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

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.