As Florida lawmakers work to extend funding for the state’s film incentive program, some researchers are calling the idea that targeted subsidies increase revenue an example of Hollywood magic.
Khadif Saunders is a 2nd year master’s student at Florida State University’s film school. He’s on his fifth day of principal photography at a vacant property on Tallahassee’s South side. Although the young auteur is laser-focused on the project at hand, his mind can’t help but wander to thoughts of his upcoming trip to Los Angeles, where he hopes to make valuable connections he can use upon graduating.
“I actually got – I produced a film, a student film that was nominated for an Emmy. So, the College Television Association is flying me out to Los Angeles, I get to meet producers, and that will probably be one the deciding factors of where I move when I get out of here,” Saunders says.
Saunders also says he’s pretty sure he’ll end up in New York or California but, that doesn’t mean he wouldn’t like to stay in his hometown of Miami. Ultimately, his decision hinges on where he can find work and a film graduate’s best bet lies in Hollywood. That’s why FSU film school advisor Nick McKaig thinks film subsidies are so important. He asserts attracting production companies to the Sunshine State will help keep students like Khadif from fleeing to others.
“So they grew up in Florida and they applied to the program because were a top public program at a public school and that’s the primary reason why, in addition to our prestigious position in the nation, but also because we’re a Florida school is why they would apply to the program,” McKaig explains.
FSU’s film school routinely makes it into top-ten lists around the country and that 97 percent of its graduates have jobs or internships lined up before getting their diploma. But, McKaig says those jobs are rarely in Florida. That’s one reason lawmakers in the past have supported tax breaks for production companies filming in the state and Venice Republican Senator Nancy Detert agrees.
“I think we just need the language so that we don’t have to sit here and have a movie made about the story of Ybor City and it’s going to be made in Savannah, Georgia,” Detert said during Monday’s meeting of the Senate Commerce and Tourism Committee.
The state began officially handing out tax credits to production companies in 2010. Since then the state has set aside close to $300 million in tax credits for the production of films, TV shows and commercials. That money was supposed to last until 2016 but, by 2014 the well had dried up. Now, Detert and her fellow senators are asking for an extra $100 million for the next two years and a four-year extension to the program ending in 2020.
Still not everyone is sure incentive programs like this one are accomplishing their goals. Matt Mitchell is a researcher at George Mason University. He says more often than not, a state doesn’t recoup the cash it gives away.
“Massachusetts for example, found that for every dollar that they give away, they only recover 16 cents. Connecticut found that for every dollar they give away they only recover 7 cents. These are pretty common, these aren’t outliers, and Louisiana is 13 cents,” Mitchell said in a phone interview Wednesday.
And Florida doesn’t seem to fare any better. In a 2012 study commissioned by the state’s film department and conducted by the office of Economic and Demographic Research, it was found that for every $5 that the state gave away, it only received $2 in revenue. That being said, proponents of incentives say the program creates jobs and increases GDP but, Mitchell says those economic indicators are misleading because most of the jobs the industry does create are temporary and the highest paid workers aren’t usually based in the state their filming in anyway. And he also mentions that recouping lost revenue is only one of a whole host of problems with film incentive programs.
“Maryland is right now in the midst, I don’t know if you’ve noticed, they’ve had a lot of controversy in the last couple days because they offer credits to House of Cards to film there,” Mitchell points out.
Maryland and Netflix, the producer of the popular TV show, seemed like a match made in heaven. That is, until the online video streamer, turned TV producer got greedy. The company gave Maryland an ultimatum, give us an extra $4 million or we shoot somewhere else. How that very public battle between state and producer turns out is up for speculation but Matt Mitchell expects it won’t be the last situation of its kind. And he says tax incentives can actually harm a state’s reputation.
“To me, if I’m a film production company, I’m going to say ‘boy that’s the last place I want to go is that place because they’re going to claim sour grapes and try to claim my property,’” Mitchell remarks.
But with 44 states, the District of Columbia and Puerto Rico offering film incentives, being one that doesn’t, could be a disadvantage. However, Mitchell says an easy way to overcome that is by going the way of Nevada, which doesn’t have a film incentive program. Instead, the state has a lower overall tax rate, which Mitchell says is more than sufficient to lure production companies.
Detert’s bill also moves Florida’s film office and advisory board from the Department of Economic Opportunity to the public/private partnership Enterprise Florida. DEO will still retain final say on tax credits and counties may now be required to match a percentage of the subsidy given to certain productions.
