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Monday, 07 February 2011 13:50

Eliminating Missouri’s Film Tax Credit is Just Plain Stupid

Eliminating Missouri’s Film Tax Credit is Just Plain Stupid
Written by Bill Boll
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In 1995, I was living in Los Angeles and working as TROMA, Inc.’s west coast director of development.  The most glamorous thing about the job was my business card, but it did have an occasional perk--like the fancy invitation for a reception by the North Carolina Film Office. 

 It promised free food and booze, and the chance to hang out with a couple A-list celebrities.  (Kevin Costner?  Barbara Streisand?  I forget, I was more interested in the free food and booze.)  They had a pretty impressive spread, even an ice swan.  I stuffed myself with poached salmon and premium gin martini’s; all I had to do was to pretend to seriously consider shooting the next Toxic Avenger movie in and around Wilmington.

Around that time, the Hollywood Reporter put out its annual locations issue, crammed with ads by film offices and commissions from virtually every state.  Dwarfed by the full and half-page display ads was a tiny, text-only box inviting the reader to shoot in Missouri.  At that moment, it hit me that my home state was not serious about courting film productions.  Fifteen years later, as  Governor Nixon plans to eliminate Missouri’s film tax credit, I can see that the situation has not improved.

A state tax credit functions pretty much the way a store coupon does.  A store issues a coupon as an incentive to shop there, as a way of bringing in business it wouldn’t otherwise have.  An effective coupon increases the store’s overall profit by increasing its sales volume, even though the profit-per-transaction is lower.  States issue film tax credits to entice film productions, which help the economy both by increasing business in the private sector (hotels, restaurants, etc.) and by increasing the state’s tax revenue.  Because of the potential windfalls—and because it costs nothing besides administrative effort—forty states offer tax incentives to lure filmmakers.  It is a highly competitive market.

 

Inexplicably, Missouri is pulling itself out of this market at just the time our economy needs it the most.  The budget committee who recommended eliminating the credit claimed that it didn’t give a positive return on the investment.  This is patently untrue—so how could they say that?  Mike Ketcher told me the committee used a model that inaccurately under-calculated the economic activity film productions generate.  He said the model placed great emphasis on the number of full-time jobs created in the state.  This might be appropriate for the coal industry or the wine industry, but the film industry doesn’t work that way.  Another factor might be the pitifully small amount of financial incentives the Missouri film tax credit has provided: $4.5 million annually.  This is the smallest tax credit that any state offers to filmmakers, and also less than 1% of the total amount of tax credits available in Missouri.  Filmmakers who want to do business in Missouri must effectively “wait in line” for the limited funds; many are turned away or offered only a fraction of what they could get elsewhere.  For the budget committee to complain about small positive returns is like a store offering a coupon’s discount to the first ten customers only, and then complaining that the coupon didn’t bring in much business.

 

The budget committee also said that the film tax credit served “too narrow an industry.”  This is also BS, considering how much of a production’s budget goes to ordinary businesses like restaurants and hotels.  Productions have to rent locations and hire security guards, drivers and extras, none of whom are “industry professionals.”  Brent Jaimes told me about a little mom-and-pop frame shop that got like $27,000 in business from “Up in the Air.”  Stuff like that is pretty typical.

 

I don’t really foresee St. Louis having a burgeoning film industry like North Carolina, Louisiana and Michigan have.  But I do think that a decent tax credit would keep us in the running for films that actually WANT to shoot here, for whatever reason.  It would give us a level playing field.  Eliminating the credit altogether would force productions to go elsewhere.  And the Gateway Arch?  They can just CGI it in post.

 

This opinion piece was written by Bill Boll, a filmmaker and musician, and the night-time cablecaster at KDHX.

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