Should Washington State Subsidize the Movie Industry?

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The movie-making business can be a lucrative industry. Money flows in from producers, theater-goers, advertisers, dvd/digital sales, and merchandising. An often overlooked source of money for the film industry, however, are state governments.

Tax incentives and expense reimbursements are what cash-strapped states offer Hollywood to get it to spend money and Washington is no different.

Washington filmmakers got a big boost from the state yesterday when the legislature voted to reinstate film subsidies for locally-sourced productions. Lots of states seduce the film industry, but Washington at least demands to be treated like a lady. The Film Credit Bill (SB 5539) would pay back 30 percent of production costs to any movie, but only those whose crews employ a large majority -- 85 percent -- of Washington workers .

Supporters have framed the bill as a boost for Washington jobs. During a recession, voting for jobs sounds like a no-brainer, and the legislative break-down reflected that reality. The bill passed 40-8 in the Senate and 92-6 in the House.

Chairman of the House Ways and Means Committee Ross Hunter was one of the few who opposed the bill. He argued that the subsidy was flawed in that many of the jobs created would be temporary and that the money could be better used elsewhere, like hiring more teachers instead of actors.

So do subsidies really get Hollywood to spend money in Washington?

The state film office, Washington Filmworks, which put forward the bill and has an obvious economic interest in saying "yes" says..."yes." Executive director Amy Lillard says that in the first five years that the subsidy was in place, 71 films employing 4,800 in-state employees generated a whopping $70 million in direct spending for the economy, numbers that are difficult, at best, to fact check.

That sounds like a good return on investment for the $3.5 million the state spent in the same time period. It's also a fraction of what other states offer to bring studios to town.

Nearly every state -- 39 in total -- currently has some type of legislative bait on the books, and the results have reportedly been mixed. Some states like Louisiana are courting studios with generous tax credits and claim to be turning a profit. Others like Michigan aren't as happy with the results.

"We're not seeing benefits of the subsidy," says Kurt Weiss of the Michigan budget office. "The jobs and economic activity were only temporary so the new administration has scaled way back."

The Film Credit Bill is now on the desk of Governor Christine Gregoire. A spokesperson tells the Weekly the governor has no stated position on tax subsidies for the film industry. She has 20 days to make her decision.

 
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