New report says film study wrong, NC loses money on incentives

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Submitted: Tue, 04/08/2014 - 3:57am
Updated: Tue, 04/08/2014 - 2:42pm

WILMINGTON, NC (WWAY) — A report by legislative staff says a recently-released study of the film industry in North Carolina is wrong about the state benefiting from tax incentives for movie and TV productions.

In the memo “Preliminary Review of Handfield Film Study” requested by Rep. Rick Catlin, a New Hanover County Republican, the General Assembly’s Fiscal Research Division (FRD) concludes that Dr. Robert Hanfield’s report that the Film Product Credit’s net contribution to the state is positive “is based on a series of misunderstandings of the (s)tate’s tax laws, invalid or overstated assumptions, and errors in accounting. Our analysis, which corrects for the most obvious errors in the Handfield report, shows that the Film Production Credit creates a negative return on investment.”

“I stand by my study,” said Handfield.

Film industry proponents pointed to the results of the Handfield study, commissioned by the film industry and film commissions across the state, as proof of the positive value of industry to North Carolina.

“They look at things through a certain lens, just different from the one I am looking at,” said Handfield.

The Handfield report found that the industry has a net contribution of $25.3 million. The study also found the industry is responsible for 4,259 jobs with an average wage of $66,000.

“I’m not against the film industry, but we need to have a program that show a positive return on investment,” Catlin said. “Based on Fiscal Research, we have to make some changes and compromises.”

The FRD analysis, though, says the fiscal impact is a net loss of at least $33.1 million. The authors of the FRD report say they have not received from Handfield “satisfactory responses” to explain his methodology and assumptions.

“The bottom line is just to look into the facts and trying to find a process that works for everybody,” said Catlin.

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55 Comments on "New report says film study wrong, NC loses money on incentives"

2015 years 8 months ago

you could say that about ANY industry Frank. What it comes down to is state sponsored support and subsidies of one industry over another not matter how well intentioned they may be. What about print artists? Why not give them subsidies for their spaces and travel and other expenses? Maybe they’ll have shows and draw people from all over the world to spend money in Wilmington. Why not the boat industry? People will come from all over the country to buy boats here because they are spectactularly made and cheaply sold thanks to tax incentives in NC. You could go on and on. My industry could use a couple of freebies too. For all of the supposed positives of the movie industry our residents suffer through closed public facilities and rerouted streets an we pay them for the privilege for movies many of us have zero interest in seeing. :/

Jon Fitz
2015 years 8 months ago

Just wow. I work in LA and have worked with many actors. Most are Extremely arrogant, but this is staggering. Please be sarcasm for the love of god. What does any of what you’re saying have to do with Film subsidies anyway?

Faye Burckhalter
2015 years 8 months ago

I wish that they would hire more local people then bringing in people from out of state…. When you get incentives for something you should use local workers and talent/// Love that the movies and shows are filmed here and I know the areas on the movies and shows….. Keep the Film here but use LOCAL first..

Truth doctor
2015 years 8 months ago

“In essence, by including the spending of spouses, the Handfield report overstates the tax revenue associated with film workers’ consumer spending by 50%.”

Hard to imagine anyone would believe there are 4,600 people making $66,000 per year each. Hard to imagine there are any more than 800 resident North Carolinians whose primary income is generated from working on films.

Most money earning a tax rebate is spent on outside Equipment and materials from outside NC. To qualify the check has to be written to a NC company. The loophole is a pass thru company registered in NC that receives a couple of percent of the actual cost. It may look on paper that a local vendor received a check for $100,000 but in reality because of the loophole, it’s only $1,000-2,000. Handfield would have you believe the entire $100,000 stays here. It’s a scam.

Leigh Anne
2015 years 8 months ago

You are absolutely right! We should encourage all of your above industries and more to bring their money to our community! Is your detour really such an inconvenience that you would pass on the increased revenue for New Hanover County? We could really benefit from more of everything.