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MPAA says not extending film incentives already hurting NC

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WILMINGTON, NC (WWAY) -- Major film and television series producers are warning the state could lose thousands of jobs and millions of dollars it does not extend tax incentives set to expire next year.

In a letter to state leaders last month, the Motion Picture Association of America's Senior Vice President for Government Affairs said the General Assembly's failure to extend the incentives for film projects is already having a negative effect on North Carolina.

The MPAA says tax incentive programs are important, because they allow long-term planning for productions and could tip the balance between profit or loss and success or failure.

Click here to read the letter from the MPAA to state leaders

The state spent $60.5 million on the program last year and is still processing claims.

Wilmington Regional Film Commission Director Johnny Griffin says having the film incentive is a big draw for films who without it might go to other states.

"Obviously we have other things here that are good for the productions, as far as the sound stages, crews, locations and weather. There are a lot of different things that make this a great place to work, but that is just one of the pieces to the puzzle right now, and without that it certainly puts work in jeopardy," Griffin said.

Critics of the film incentives say the money could be better spent in other places to provide across-the-board tax relief, which would also generate jobs.

In the last year incentives have helped bring several productions to our area, including the box office hits "Iron Man 3," "Safe Haven," "The Conjuring" and "We're the Millers," as well as TV shows "revolution," "Under the Dome" and "Eastbound & Down"

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Heat's Food for Thought

While reading these comments I am blown away. As a friend said " We're 20 years behind the rest of the country. ON PURPOSE. Which makes no sense", and I agree. Yeah, taxes suck...but you gotta give a little for a return.

Sarcastically speaking, Its a shame for the business, landowners(farmers) and homeowners that receive 1000's for the use of their space for a day. For those who disagree, please do not visit sets and take pics,and honk at productions you see on the street so we have to start over and "waste" more money. Don't go to the theater to be able to spot a familiar location in our state,and pay your hard earned money to see it. Just boycott us if you're so offended!!!!

Bet not one of you has worked 15+ hours of physical labor (and love every minute of it)in the sweltering heat and blistering cold for you to be able to sit your fatt but down in a climate controlled environment with comfy recliner seats to laugh, cry, and devour that tub of buttery popcorn.

The 6 year college degree, 1000'of man power at work, film families that I have made and love so much, Its been a ride! U-Haul? Two Men And a Truck? Pack-Rat?

Better yet, let me stay in the state I love, North Carolina and collect welfare, get food stamp,and go to the ER for every little sniffle and waste doctors and critically ill patients time.

Sincerely,
The Set Designer

There is so much I would

There is so much I would like to say about this issue after reading all these comments. It's emotional for us in the industry and these comments against the film incentives scare me. They scare all of us…it's our life.
For the people against the incentives, you're right, they should not exist, they should not exist anywhere and allow each state to compete equally. I agree with you. But the problem is that the incentives do exist elsewhere. They do, and there is nothing we can do about that. The only thing we can do is compete without kidding ourself that if we get rid of them the films will leave. They absolutely will and they will leave us all behind, some of us skilled and some of us weathered but in the end, scared and lost. I look at this issue different. I look at it like this….Here in N.C. we have a group of people (film employees) who have an issue (holding employment), an issue that many others have as well, and right now we have something that has fixed that issue. Please understand that this is something that is working, maybe not for you, I understand that, but certainly for one of your neighbors. If we rid the incentives for the sake of helping others and we succeed, all we will do is shift the problem from one group to another. Please…We are begging you, don't treat this as an 'either-or' situation. We in the film industry had a problem, and right now it is fixed. Lets please find a way to build on without using the blocks that hold us up. There's got to be a better way.

If the incentives are such

If the incentives are such that they get 25% of the tax revenue they generate, the state gets the other 75%. That is 75% more than we would get if the movie people take their business elsewhere.

When the movies are filmed here and they bring in people from out of town to work, then those people, like the tourists, spend their money here. If the movies quit getting filmed here, then the local businesses do not get that revenue.

It is not only people from out of town who work for the studios. There are people who live here who work for the studios. If the films are no longer made here then those people will move. When they go, the businesses lose customers. When they go, they no longer pay taxes here.

Of course the studios are in the business of making money. That one really is s no-brainer. The studios, like every other business, will go where it is less expensive to operate. That is just plain common sense.

2020

"If the incentives are such that they get 25% of the tax revenue they generate, the state gets the other 75%. That is 75% more than we would get if the movie people take their business elsewhere."

