News Column

Film industry advocates warn N.C. against cutting tax subsidies

July 30, 2014

By Jim Morrill, The Charlotte Observer

July 30--RALEIGH -- Film industry advocates warned Wednesday the proposed state budget could cripple, if not kill, an industry that has exploded in Charlotte and around the state.

House and Senate leaders have proposed replacing the current system of tax credits, which last year amounted to $61 million, with a $10 million grant.

"The budget provision is not a compromise. It's the end of the program," Wilmington Democratic Rep. Susi Hamilton told the House Finance Committee.

Her comments came on a day when lawmakers gave at least tacit approval to economic incentives as well as tax credits for solar power and historic preservation.

Film production companies currently can get a 25 percent credit up to $20 million on qualifying expenses. Last year the state gave out $61.2 million in credits, according to the Commerce department. In the 2013 tax year, the television series "Revolution" claimed about $14.3 million. In 2012, the TV series "Homeland" claimed about $9 million.

Industry advocates say films have created more than 4,000 full-time and thousands of part-time jobs in the state. Critics question those numbers. And the legislature's fiscal staff concluded that the credit creates "a negative return on investment."

Commerce Secretary Sharon Decker appeared before a House committee Wednesday arguing for funds to lure new businesses and retain old ones. Decker, whose department oversees the Film Office, called the $10 million "a beginning."

"If this is where we end up, we will do our best ... to make the most of that investment, to come up with a plan that will be important in retaining the industry in the state and helping it grow," she told reporters.

Asked if it would cost jobs, she said, "I don't think it will in the short run because projects are in play. My greatest concern is the long run, that we do the things that help the industry be sustained."

Beth Petty, director of the Charlotte Regional Film Commission, said the budget proposal won't do that.

"The $10 million would not sustain all the current productions we have here," she said. "In the Charlotte region we have built such momentum for productions ... I don't know how we can continue to recruit the number of projects we have."


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Source: Charlotte Observer (NC)

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