NC's incentives for film industry make economic sense

April 6, 2014 

Yes, it would be wonderful if Hollywood movie makers would flock to North Carolina without the state having to play the incentives game. As it stands film production companies involved in movies, television and commercials get a 25 percent credit, up to a cap of $20 million, on productions that spend more than $250,000 in qualifying expenses.

Those who believe, and there are some on the General Assembly staff who fall into that category, that lawmakers should not extend the incentive program, cite disputes over numbers in a report on the program by an N.C. State University professor, Robert Handfield. Indeed, the report seems to make a strong case for the film industry incentives, and it was funded by the Motion Picture Association and local film commissions.

General Assembly staff say the report’s data is flawed.

But on the general question of whether the state should continue an incentives program, the answer is yes. Perhaps the formulas used to compensate production firms though credits need to be tweaked. And the state has to keep a close eye on the balance of income and outgo.

But this much is true: Absent incentives of some kind, North Carolina, which has spent several decades building its contacts with the film industry, will lose that business.

There is simply too much competition, and it’s close by and includes states with similar and even superior incentives for film production companies. The state of Georgia, for example, has seen its film industry explode in recent years.

South Carolina and Louisiana also are in the game.

North Carolina’s topography is spectacular, to be sure. But other Southern states have trees and beaches and great variations in weather, and yes, mansions and rural settings.

What North Carolina has that some other states do not is a pretty established film colony in Wilmington with sound stages and all the rest of it. There are several thousand accomplished film technicians and artistic contributors living in the state and ready to go to work.

Handfield reports the film industry spent more than $1 billion in the state between 2007 and 2012. The state paid out $112 million in tax credits. Those are plain, straight up numbers. And they add up, so to speak, to a good deal on the dollar for North Carolina.

It’s fine for those skeptical of the industry’s contributions to urge caution and restraint in the incentives program. Of course the state should not be in the business of recklessly handing over taxpayer money.

But the state also has enjoyed the benefits of production companies, some coming to small communities where the jobs realized were much welcome. The companies also have filmed in larger cities. “Bull Durham,” the 1988 hit baseball film, brought tremendous attention to that city and to the Durham Bulls, who became the most famous minor league team in the country.

Thom Mount, the Durham native and producer of “Bull Durham” who once headed worldwide production for Universal Studios, helped get North Carolina’s film industry going after consultation with then-Gov. Jim Hunt. Mount said then that a film company typically comes to town, hires lots of people, buys supplies from local merchants and then goes elsewhere. It is a “clean” industry, he said.

And the salaries paid by film companies, as Handfield noted, are considerably higher than average wages in North Carolina and elsewhere.

There’s also the intangible of having the state and its sites (beaches, mountains, Biltmore) in effect “promoted” by being the set of a film or television show. And yes, there’s the excitement for a community when a film crew and stars come to town.

Lawmakers can extend a form of incentives with little downside, and they can keep the cameras rolling.

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