Here, let me make it simple for you, as you make a grievous error in judgement. They do NOT get 25% of taxes generated. They get a credit of 25% of money spent.
If a movie filming spends $20M they pay into NC at a rate of about 7%(the normal sales tax and payroll tax)
7% of 20M = $1,400,000 of state taxes.
They get a CREDIT of 25% of MONEY spent
25% of $20M is? $5M
The state loses $5M - $1.4M or about $3.6M on that film.

Now the MPAA will say that multipliers make up for the difference. It is virtually impossible to make up that difference without having additional spending of at least $49M.
The multipliers are way WAY off.
This is a scam of epic proportions and benefits out of state corporations - NOT North Carolina corporations!
And don't get me started on indirect COSTS associated with filming - which the MPAA plays down.
Think about this-----what do filming crews do for income when a movie is completed? They collect unemployment! Which is? A state expense.

This is a bad incentive program.

Vog

Tax Incentives

Why is it that no one is saying how much money is being pumped to N.C.?
Last year the film industry spent a reported $278 Million in goods, services and wages. Think about for a moment. $278 million to hotels, gas stations, bars, restaurants, grocery stores, rental car agencies, permits, people, the list goes on and on. The state had to pay back $69 million, which left $211 million in North Carolina in one form or another. They also created over 14,000 jobs, paying jobs, jobs that NC citizens paid taxes from their wages. It doesn't matter how you spin it, the film industry brings in a hell of a lot more than NC pays out, and if these incentives go away, the state will lose $278 million instead of $69 million, 14,000 jobs instead of 14,000 gainfully employed, and will increase its own unemployment figures. Talk about a state expense. Insurance sir, is a scam. Gainfully employed are not.

Well said Sir!! Love

Well said Sir!!
Love you!
Your film family member,
Heat :)

Correct me if i am wrong,

Correct me if i am wrong, but my unemployment insurance is money paid into the DOL from my employer. It is money earned from the sweat of my brow, not taxes, not money set aside by the state, and definitely not a hand out. If i dont work in NC, the money isnt generated for unemployment. You stand to gain by continuing to have a tax incentive. But by all means, kill the incentive and drive all the work to me in GA. We generated 2 billion last year and wouldnt mind making even more. Dont be dumb. Keep films there.
That is all.

Well said Guestfellini

That was an excellent breakdown of the incentive program Most people who say the filming industry doesn't bring jobs should get out and watch one being made.Then tell the elections,caterers,set builders,people from transportation and the list goes on and on and on how it doesn't bring jobs.Not to mention those extras who subsidize there incomes this way.Maybe even speak to the tourist who come to takes pics or eat in a place they saw in a movie,Then speak to the store owners,who customer base is up when a movie is filmed within a block of their business.These are some of the things you could do,or you could just stay in your house and complain.Remember if you don't like Wilmington ,NC then you can always leave out,on the same road that brought you here.

Wow ! That sure sounds great !

If it wasn't for the fact that your spelling, grammar and punctuation was so bad, and that you didn't even bother to try to substantiate any of your conjectures with actual numbers, I would find you credible. (Just in case reading between the lines proves difficult for you; I don't.)

We all already know that the film industry provides economic benefit. That's not even the issue here. What has never been proven (except in self serving reports from the industry itself) is that the film incentives provide a positive bottom line increase in state revenue vs. the monies that are actually being given away in incentives.

Anyone can paint a rosy conjectural picture. The film industry does it for a living. What you're saying is "trust them" regardless of the unsubstantiated numbers. Guess what? That's not going to happen! Somehow, I just have a feeling that they're a lot more interested in their bank account than they are in mine. (Crazy thinking, huh?)

As to the "you can always leave" Wilmington" comment: I don't recall anyone around here anointing you the grand emperor in charge of who lives here and who leaves here. What you have done though, by saying that, is to alienate a whole lot of people with your rudeness. You've also proven with your asinine remark that you don't even understand that this is a statewide issue and not just a Wilmington issue. Nice work "brainiac".

Dear Grammar Nazi, Your

Dear Grammar Nazi,
Your choice of terminology is impressive!! Thesaurus is a great tool huh?

Could you please dismount your 'high-horse". Its very unattractive.

"We all already know that the film industry provides economic benefit. That's not even the issue here." So what?? Can he not voice his opinion?
Its a heated topic! Get over it! Looks like YOU are the forum mayor.

