Film industry fights for tax break
Posted June 4, 2014
Raleigh, N.C. — Hundreds of film industry workers, suppliers and local officials flooded the legislature Wednesday, asking lawmakers to extend the state's film tax credit.
North Carolina's film tax incentive gives a tax credit per production of 25 percent of all allowed in-state spending, up to $20 million. That credit is refundable, meaning that, if a production earns more in tax credits than it owes in taxes, it gets a check from the state.
The credit cost the state $62 million in 2012, based on allowable spending of more than $278 million. It's set to sunset at the end of 2014 unless lawmakers take steps to extend it.
An economic impact study by North Carolina State University professor Rob Handfield, commissioned by industry backers, found the credit generates a positive net cash flow for the state, thanks to the millions of dollars each production spends in the local economy. But a review by the legislature's Fiscal Research Division cited flaws in the study and drew the opposite conclusion, finding the credit cost the state $45.3 million in 2012.
At a press conference Wednesday morning, Republican and Democratic lawmakers spoke in favor of the endangered credit.
Rep. Frank Iler, R-Brunswick, who represents Southport, where the movie "Safe Haven" was filmed, said Handfield's study is "the only study that's been done that includes all the taxes and income. It's conclusive. It's a winner both on the tax side and the economic side."
Iler compared the competition between states for film production to "Star Wars."
"I'm gonna call it 'Film Wars.' Georgia is the evil empire," he said to laughter from the crowd.
"The eyes of Georgia are upon us. The evil empire is coming to capture 4,000 jobs. Some of my colleagues want to surrender and give them away," Iler said. "We've got to fight for these jobs. To me, it's war. It's economic war."
Rep. Kelly Alexander, D-Mecklenburg, said film production work in an aging warehouse complex in his district helped turn the entire area around with its demands for lumber, furniture, catering, chauffeurs and other workers and supplies.
"When you multiply that across all the productions that are going on this state, that's a tremendous amount of economic activity," Alexander said.
Rep. Rodney Moore, D-Mecklenburg, called the push to end the film credits "narrow-minded."
"We're going to fight our colleagues," Moore promised. "We refuse to let Georgia or South Carolina or any other state take our jobs."
Stacy Barnhill, a key grip, traveled up from Wilmington to lobby legislators. He met his wife, a film location planner, on the set of "Dawson's Creek," and they both worked on "One Tree Hill" for nine seasons.
"That's what paid for my house," Barnhill said. "It's our livelihood at stake."
Barnhill said the extension of the credit is "absolutely critical" to preserving industry jobs in North Carolina. Without it, he said, productions will move to other states actively wooing the industry, and he and his family may have to move with them.
"It's cutthroat," he said. "Georgia has made no bones that it wants our work and Louisiana's. You've got to have an even playing field."
Conservative group Americans for Prosperity will be pushing in the opposite direction.
State deputy director Donald Bryson said AFP will be launching a targeted radio ad campaign urging lawmakers to allow the film tax credit to sunset.
“The film production incentives are explicit crony capitalism. It is a special tax break for one industry." Bryson said in a statement. "AFP is opposed to the renewal of this tax credit. We will be calling on our statewide network of activists to contact their legislators to oppose it from a grassroots level."