SANTA MONICA—What a difference a year makes. At the Association of Film Commissioners International (AFCI) Locations Trade Show in 2003, there was little talk of financial incentive programs to spur on filming in U.S. cities and states. In fact, staggering budget deficits in most municipalities and states throughout the country had many film commissions coping with less funding and in some cases the possibility of being shut down.
While state, county and city budget shortfalls remain a real concern, the notion of filming incentives nevertheless seems to now be picking up a bit of momentum—and that was reflected during the recently concluded three-day (April 16-18) Locations Trade Show 2004 at the Santa Monica Civic Auditorium.
AFCI president Pat Swinney Kaufman, deputy commissioner and executive director of the New York State Governor’s Office for Motion Picture and Television Development, noted that while a relative few states have major financial incentive programs in place, there are more than 20 U.S. states and cities hoping to push through new anti-runaway initiatives. These proposals range from being in the planning stage to having reached legislatures for consideration.
Generating the most buzz among commercialmakers attending the show was the wage tax credit that went into effect in Illinois on Jan. 1. In fact, at the Chicago Film Office booth, prevalent among the handouts was a fact sheet outlining tax credit eligibility and application requirements.
The Illinois incentive establishes a 25 percent tax credit, which applies to the first $25,000 in wages per worker per production. (Excluded from the tax credit are the two highest paid Illinois workers on a project.) Workers must be Illinois residents hired for a qualified feature, TV program, commercial or sponsored content piece lensed in the state. Projects for advertising purposes (30 minutes or less), including spots and branded entertainment, can receive the tax credit as long as each has a minimum of $50,000 in wages being paid to Illinois residents.
UTAH
SHOOT has reported on the Illinois tax credit in detail, including its applicability to the ad industry (3/12, p. 1). But also at Locations, other incentives came to the fore. For example, Utah’s legislature recently passed a sales and use tax exemption on motion picture equipment for production and postproduction. The exemption will go into effect on July 1 and applies to features, TV and commercials shot in Utah by resident and visiting producers.
Furthermore, the Utah legislature recently authorized putting 20 percent of the state’s longstanding Industrial Assistance Fund toward special economic development opportunities—a prime one being filming. The Utah Film Commission, under the aegis of director Leigh von der Esch, is currently developing a plan whereby money from the Industrial Assistance Fund will go toward rebates to be paid to producers who shoot commercials, feature and TV fare in Utah. Von der Esch told SHOOT that the initiative will be user friendly, with rebates based on receipts and applying to resident and visiting producers who lens in Utah. The rebate percentage and other key details are being worked out. Von der Esch hopes that the rebate program will take effect in June.
The prospects are also good for additional incentives to emerge in Utah next year. The state legislature has established the Utah Motion Picture, Television & Commercial Industries Financial Incentives Task Force consisting of three state senators, three state representatives, filmmaking industry members and community leaders on municipal and county levels. This body will report on runaway production and what measures should be taken to keep and attract more filming in Utah. The task force is particularly concerned that Utah has committed significant funding to educating students in the latest filmmaking and digital technology only to see these workers gain experience and leave the state. To protect that education investment, the Utah task force wants to encourage the filmmaking business and keep those workers in the state, thus building a strong industry infrastructure.
The task force is scheduled to issue its report and recommendations in November, possibly paving the way for an incentives package to be introduced in the legislature in time for the next fiscal year (July 1, ’05-June 30, ’06).
FLIP SIDE
Still, some states have such huge overall deficits that it figures to be some time before they are in a position to implement significant financial incentive programs. Just prior to day one of the Locations Trade Show, Gov. Arnold Schwarzenegger (R-Calif.) held a press conference in Sacramento to announce five appointments to the California Film Commission (CFC) and to affirm his commitment to the pursuit of tax incentives on both the federal and state levels to attract filming.
At the same time, Schwarzenegger acknowledged that it’s unlikely tax relief would come immediately, given California’s financial problems. "It doesn’t have to be this year," he said. "We can’t make it happen from one minute to the next. That won’t happen. But I think as soon as we can identify what the problems are, we can go to the legislators and we can lobby and work on it and have them change their minds to create a more positive business atmosphere in California."
Last year, the CFC budget was downsized to about $1.2 million, and the Film California First anti-runaway program—which was well received by commercialmakers—lost its funding (SHOOT, 8/15/03, p. 1).
Schwarzenegger’s earlier alluded to appointments to the CFC are actor/director Clint Eastwood, actor/producer Danny DeVito, actor/director/producer Bill Duke, producer Tom Werner and producer/director Lili Fini Zanuck.
The Locations Trade Show attracted some 3,300 attendees which is slightly more than the turnout in ’03. This marked the 19th year for the annual event.
For the ’04 show, some 250 exhibitors from more than 30 countries showcased their wares. Of that field, nearly 180 were AFCI-member film commissions.
The general consensus was that an increased number of commercial production attendees came out for Locations in ’04 as compared to years past. The AFCI made a concerted effort to drum up attendance from ad industry folk, particularly since, said Kaufman, commercialmaking is the bread and butter business for the lion’s share of film commissions.
Kaufman was pleased with the quality of the turnout, noting that the show drew location decision-makers, ranging from scouts to directors, producers, location managers, cinematographers, writers and ad agency creatives.