Sincerely,
A set designer that works 15 hours in one day,comes home covered in sweat,mud/dirt, cuts/blood, pays for own health insurance, no 401K,and a proud owner of a Bachelor of Science degree in Interior Design and a minor in Film Studies. (And loves every minute of it)

PS: Have fun sitting in your cubicle, underneath headache inducing florescents,and staring at your computer screen. I think no fresh air hair has maybe caused "Get a life,take the cork out of your butt, enjoy life, why complain, smell the roses sometimes," syndrome.

**air... lol please crucify

**air... lol

please crucify me on that mistake because my keyboard keys stick from copious amounts of sugared coffee.. :P

Sincerely,
The Set Designer

Mr Griffen's concerns might actually be closer to home

"Wilmington Regional Film Commission Director Johnny Griffin says having the film incentive is a big draw for films who without it might go to other states."

Perhaps Mr. Griffen is actually more concerned with his own paycheck.

Be honest... Who wouldn't..

Be honest... Who wouldn't.. Good Grief.. Are you're not concerned with your wallet? ok. :)

Sincerely,
The Set Designer hat works her butt OFF for a paycheck!!!

Extortion

I think this shows that the film industry is interested in our tax dollars and not our people, scenery, location, etc, etc. I have, always, been against incentives of ANY type involving MY tax dollars. But now that an industry is trying to extort my tax dollars, I am even more against it.

Wilmington Observer

Seriously?? Do some

Seriously??
Do some research! You have to put A LITTLE IN TO GET SOME OUT. BILLIONS AND JOBS FOR OUR STATE? THATS EXTORTION?? WOW

Seriously,
The Set Designer

Nothing but pure greed

In the MPAA's threat letter, they mention that now Disney wants nothing to do with the state. This is after making a film here that made twice it's budget on it's opening weekend. Since opening, it's made SIX times it's budget - $1.2 Billion! They were able to do things here that they would have real trouble with anywhere else. Same thing probably applies to "we're the millers", or any of the other highly successful productions shot here.

This is just greed!

I'm sure that these tax incentives being the drop in a bucket that they are compared with the vast amount of money they "spend in state" only to ship it out of state via the shell companies they create here are simply viewed as pure additional profit. If they leave NC for say, Georgia, they will likely still film here for convenience, but for the purposes of Georgia's tax incentives, the "money was spent" there.

All the "know it all's" will crawl out of the woodwork to deny all this, but in the end, an interesting question would be what state (or country!) gets's to tax all those profits after the movies are released.

Numbers quoted are from wiki...
http://en.wikipedia.org/wiki/Iron_Man_3

"film and television series producers are warning the state"

Maybe it's just me, but I'm never really happy when some big business someone, from somewhere else, attempts to extort money from me through threats.

Take your threats and shove it!

I am against all incentives

But I am particularly against the movie incentives for several reasons.
First, government should not pick winners and losers.
Second, if a state feels it MUST give incentives they should be given to companys that will stay in NC and not hire part time temporary workers. There are very few skilled positions in the movies, according to employment figures using NAICS and SIC code descriptors. Extras make less than minimum wage.
So why should NC give them a 25% tax break when they COULD make hundreds of millions of dollars off our scenery, using some of our workers, and not pay taxes on the box office receipts?
Then of course there are the various studies that say that movies just don't pay:
http://www.usnews.com/opinion/blogs/economic-intelligence/2013/04/16/fil...

"North Carolina's Legislative Services Office analysis shows their film credit program realizes even less impressive returns. In 2011, the state awarded $30.3 million in film credits – reimbursing productions that spent over $250,000 up to 25 percent for qualifying expenses. Yet, the program could only claim about 55 to 70 new jobs."

ANd this as well:
'But states are finding that it is barely worth the lost revenue. A recent report by the Massachusetts Department of Revenue found that of the $44 million in tax credits awarded in 2011, two-thirds of the $175 million in spending generated due to economic activity went to out-of-state workers, and 47 percent of the wages generated, or $53 million, went to those earning over $1 million."

Then there's the multipliers they use to "tell their story"
http://www.carolinajournal.com/daily_journal/display.html?id=10149

"A 2008 study conducted for the New Mexico Legislative Finance Committee: $13,400 in net revenue forgone per net job created; only 14 cents in revenue gained per dollar of film subsidy claimed"

And

"The multiplier being used in the “Iron Man 3” study — while North Carolina’s film incentives are under scrutiny by legislators — is 8.99. The study proclaims “The film generates $8.99 in economic output for every dollar of tax credit received by the production.”

