By Julie Carr Smyth, Statehouse Correspondent

COLUMBUS, Ohio (AP) --

Desperate to prop up their ailing economies, U.S. states are locked in a fierce competition to lure Hollywood filmmakers to their gritty cities and picturesque towns with tax breaks and other incentives.
    The movement remains intense despite state budgets facing near crisis, largely because the movie and TV industry has emerged as a tough survivor in hard economic times.
    The film industry’s economic health has pushed some states like Ohio to reconsider tax breaks for filmmakers and TV producers after years of viewing such financial perks as luxuries the state couldn’t afford.
    Ohio lawmakers are poised to approve film industry tax breaks soon, once they work out whether to offer to make the breaks big or bigger.
    Gov. Ted Strickland vetoed the bigger tax breaks favored by legislative Republicans in December, saying he wanted to weave the breaks into discussion of his two-year operating budget. Republican lawmakers were eager to continue the momentum from “Spider Man 3,” parts of which were filmed in Cleveland.
    Strickland said Thursday a $10 million incentive program, rather than $25 million, is all Ohio can afford.
    “I could not and I do not support the larger commitment on the part of the state,” he said.
    Ohio is one of only a handful of states left that don’t already offer a state-level tax break to filmmakers or a giant pot of cash that producers and directors can tap for incentives.
    Meanwhile, lawmakers in Indiana overrode a governor’s veto of film industry incentives there a year ago.
    In Maryland, state officials realized just how important such incentives were to a state’s economy in 2004, when they lost the film “Annapolis” — a story set in the Maryland city — to neighboring Pennsylvania.
    Karen Hood, a spokeswoman for the Maryland Department of Business and Economic Development, which houses the state film commission, said production crews were ready to roll when Pennsylvania officials drove into town touting their freshly minted film incentive program.
    “They literally parked their trucks outside and said, ‘Maryland can offer you two or three million? Well, we’ll offer you 10,” she said. “That was our ‘Omigod moment.'”
    The rush of states to offer movie incentives began about six years ago when U.S. film-making was going increasingly out of the country — to places like Canada, Bosnia, Romania or France that offered low costs and cash rebates or payouts.
    For many states, the investment paid off.
    An analysis by the nonprofit group Film Wisconsin released in December, for example, found that new breaks and incentives in that state had brought in more than $9.2 million and created at least 850 jobs. That state was home to production of the upcoming film “Public Enemies” starring Johnny Depp and Christian Bale.
    A study conducted for New Mexico, where films such as the Oscar-winning “No Country For Old Men,” ”The Book of Eli” and “In Plain Sight,” showed similar positive results. The review by Ernst & Young, released earlier this month, found that 30 films produced in 2007 in that state generated about $253 million in spending and directly created 5,989 jobs.
    New Mexico Gov. Bill Richardson boasted in his recent State of the State speech that the state had “created a new industry” over the past six years through its film industry incentive program.
    Despite such positives, some states are beginning to rethink their incentives amid the national economic meltdown.
    For example, Connecticut recently drew back support for its program, which had offered 30 percent tax credits for the production of digital media and motion pictures in the state, or more for productions exceeding $50,000, since 2006.
    The Maryland Film Industry Commission, a coalition of businesses and film producers that includes Maryland-born director Barry Levinson, is pushing a proposal for filmmakers to receive a “post-expenditure rebate” of about 28 percent of their qualified spending on in-state film production.
    Hood said that, while the administration recognizes the value of film production to the state’s economy, such aggressive incentives are tough to swallow during this time of fiscal distress.
    “It’s been a battle of incentives. Of course, Hollywood’s saying, ‘This is great,'” she said. “The debate going on right now is, if you’re facing a fiscal crisis in your state is it fiscally responsible to subsidize Hollywood?”
    According to the Motion Picture Association of America, copyright-based businesses such as movies, home video and television programming were among the nation’s fastest-growing industries in the country, contributing about 6 percent to total gross domestic production.
    The industry employs roughly 750,000 people, and grows at about 3 percent a year.
    Government incentives to moviemakers and TV producers appear to coincide with an increase in the industry’s political generosity.
    Data compiled by the nonpartisan Center for Responsive Politics shows that the entertainment sector gave $5.9 million to federal political campaigns and causes in 1990, $7.2 million in 1998, and $45 million last year. State-level giving between the 2002 and 2006 gubernatorial cycles more than doubled, according to figures compiled by the National Institute on Money in State Politics.
 
Associated Press Writer Stephen Majors contributed to this report.

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