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News & ArtsFriday, February 24, 2012
Film / Olympia Will a Tax Break to Encourage Filmmaking Die in the Legislature?
Posted by Eli Sanders on Fri, Feb 24, 2012 at 6:00 AM
It's deadline time in Olympia for bills that haven't yet made it out of committee; either they make it out fast, or they admit it's over for this year. Among the bills fighting for their lives: a bill that would re-instate a tax break to encourage filmmaking in Washington State.
From the Washington Filmworks blog:
We repeatedly heard that Representative Ross Hunter (D-48) is not willing to schedule a Ways & Means Committee hearing on the bill. This hearing must occur before the bill cut off date of Monday, February 27th at 5 p.m. or the bill could die.
If you are a constituent living or working in the 48th district and are Represented by Ways & Means Chair Ross Hunter we urge you to write or call his office, asking him to schedule a hearing before the bill cut off of 5 p.m., Monday February 27th. Representative Hunter’s email is ross.hunter@leg.wa.gov and his Olympia Office telephone number is (360) 786-7936.
This tax break, as I noted a week ago, would cost the state an estimated $7 million every two years in rebates to filmmakers, but would bring in around ten times that much in revenue generated by their filmmaking projects.
1
This is a rare example of as tax break that would actually generate a ton of money. And money wouldn't just come from the filmmaking projects, think about how many tourist dollars were a direct result of Sleepless in Seattle (as silly as that sounds).
2
Oh yes, have to keep OUR tax breaks. It's THEIR tax breaks that don't work and need to be eliminated.
3
This is a false equation. Filmmaking has more to do with having the infrastructure, ease of getting permits, lodging, etc. than tax credits. A tax break is an incentive, but Vancouver and Toronto pull much more filming, because they can be re created as New York and other major US cities with cheaper costs for production, ease of permits, etc.
If a film company wants to film in Washington State, as “Twilight” did, or to make Seattle as the backdrop, they will. If they really want to cut cost, they will film Washington State backdrops and then film in Vancouver, as countless productions have done, with or without the tax credit.
If a state is going to have to get revenue, they need to tighten all loopholes. I don’t see ten times the revenue to the state go to zero overnight if the tax rebate is closed. Welcome to scare tactics...
If a film company wants to film in Washington State, as “Twilight” did, or to make Seattle as the backdrop, they will. If they really want to cut cost, they will film Washington State backdrops and then film in Vancouver, as countless productions have done, with or without the tax credit.
If a state is going to have to get revenue, they need to tighten all loopholes. I don’t see ten times the revenue to the state go to zero overnight if the tax rebate is closed. Welcome to scare tactics...
4
Of course, we understand your hypocrisy, considering half your readership probably has useless 'film' degrees from sccc.
6
Ferret #3 is spot-on: the issue is not tax breaks on production costs, but the infrastructure costs of production. Make it easier to film in the state, and there will be no need for tax breaks.
7
I bet the petroleum industry can make auch more compelling case for tax breaks (maybe not in WA, but in general). How about agriculture? Howabout biotech?
Nope, sorry. You can't just say an industry brings in $X overall and so giving them a special tax subsidy will pay dividends of $X. What, the entire filming industry in WA is going to dry up without that tax break?
I don't have a problem with #3's proposal: change policies around permits, etc. to make it easier to film (if that's where your priorities lie, though I'm sure there are trade offs). But let's not keep doling out special tax subsidies for our pet industries, especially if you're going to complain when your non-pet industries want a piece of that action too.
On the contrary, howabout we stop the bleeding of education funding?
Nope, sorry. You can't just say an industry brings in $X overall and so giving them a special tax subsidy will pay dividends of $X. What, the entire filming industry in WA is going to dry up without that tax break?
I don't have a problem with #3's proposal: change policies around permits, etc. to make it easier to film (if that's where your priorities lie, though I'm sure there are trade offs). But let's not keep doling out special tax subsidies for our pet industries, especially if you're going to complain when your non-pet industries want a piece of that action too.
On the contrary, howabout we stop the bleeding of education funding?
8
Making films is exactly the kind of labor and creativity intensive activity that should be fostered by government "stimulus". I think it certainly would put money in many people's hands, who would tend to spend it back into the local economy.
9
@3 is wrong on a number of counts, the most glaring of which is the fact that the "Twilight" films were NOT shot in WA State (a point which represents the main thrust of his argument), but rather, they were shot in Oregon and British Columbia, in large part because of the economic incentives those two locations brought to the table.
It's true, we DO have the infrastructure, the crews (many of whom, ironically, are spending a large portion of their time working down in OR because there aren't enough qualified production staff in the area to cover the workload down there), and we certainly have the locations and the lodging; so, according to your reasoning @2, films & television production should be flocking to our state; but it's not, so one has to ask the obvious question: why is that the case?
