaker pro tem of the North Carolina House of Representatives.
Others point out that the generous subsidies given to Hollywood productions have to be paid for by either cuts in government services or higher taxes on other groups and individuals.
“They don’t pay for themselves,” said economist Bob Tannenwald, who authored a national study on film tax credits for the Center on Budget and Policy Priorities, a group that researches policies affecting low- and moderate-income people. “They have to be financed somehow, so spending has to be cut or taxes have to be raised elsewhere.”
Even the California legislative analyst’s office voiced unease over the program. Itpointed out that California’s incentives returned 65 cents in tax revenue to the state for each $1 in film tax credits, disputing findings from the Los Angeles County Economic Development Corp. that the program generated a positive return on investment.
And while expanding incentives may be necessary to protect a “flagship California industry,” the legislative analyst’s office noted, doing so may encourage other states to ratchet up their own credits.
“It is unclear how these sorts of competitions end,” the legislative analyst’s office said in a report this spring. “In responding to other states increasing subsidy rates, California may only stoke this race to the bottom.”
What is clear is that filming is highly mobile, and studios and producers increasingly rely on this so-called soft money to lower their production costs. They routinely expect taxpayers to offset as much as 30% of their qualified production costs. States now pay out about $1.5 billion in film incentives each year, up from a few million dollars a decade ago.
“All you’re doing is moving jobs from California to other states,” said Joe Henchman, vice president for state projects for the Tax Foundation, a Washington organization and frequent critic of tax credits. “We’ve just throwna lot of public dollars to make that happen. There is no net national gain.”
The Motion Picture Assn. of America, the trade group representing studios, disputes the claims by Henchman and other critics. The group says tax credits have helped build stand-alone filming centers in places such as Georgia, where Britain’s famous Pinewood Studios is building a 288-acre studio with six soundstages.
What’s more, the MPAA says the battle for film production should be viewed on a global scale. Countries including Britain, Canada and Australia — where the California earthquake movie “San Andreas” was recently filmed — have increasingly dangled lucrative incentives before Hollywood. State tax incentives help keep that business here, saidVans Stevenson, senior vice president of state government affairs for the MPAA.
“This is not something that we dreamed up years ago,” Stevenson said. “It’s something that evolved on its own because the states, lawmakers and economic policy people saw this as an opportunity to create jobs and investment, and that’s been borne out. If these programs weren’t working they would be going away.”
Stevenson and other industry supporters also note that spending on movies or TV shows ripples beyond film sets. Crews spend money on caterers, cast trailers, hotels, prop houses and lumber yards.
And when a big Hollywood production comes to town, politicians can visit sets and trumpet the boon to their local economies. There can also be marketing and tourism benefits to states, which are typically mentioned in the end credits. The baseball field in Dubuque County, Iowa, depicted in “Field of Dreams” remains a popular tourism attraction, and fans still flock to Albuquerque to see the sites frequented by character Walter White in the hit AMC series “Breaking Bad.”
Louisiana and New Mexico were the first to launch film incentive programs in 2002, hoping to siphon off the film work fleeing to Canada, where tax breaks and favorable exchange rates made it a go-to location. Today, nearly 40 states offer some form of rebate, credit or grant to the film industry.
The plethora of choices has allowed studios and filmmakers to pit one state against another for the best deal.
When producers of the Netflix Inc. series “House of Cards” threatened to leave Maryland if the state reduced tax credits, Gov. Martin O’Malley in April approved an $11.5-million package to keep the show in the state.
“They say, ‘You need to match this, or you don’t have a prayer of getting production in your state,’” saidHenchmanof the Tax Foundation.
Film tax credits aren’t tax credits in the conventional sense. Many states will refund the value of the credits to the company even if they don’t have a tax liability in their state. Other states such as Georgia allow producers to sell their credits to corporations such as Apple Inc. and Bank of America Corp., which use them to lower their own tax bills.
Evaluating these programs is tricky. Although states frequently trumpet their economic effect, most don’t reveal the net cost to create the jobs, or they cite research compiled by the MPAA, which has actively lobbied to expand film tax credits nationwide.
That said, there is no doubt that the expansion of incentives has led to a significant transfer of production jobs away from California.
California lost 18,580 jobs in the film and TV sector from 2004 to 2013, a 12% decline, according to federal jobs data compiled by the Milken Institute.
During the same period, arch rival New York added nearly 10,000 jobs, an increase of 23%. New York has seen a surge in production since it increased its film credit in 2008. The state allocates $420 million annually to film productions.
Louisiana, another top film destination, added 2,760 jobs, up 73%. Other film hubs such as New Mexico, North Carolina and Georgia also have seen some job growth, although the gains have been more modest relative to the size of the subsidies.
