Editor’s note: This story has been updated to reflect the passage of Senate Bill 254 after the publication of today’s Daily Report PM.
A bill that would revamp the movie tax credit program in hopes of reviving the state’s film industry has passed the House Ways and Means Committee and is headed to the full House floor for debate.
Senate Bill 254 was overwhelmingly approved earlier this month by the Senate. The bill seeks to bring stability and predictability back to the industry, encourage more homegrown productions, and reduce the cost to taxpayers by capping the tax credits—currently limited to $180 million a year—at $150 million a year.
Key to the program, however, is that the incentives would be capped on the front end, before producers have spent their money, rather than on the back end, as is currently the case. Movie and TV production in Louisiana has come to a virtual standstill since the Legislature in 2015 limited the program to $180 million in back-end caps in an effort to save the state money.
“This bill isn’t perfect and the cap is lower than we’d like,” says industry attorney Robert Vosbein, president of the Louisiana Film Entertainment Association. “But it’s the best compromise that has something for everyone and brings long-term predictability to the program, which is very important to the industry.”
Both Gov. John Bel Edwards’ administration and the industry are backing the bill, which is likely to have a tougher time in the unpredictable and deeply divided House than it did in the Senate.
Industry supporters of the measure have been making the rounds to editorial boards and meetings with state lawmakers, trying to combat data from state and independent analyses that show the state is spending more on movie and TV industry tax credits than it is getting in return.
An industry-backed video that has been sent to lawmakers features testimonials with dozens of small businesses around the state—including Vivid Ink in Baton Rouge—whose owners attest to the trickle-down effect the movie industry had on their establishments and the state’s economy as a whole.
Trey Burvant, director of operations for Second Line Stages in New Orleans, tells Daily Report that economic impact studies of the industry, besides overlooking the trickle-down effect, also fail to take into account the residual payments that actors and screenwriters receive every time a movie, TV show or commercial in which they appear makes the air.
“I starred in a Robitussin commercial and got paid $900,” says Burvant, who is also an actor. “But over the following two years, I probably collected $20,000 in royalty checks. That’s something the studies don’t measure.”
Industry advocates say for every $1 spent on the industry in the state, more than $4.30 is generated in indirect spending.
SB 254 caps the basic tax credit per production at 25%, down from its current 30%. It provides an additional 5%, however, for filming outside of New Orleans, and an additional 10% credit for productions written by Louisiana screenwriters.
“Overall the goal of the program is to create companies that are creating content here in Louisiana,” says Jason Waggenspack, who heads the Ranch, a Chalmette film studio. “By creating the content, producing the content, and selling it then all that tax base stays in the state of Louisiana.”
—Stephanie Riegel