Portland alone has THREE major series in production: "Grimm", "Leverage", and "Portlandia"; Seattle - zero. Why? Because our state has been extremely inconsistent in offering incentives, with B.C. has been aggressively offering up since the mid-'90's, and OR for the past four years. Producers of those shows will tell you that it's that STABILITY, the assurance that the money will be there on a consistent basis, that makes it possible for them to produce there, because they have to plan two, three, even seven years ahead in order to determine their ability to shoot in a certain area; and if they don't have some reasonable expectation that they can effectively manage their budgets (e.g. if they think their incentive monies may dry up next year, or two years down the road), they simply won't take the risk. And frankly, why should they, when other states are falling all over themselves to offer up incentives of their own to attract the business OUR legislators apparently don't think we need.
Film production incentives are important for exactly the reason @7 (unintentionally) asserts: we have a revenue crisis here, and we've cut about as much spending as we can on the expenditure side, to the point where it now has a dramatic negative impact on basic services - such as education. The 10:1 income-to-incentive ratio may be an approximation, but it's a pretty close one, born out by previous experience, both here and elsewhere. That money represents JOBS: performers, production staff, shooting crew, caterers, service industry employees, taxi drivers, lumberyard employees, restaurant staff, florists - I could go on-and-on. And the most significant part of all this is that most of these represent LOCAL jobs being supported by out-of-state money. So, money comes into the state, but, unlike, say, shopping at Wal-Mart or buying an iPad, almost all the money spent goes directly into the state's economy, not out of it.
More...
It's true, we DO have the infrastructure, the crews (many of whom, ironically, are spending a large portion of their time working down in OR because there aren't enough qualified production staff in the area to cover the workload down there), and we certainly have the locations and the lodging; so, according to your reasoning @2, films & television production should be flocking to our state; but it's not, so one has to ask the obvious question: why is that the case?
Portland alone has THREE major series in production: "Grimm", "Leverage", and "Portlandia"; Seattle - zero. Why? Because our state has been extremely inconsistent in offering incentives, with B.C. has been aggressively offering up since the mid-'90's, and OR for the past four years. Producers of those shows will tell you that it's that STABILITY, the assurance that the money will be there on a consistent basis, that makes it possible for them to produce there, because they have to plan two, three, even seven years ahead in order to determine their ability to shoot in a certain area; and if they don't have some reasonable expectation that they can effectively manage their budgets (e.g. if they think their incentive monies may dry up next year, or two years down the road), they simply won't take the risk. And frankly, why should they, when other states are falling all over themselves to offer up incentives of their own to attract the business OUR legislators apparently don't think we need.
Film production incentives are important for exactly the reason @7 (unintentionally) asserts: we have a revenue crisis here, and we've cut about as much spending as we can on the expenditure side, to the point where it now has a dramatic negative impact on basic services - such as education. The 10:1 income-to-incentive ratio may be an approximation, but it's a pretty close one, born out by previous experience, both here and elsewhere. That money represents JOBS: performers, production staff, shooting crew, caterers, service industry employees, taxi drivers, lumberyard employees, restaurant staff, florists - I could go on-and-on. And the most significant part of all this is that most of these represent LOCAL jobs being supported by out-of-state money. So, money comes into the state, but, unlike, say, shopping at Wal-Mart or buying an iPad, almost all the money spent goes directly into the state's economy, not out of it.
10
50/50 was entirely set in Seattle but entirely filmed in Vancouver. The most recent Mission Impossible had a brief scene set in Seattle that was entirely filmed in Vancouver. That Vancouver fills in for Seattle 90 percent of the time proves you wrong.
And since when is Vancouver a cheap place to do business?
If a film company wants to film in Washington State, as “Twilight” did, or to make Seattle as the backdrop, they will.
50/50 was entirely set in Seattle but entirely filmed in Vancouver. The most recent Mission Impossible had a brief scene set in Seattle that was entirely filmed in Vancouver. That Vancouver fills in for Seattle 90 percent of the time proves you wrong.
And since when is Vancouver a cheap place to do business?
11
@10, just as a point of information, the increase in value of the Canadian dollar against the U.S. dollar over the past few years (to the point where the two currencies are now essentially at-parity) has actually meant the corresponding value of their incentives & tax breaks have increased as well, making B.C. even MORE attractive to filmmakers than ever before.
12
@3 is correct.
To qualify for the other tax breaks, you need certain people on your project who are Canadian, and a certain percentage has to be filmed/produced/etc in Canada, but you can shoot the rest here.
Insides of buildings can be anywhere, quite frankly. And frequently are.
To qualify for the other tax breaks, you need certain people on your project who are Canadian, and a certain percentage has to be filmed/produced/etc in Canada, but you can shoot the rest here.
Insides of buildings can be anywhere, quite frankly. And frequently are.
13
Will @12:
Thing is, if you're already shooting MOST of your film/TV series IN Canada, it really doesn't make much sense to shuttle a major chunk of your production back across the border just to put a few interior shots in the can; that can be done just as easily, not to mention more quickly and cheaply, by staying in Canada for the entire shoot. Then, all you need to do is send a very small Second Unit (maybe a half-dozen people, at-most) crew down to Seattle to pick up the "beauty shots" from a helicopter or boat, plus maybe a handful of exterior establishing shots if you need to include a recognizable landmark, and - through the magic of the movies - you've got a film or series "set in Seattle", even if 99% of it is in reality shot somewhere else.