“Looking at the absolute numbers, it’s clear that California is in slow decline,” said Kevin Klowden, managing economist at the Milken Institute. “This is in stark contrast to the tremendous job growth in other states over the past decade.”
And while some states are scaling back their tax credit programs, others are showing no signs of retreat.
Louisiana awarded $251 million in film tax credits last year. That’s a steep cost for a state with an annual budget of about $25 billion, compared with California’s budget of $156 billion.
A study for the Louisiana Department of Economic Development concluded the state lost more than $12,000 for every job created by the film tax credit. The Louisiana Budget Project, which monitors public policy, said taxpayers paid an average of more than $60,000 per direct filmjob.
“Unfortunately, the returns to the state on this investment, like many of the movies made here, have been a flop,” the group said.
Yet support for its incentive program remains strong.
Chris Stelly, executive director for Louisiana Entertainment, said the benefits of film production tax credits can’t be viewed from just short-term job gains. Rather, he said, the state is helping create a new industry that will provide jobs and spur economic activity for decades to come.
“The industry now supports many thousands of jobs in Louisiana, and we’ve built up a deep crew base,” he said.
Among last year’s movie releases, there were more major studio films shot in Louisiana than in California, according to FilmLA. Inc. Louisiana had 18 studio films; California and Canada were tied for second place with 15 films each.
Confronted with such competition, many in the industry agree that California had no choice but to bolster its program. A bill to expand funding and qualify more projects was approved by the Legislature on Friday and is expected to be signed by Gov. Jerry Brown next month.
Studio executives and producers say the legislation, which will be in effect for five years starting in July 2015, will make L.A. a much more attractive film location. Despite competition from other states, Southern California is still the place most people in the industry — including A-list actors as well as directors and producers — call home.
“I haven’t shot a movie on our lot in years,” said Fred Baron, executive vice president of feature production at 20th Century Fox. California’s new tax credit will be “great for the community,” he added. “It will just bring back movies.”
Veteran producer Gale Anne Hurd lives in L.A. but spends much of her time in Georgia, where she is executive producer on the hit AMC series “The Walking Dead.” With the expanded credit, Hurd said she would consider filming an upcoming movie and TV series in L.A.
“We can take our rightful place as the home of filmed entertainment as long as we’re competitive,” Hurd said. “We still have the best and most highly trained crews.”
As George Clooney and Sandra Bullock prepare this fall to shoot the political comedy “Our Brand Is Crisis,” in New Orleans, producers are looking for locals interested in appearing as extras in the film.
A casting call is scheduled for 10 a.m. to 5 p.m. on Wednesday at the Slidell Municipal Auditorium.
NOLA.com/The Times-Picayune reports background actors are being sought to portray Bolivian men and women of all ages. Specifically, the production is looking for those who have a Hispanic and Native American look.
The Warner Bros.-backed “Our Brand Is Crisis” is based on the 2005 documentary of the same name and focuses on the exporting of American political strategies to South America. It’s being produced by Clooney and producing partner Grant Heslov, who also produced 2012′s Oscar-winning “Argo.”
The script is being penned by “Men Who Stare at Goats” screenwriter Peter Straughan. Shooting is expected to begin Sept. 29 and continue through October and early November.
Those interested should bring documents necessary for filling out an IRS I-9 form. All applicants will be photographed on-site, “so please dress as you would like to be seen by the director and producers of the movie,” according to a recent casting advisory.
Registration is expected to last from an hour and a half to two hours.
North Carolina has its first official casualty of the soon-to-expire film tax incentive.
Cinemax’s “Banshee,” which shot its first three seasons in and around the Charlotte area, will move production to Louisiana for season four.
Created by “True Blood’s” Alan Ball, the series follows the dealings of a small town in Pennsylvania Amish country taken over by an ex-con man after its sheriff is murdered.
“Banshee” is listed on the Louisiana Film Office website as starting production in New Orleans in 2015.
Its departure comes soon after North Carolina legislators opted to let the state’s 25 percent refundable tax credit program expire at year’s end, in favor of instating a $10 million grant program for the first six months of 2015.
The film community wants Gov. Pat McCrory to call legislators back for a special session to address the incentive issue.
In 2013, “Banshee” spent more than $67 million on its second season in the state, the highest of any production, according to state audit records. Through the incentive program, it earned $16 million back in tax credits.
Production rarely traveled this far east, but the series did film for several days in June 2012 in Wilmington and Wrightsville Beach.
The show’s third season, which filmed in North Carolina earlier this year, is set to premiere in January 2015.