Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
Film industry boosters urged state lawmakers on Tuesday to refrain from shouting "cut" when it comes to a tax credit program targeted for elimination in Missouri.
The $4.5 million annual program is among $220 million worth of incentives proposed for elimination by the state's Tax Credit Review Commission. The panel was created by Gov. Jay Nixon to find ways to reduce Missouri's array of income tax credits.
Members of the Missouri Motion Media Association said the commission underestimated the economic benefit of the state's film industry. They pointed to the recent success of Oscar-hopeful "Winter's Bone," which was filmed in southwest Missouri, and the George Clooney movie "Up in the Air," filmed in St. Louis.
"Without the state tax credits, we will have no film industry in Missouri," said Shawn McClaren, a Hallmark film producer based in Kansas City who travels internationally to oversee the greeting card company's family-friendly movies.
The tax credit commission recommended that the film industry's share be redirected to a new tax credit program that would encourage "angel" investments in early-stage, technology-based Missouri companies.
"This tax credit serves too narrow of an industry and fails to provide a positive return on investment to the state," the commission concluded last week. "There is currently no long-term opportunity for the location of production facilities for films in Missouri. Accordingly, the commission recommends that the credit be eliminated during the 2011 legislative session."
Those recommendations will be considered by Missouri lawmakers in the upcoming legislative session.
Missouri was among the first states to offer tax credits to the movie industry, but its incentive program was quickly eclipsed but other states such as Louisiana and New Mexico that offer either higher caps on tax credits or have no limits at all.
Jerry Jones, who directs the state's film commission, said Missouri ranks 32nd among the 42 states that offer credits in terms of available fiscal relief. The state caps payments at $1.5 million per project -- an amount that can be easily gobbled up by a single big-budget studio production.
The state panel relied on an economic impact formula that suggested a return of just pennies on the dollar, Jones said. That formula failed to take into account the transitory nature of film industry jobs. Unlike factory or high-tech workers, film production workers typically cobble together work from multiple bosses, he said.
"It's not an exact science," Jones said. "We haven't found a true way to estimate the economic impact of film. It's an industry that's very mobile, (where employees) don't work for the same employer year-round."
Sen. Kurt Schaefer, a Columbia Republican and a board member of the statewide industry group, opposes elimination of film industry tax credits.
"At a time when we're not only losing the jobs we have here but are also not attracting any new ones, it's a dangerous proposition to take off the table economic incentives that we know work," he said. "The message we're sending is that we're not going to be competitive with other states."
Missouri has 61 tax credit programs that last year waived $521 million in state income taxes, including $140 million set aside annually to renovate historic buildings.