It is interesting to note that film studies produced by, or paid for the MPAA are the ONLY ones that show positive economic development. In many cases the states lose money.
If incentives need to be given? Give the money to the Gov and let him hand it our to company's that will move here, hire NC workers and pay payroll taxes, property taxes etc.....

These folks are extorting money from governments

Vog

VOG

I am impressed. I think you are the only one who has ever posted a reference to SIC and NAICS codes. I tip my hat to you.

Like you, I abhor incentives of this nature. Funny how no one mentions the local Legislators who garner some gravy through rental of their properties.

No one has asked -- where do the funds come from? They may be just tax credits, but they have to have a foundation from which checks can be written.

The State budget includes X number of dollars for industry incentives. Once those funds are allocated to specific industry activities, they are gone until the next fiscal year.

Just like any budget, you can not allocate as a tax credit when you do not have the funds.

Thanks Tom

The NC Film Comm and the MPAA are loathe to point out that the funds used are NOT taxes THEY pay in it is gross receipts of money spent.
So the state is granting credits from Taxes taken in, and giving incentives based upon gross spending.
Considering the sales and income tax rates average about 6% to 7% then you see the problem.
Lets assume a movie spent $100M. The state rakes in 7% or $7M.
The state granted them an incentive break of 25% of $100M or $25M.
The MPAA claims that for every dollar spent you have additonal spending (indirect) of $8.99.
IF that ere true the budget would be balanced, flush, and extended benny's for unemployed would be no problem.
What I would like to see is the box office receipts taxed not just for sales tax to their respective states but a surcharge applied that is returned to the state in which the movie was filmed.
That might bring the MPAA down to earth.
Movies were filmed here before the incentives and will be after they're gone. To continue them is pointless.
Vog

Incentive is the wrong word

Would more people comprehend our film program if it was labeled as a "rebate" rather than "incentive"?

The state does not give any money to a film/TV production until they've come, hired crew, rented equipment, etc. There is an audit to verify sales tax spent before the 25% REBATE is given. The production has still spent 75% and then there is the ancillary benefit of the tourist business and what the local crew spends in their own community while they are employed.

Think of it as a coupon offering 25% off. The store does not GIVE you money to walk in the door. And you still spend 75% with them.

NC NEEDS jobs. The legislature did nothing to encourage job growth during their last session. Will they really be so short-sighted to dump a program that spends millions of dollars with local businesses, employs local crew with good-paying jobs, is a clean industry and attracts tourism? If so, then Georgia and even SOUTH Carolina ("red states, too) would love to have our crew, their families and tax money!

IF vendors and business owners don't get involved with our local representatives, I believe many crew and their families will relocate after Dec. 31, 2014. Maybe that's what the GOP/ALEC/Art Pope really wants: have the educated, talented, creative folks to leave the state and encourage fracking, Titan Cement and more WalMarts for those that are left.

NC is not Best Buy,

Yes, the program is a rebate. But when I get a 25% rebate for shopping a Best Buy, the cost of the rebate falls on the store--Best Buy is out the money because they get the revenue from what I buy. The state taxpayers are not paying for the store's rebate. But under the film subsidy, they ARE paying for it. Since the film industry is the one benefiting from the revenue, let them pay for the rebate on their own.

Carpet baggers

GF your not from around here are you, if you were you would not insult the people that built this great state so your beloved film companies can come down here and exploit what we have built. Nice dig you threw in about the GOP ,attaching them to titan and wal mart. and then insulting everyone that is not attached to the film industries as backwards mouth breathing morons now ask yourself would you want to give such Gracious and thoughtful people such as yourself 25% off to hurl insults and denigrate our way of life? not me if you come down here to stay you must like it and that is fine but do not insult us we would rather you just keep your carpet bagging attitude and your rude remarks to yourself, what you need to be is grateful that we are even friendly to your type but no you come down here and try to make just like the crap hole you came from.
if you are not happy leave.

I'm glad that the MPAA has

I'm glad that the MPAA has spoken up. Let them take up paying the Wilmington Film Commissioner's salary. If Wilmington's taxpayers stopped subsidizing this "do nothing's" job along with the salaries of Wilmington Downtown and the Wilmington Development "authority" maybe we could afford some decent bonuses for police officers and firefighters.

Let the film industry pay

Let the film industry pay their fair share like everybody else. It is not right to put an extra burden on taxpayers just so big business can make more profit. If there were no so-called "incentives" to be had anywhere, the filmers would still make their movies and pay their fair share.