NC’s film incentives are worth it

April 29, 2014 

There will be members of the General Assembly who will argue in the upcoming “short” session that tax credit incentives for the film industry are wrong. Why, they’ll ask, should the state offer incentives for motion picture companies, television producers and makers of commercials? It costs the state too much money, they’ll say. And if the great state of North Carolina is a perfect setting for everything from “Iron Man” movies to soap commercials, producers will come to North Carolina anyway.

Don’t bet on it. Neighboring states are in the film business through incentives, and they’d be happy to go to producers and say, “North Carolina won’t give you tax credits or other incentives? Well, come on to us and we’ll be happy to help.” And the business would be gone. It’s that simple.

Producers can find mountains and beaches in many other states willing to play the incentive game. They’re business people. Though they might prefer the Outer Banks for a certain scene, they can make do with a South Carolina or Virginia beach if they have good reasons, say hundreds of thousands of dollars, for going elsewhere.

How spending stacks up

The industry has claimed $170 million in credits since 2005, based on $824 million in spending. How is that not a good deal for North Carolina? Yes, it would be better for the state to have its $170 million, but would it be better not to have that $824 million spent?

Because that is likely the choice lawmakers will have when they come to town and decide whether to extend the film industry tax credit incentive program.

Film companies have a tremendous impact on local economies, and in many cases their locations are not in the state’s major cities and are in places where the local hardware store could use an order for a few dozen boxes of batteries or the corner bakery wouldn’t mind at all creating, say, 10 cakes for one shot in a movie.

In addition, on those locations, local carpenters will be hired to build the set designs movies require. Doctors might be called in to tend to crew and cast. And folks walking down the street might find themselves pulled aside by assistant directors to appear as extras, walking away with a few extra dollars.

And “these movie people,” as they’ve been called by some of the locals in small towns where films and television shows have been shot, typically don’t negotiate prices. They order their merchandise and write a check for it.

Positive exposure

But then there are the cultural benefits of having the state, from “Bull Durham” to “Dirty Dancing” to “Nights in Rodanthe” to “Being There,” gain favorable exposure literally around the world. That promotion offers value both tangible and intangible.

It now appears some lawmakers and others who oppose these incentives are considering a compromise that falls short of abolishing the incentive program altogether. They’d eliminate reality shows, for example, from being eligible for incentives. Even though that doesn’t seem entirely fair, it is hard to argue for using incentives to preserve some of the realityshows that pass for entertainment. North Carolinians probably wouldn’t want to be credited with helping to keep folks like those Kardashians on the air, after all.

Overall, however, the film industry’s incentive program has been a boost to many economies in many parts of North Carolina. And when the income is counted against the expense, the state seems to come out far ahead. The plot in the story of incentives seems to keep the attention of citizens while providing, financially speaking, an all-around happy ending for the state of North Carolina.

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