"Gray's Anatomy" has been doing this for EIGHT YEARS RUNNING - and, aside from a two-part episode shot-on-location several years ago (and the requisite stock-footage exterior shots, most of which have been recycled since Season One) - literally every second of footage in that show has been shot on a sound stage or on locations in-and-around Los Angeles. Same went for the supposedly set-in-Seattle "Frazier" (which couldn't even get the exteriors right: the perspective view from Frazier Crane's "lower Queen Anne" apartment was, as any Seattleite knows, physically impossible). Yet aside from those of us who actually LIVE in Seattle (or some of us at any rate), you'd be hard-pressed to find many viewers who could tell the difference - assuming they even care.
Thing is, if you're already shooting MOST of your film/TV series IN Canada, it really doesn't make much sense to shuttle a major chunk of your production back across the border just to put a few interior shots in the can; that can be done just as easily, not to mention more quickly and cheaply, by staying in Canada for the entire shoot. Then, all you need to do is send a very small Second Unit (maybe a half-dozen people, at-most) crew down to Seattle to pick up the "beauty shots" from a helicopter or boat, plus maybe a handful of exterior establishing shots if you need to include a recognizable landmark, and - through the magic of the movies - you've got a film or series "set in Seattle", even if 99% of it is in reality shot somewhere else.
"Gray's Anatomy" has been doing this for EIGHT YEARS RUNNING - and, aside from a two-part episode shot-on-location several years ago (and the requisite stock-footage exterior shots, most of which have been recycled since Season One) - literally every second of footage in that show has been shot on a sound stage or on locations in-and-around Los Angeles. Same went for the supposedly set-in-Seattle "Frazier" (which couldn't even get the exteriors right: the perspective view from Frazier Crane's "lower Queen Anne" apartment was, as any Seattleite knows, physically impossible). Yet aside from those of us who actually LIVE in Seattle (or some of us at any rate), you'd be hard-pressed to find many viewers who could tell the difference - assuming they even care.
14
Please clarify what you mean by "bring in ten times that much". From the link, it sounds like what is ten times $7M is the sum total spent on filmmaking in WA state; if so (a) most of that does not flow into the state budget and (b) not all of that would go away without the tax break. If you have evidence that this tax break is truly a net positive in terms of the state budget, please link to it. If not, you would be better off supporting the removal of tax breaks across the board instead of supporting a tax break for you favorite, oh-so-hip industry while decrying tax breaks for others.
15
@14:
Most of that $$ WILL NOT BE SPENT in WA if the incentive bill fails to pass. As I said previously, the 10:1 ratio may be approximate, but it's still a good estimate, again based on previous here and in other states. What is for certain though is that, without the incentive, producers will simply go elsewhere and some other state will get the benefit of that influx of dollars.
And the issue here is NOT how much money incentives return directly to state coffers, but rather how much money they put directly into the pockets of workers here - who use that income to purchase other goods and services from fellow citizens, which creates a ripple effect that helps out a whole bunch of other people down-the-line. At a time when our state faces a severe revenue short-fall due to our complete reliance on sales taxes to finance most state operations, anything that ADDS money into workers pockets, which they in turn spend on goods and services that generate sales tax income, particularly when that money is being pumped in from out-of-state, is a GOOD thing.
Most of that $$ WILL NOT BE SPENT in WA if the incentive bill fails to pass. As I said previously, the 10:1 ratio may be approximate, but it's still a good estimate, again based on previous here and in other states. What is for certain though is that, without the incentive, producers will simply go elsewhere and some other state will get the benefit of that influx of dollars.
And the issue here is NOT how much money incentives return directly to state coffers, but rather how much money they put directly into the pockets of workers here - who use that income to purchase other goods and services from fellow citizens, which creates a ripple effect that helps out a whole bunch of other people down-the-line. At a time when our state faces a severe revenue short-fall due to our complete reliance on sales taxes to finance most state operations, anything that ADDS money into workers pockets, which they in turn spend on goods and services that generate sales tax income, particularly when that money is being pumped in from out-of-state, is a GOOD thing.
16
Comte@15: If, when doing a cost/benefit analysis of a potential tax break, you count dollars gained by the private setor against dollars lost to the state, you will nearly always determine that nearly any tax should be eroded via breaks to nearly zero. The reason is that taxation imposes deadweight losses, meaning that the total dollar value gained by the government is less than the total dollar value that the tax subtracts from the private sector.
17
I think if there was a better way to make sure those incentives went to independent film makers who didn't have gigantic studios bankrolling them that would be fine. If you're going to let a megacorp like Disney take the money you're not promoting anything other than corporate welfare. If we're talking about trying to steal a little business from Vancoover BC we should try, but I throw caution that a simple tax cut is really going to make people want to film here who weren't already going to.
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