NEW ORLEANS (AP) — How much is it worth to keep the TV and movie industry humming in Louisiana?
Lawmakers will tackle that question as they decide whether to keep or expand incentives designed to make Louisiana competitive as an alternative to Hollywood.
If the Legislature takes no action in its session opening Monday, the current 25 percent tax credit for movie and TV show makers will drop to 20 percent next year and 15 percent in 2012. That’s a scenario those heavily invested in the industry say would be disastrous.
“If it’s reduced, it will kill the film industry in this state,” said Daniel Forman, president of a new multimillion-dollar studio in Harahan. He said he’s counting on the state to keep the incentive at 25 percent or raise it to compete with states such as Georgia, which has bumped its incentive to 30 percent.
Gov. Bobby Jindal has said he will support legislation to keep the tax credit at 25 percent through 2012. Several legislators have prefiled bills to do so.
So far, there appears to be no opposition to keeping the 25 percent credit. But a move to raise it might get an icier reception, said Greg Albrecht, chief economist for legislative fiscal office.
“We’re spending big money to do this, and we’re putting a lot of public resources to build this industry here,” Albrecht said. “Is it working? Yeah, it’s working. But are we making more money than we’re giving up? No, not even close.”
Albrecht said that while many tout jobs the program helps create, there are concerns about the cost to the state. The credit covers 25 percent of a production company’s in-state expenses and 35 percent of its in-state labor.
A state-commissioned report released earlier this year that covers the period from 2002 — when Louisiana began offering film tax credits — through 2007 shows the state has yet to make back what it pays out annually in the program.
In 2007, the latest year for which figures are available, Louisiana spent $115 million on credits and received $14.6 million in state taxes and fees from production companies.
The report shows more than 65 film and TV productions spent $429 million in Louisiana that year. Roughly half, or just over $200 million, was spent on payroll for Louisiana residents who served as extras and crew members. The rest went to goods and services such as costumes, equipment, trucks and lighting.
That’s millions of dollars that would not have otherwise been spent in Louisiana, said Rep. Hunter Greene, R-Baton Rouge, chairman of the House Ways and Means Committee, which considers tax credit bills.
“You get nothing if they’re not here,” Greene said. “So the state is getting some benefit.”
Forman agrees, and said lawmakers should keep in mind the industry’s “ripple effect.” He said restaurants, courier services, fuel suppliers and hotels and among the many non-film businesses that benefit when movies and TV shows are shot in Louisiana.
This spillover into other industries had an estimated economic impact of more than $700 million for 2007 alone, according to the state report.
Albrecht, who contributed to the report, said the figure is overzealous, though he acknowledges companies are seeing benefits.
“It’s been wonderful for me,” said Kynisha Jones, who owns a cleaning service in New Orleans and is currently working on the set of the Disney television show “The Imagination Movers.”
Jones said she started her business with just one employee almost four years ago and after she began serving film and television production in 2008 she added three more workers.
“When productions are in town, we do really well,” she said.
Tax incentives aside, Louisiana’s has other advantages for production companies, Albrecht said.
“We’re a good, efficient place to shoot, and we know what we’re doing,” he said. “The ultimate goal is to have a self-sustaining industry here, and have it because the facilities and labor force are good here, not because you’re paying them to be here.”
Interesting backdrops such as the French Quarter, plantation homes, swamps and Spanish moss-draped forests help, too.
At least 10 films are expected to shoot segments in Louisiana in the next few months, including big-budget productions such as “The Expendables” and “Jonah Hex”
——Contact The Daily Reveille news staff at [email protected]