by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor, John Locke Foundation
Variety today shows real concern in California over California-set films departing the land of Hollywood for far-flung locales offering the winning incentives package. Some highlights:
When Paul Audley took the job as president of FilmL.A. in late 2008, he was astounded to discover that physical production on the $70 million pic “Battle: Los Angeles” wasn’t being done in Los Angeles.
“It stunned me that the movie was shooting in Louisiana, and that the state of California was letting this happen,” he recalls. …
The latest example of a locally set runaway is New Line’s upcoming earthquake thriller “San Andreas,” in which a helicopter pilot played by Dwayne Johnson rescues his daughter in San Francisco after a 10.0 quake. Except for six planned days of shooting in San Francisco, the entire $100 million movie will be made in Australia at the Village Roadshow Studios in Gold Coast, Queensland.
In December, “San Andreas” was granted a portion of Australia’s $20 million film fund set up specifically to attract overseas movies. Additionally, the film benefits from offsets from the Queensland Production Incentive Scheme, as well as local payroll tax rebates and federal rebates. …
“Producers tell us, ‘I’d love to shoot here but I have to go where the incentives are,'” Robbins notes. …
Further south, not a frame of “Rock of Ages,” set on the Sunset Strip, was shot in Los Angeles, although filming did take place in Hollywood — Florida, that is — at the Hard Rock Casino, along with a six-block section of North Miami Avenue in downtown Miami, decorated as a late-1980s version set of the Strip, replete with the Whisky-a-Go-Go, Frederick’s of Hollywood, Tower Records and the Angelyne Billboard.
Even the ruins of a future Los Angeles shown in “Elysium” were shot in Mexico and Canada.
If North Carolina can become Afghanistan for film producers chasing our incentives, then Georgia can become North Carolina, Australia can become Long Island, and Louisiana can become Los Angeles for the same reason. All that matters, then, is which state can offer the biggest giveaway to major productions — the rest is “the magic of Hollywood.”
This provides another illustration why film tax credits are such a poor “economic development” tool (even apart from their being outweighed by their unaccounted for opportunity costs). State policymakers are chasing a moving target, competing not only with other states but against other nations as well.
Right now film incentives advocates are pushing to make North Carolina’s incentives permanent, since they are supposed to sunset at year’s end. But don’t think that they will ever be permanent. Look what is happening in Maryland right now:
A few weeks before Season 2 of “House of Cards” debuted online, the show’s production company sent Maryland Gov. Martin O’Malley a letter with this warning: Give us millions more dollars in tax credits, or we will “break down our stage, sets and offices and set up in another state.”
A similar letter went to the speaker of the House of Delegates, Michael E. Busch (D-Anne Arundel), whose wife, Cynthia, briefly appeared in an episode of the Netflix series about an unscrupulous politician — played by Kevin Spacey — who manipulates, threatens and kills to achieve revenge and power.
In recent years, Maryland has spent more than $40?million to reward movie and television production companies that choose to film in the state, and most of that largesse has gone to “House of Cards.”
“This just keeps getting bigger and bigger” Del. Eric G. Luedtke (D-Montgomery), who until now has supported film tax credits, said at a hearing on the issue last Friday. “And my question is: When does it stop?”
Productions threatening to leave the state if policymakers don’t increase film incentives is a short step up from productions threatening to leave if policymakers don’t keep them as they are. If North Carolina makes their incentives permanent, then production companies’ leverage will ratchet up to that level.