Should We Care That Washington State Has Killed Tax Breaks for Film Production?

It's not news that these are difficult and lean times for our state government. In the past week, there have been massive cuts to education and health care, implementation of parking fees (topped with parking-pass processing fees) at state parks, silenced Washington state tourism promoters, and, in yet another sign of the times, the elimination of tax incentives for in-state film production.

The other stuff we get, and none of it is good, but tax breaks for film production? How much of a bummer was it to lose those?

In short, not such a huge bummer. The $3.5 million annual incentive program offered film production companies coming here a 30 percent rebate on the money they spent in the state. This meant that every time people on these productions would eat a $10 sandwich for lunch, they'd pay $7, with the rest of us (through redirected tax revenue) kicking in the remaining $3. The idea was that the $7 they spent on that sandwich, which would otherwise have been spent on lunch in Oregon or Vancouver, would spur the restauranteur to hire another server, refinish his deck, or otherwise grow the state's economy.

Because the program was capped at $3.5 million per year, however, it was never going to lure the biggest projects. Twilight, for instance, was shot mainly in Oregon, which offers a 20 percent rebate on goods and services and an unlimited 16 percent refund for labor costs, while subsequent films in that series were shot mainly in and around Vancouver, which offered even more favorable terms.*

Instead, Washington Filmworks, which has managed the state's incentive program since its inception in 2005, has gone for mostly smaller projects such as The Details, and, as the economy has struggled, has targeted TV commercials, which were the primary beneficiaries of the program last year.

Amy Lillard, executive director of Washington Filmworks, points out that the money going into the program has helped attract production companies to the state, thereby bringing relatively well-paid jobs to skilled professionals. "The unfortunate reality of the situation is you need these [incentives] to be part of the discussion," Lillard says. "That is the way the business of film works at this point."

Lillard says that Washington Filmworks had already raised $3.5 million for the coming year before the bill extending its funding stream died in the legislature, ensuring its survival for at least the next year. Moreover, she vows that she and her allies will be back before the legislature next year to argue that the program be revived.

It's hard to argue that more jobs, even temporary ones, are a bad thing. But whether Washington ought to reinsert itself into a system that encourages venue-shopping producers to extract the most advantageous terms possible from state governments by pitting them against each other is another matter. It may be how things work these days, but if more of the 40-odd states with such race-to-the-bottom tax incentives follow Washington's lead, maybe it won't be forever.

*CORRECTION: We initially wrote that the first two Twilight films were shot in Oregon.

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