The House Commerce meets today and considers SB 943, Expand Film Credit, which increases the tax credit to film companies from 15 percent to 25 percent.

All committee members have the recent JLF spotlight, Not the Best of Both Worlds, which explains why an increase in the tax credit is a bad idea. There is no evidence that the tax credits have even helped the film industry — they will cost the taxpayer $74.5 million and the jobs “created” by film production are short term with 39 percent of wages going to out of state residents. 

State agency, the North Carolina Film office distributes an info sheet claiming the tax credit won’t cost anything for two years (since it’s a rebate). Is a deferred waste of taxpayers money better than an immediate waste of money? The sheet has maps and graphs showing what other states do and include warnings that we have to increase the giveaways to stay competitive. 

Of note: Nine states (Nevada, N Dakota, S Dakota, Nebraska, Kansas, Ohio, Kentucky, Vermont and New Hampshire) offer no film incentives. California offers a 20-25 percent incentive.

Bill sponsor, Sen. Linda Garrou (D-Forsyth) (takes a break from her duties as Senate approps chair) explains the bill and nods to Rep Danny McComas (R-New Hanover) and Sen Julia Boseman (D-New Hanover) who have sponsored similar bills to benefit the Wilmington area. Garrou says the credit will create 4,000 jobs. McComas says this will help “Hollywood East” and benefits the journeymen. Says we just lost a Nicholas Sparks movie to Savannah. Rep Sandra Hughes (D-New Hanover) says our people are skilled and need to have the jobs here.  Incentive is needed, it’s economic strategy. They have a special effects tank, large costume collections, and skilled workers. Only thing missing is the incentives.

Wilmington Mayor Bill Safo says this is about jobs in a clean industry. Can only be competitive if tax credits are at 25 percent. 

Rep Becky Carney (D-Mecklenburg) likes incentives. Says it’s a good idea to “Step out now in these economic times to keep jobs for arts students here.”

Rep Ray Rapp asks about their estimates of jobs produced. The Dept of Commerce rep says they prepared the numbers after asking companies that had left if the incentives had any effect. Looked at full time equivalent jobs.

Rep Marilyn Avila (R-Wake) asks for figures of growth since 2000 rather than starting in 2005 to see the real growth and the impact of the 15 percent credit before we consider increasing it. McComas says we need to decide if we are commited to growing the industry or not.

Rep Hugh Blackwell, R Burke, asks if they have done a similar study of how many industries have left because of the incentives? Why are we doing this only for film industry? Why not expand to all other industries?

Garrou makes the comment that the film industry is a “clean” industry and “does not require the building of schools”. Which would seem to underline the point that these jobs are short term and go mostly to out of state residents who are raising their families elsewhere.

Commerce Secretary, Keith Crisco, in response to Blackwell’s questions says it is very complicated and we should not be looking for a broad tax credit for all industries.

By a voice vote, the bill passes the House Commerce Committee.