Point of View

NC needs to keep film credits rolling

July 13, 2014 

The first time I visited North Carolina was thanks to the film industry. This was in 1986, and I had been assigned by the Los Angeles Times to write a set story about a new King Kong movie, “King Kong Lives,” which was shooting at a studio recently built by producer Dino de Laurentiis in Wilmington.

So I flew into what I thought was the end of the earth and was truly astonished by the bustling studio, which was then home to two productions (the other was a film called “Trick or Treat,” featuring Ozzy Osbourne and Gene Simmons). I was impressed with the professionalism of the crews and the laid-back ambiance of the area.

Over the years, as I worked as a film industry reporter for newspapers in Los Angeles and New York, I kept tabs on the success of the North Carolina film industry, which was becoming a major player in the business – home to all sorts of films (“Iron Man 3,” “The Hunger Games”) and TV shows (“Homeland,” “Dawson’s Creek,” “Under the Dome”). And I interviewed dozens of actors, producers and directors who had worked here, all of whom told me how much they enjoyed the hospitality and friendliness of the natives and the work ethic of the locally based crews.

That was then. This is now.

For some reason, many current lawmakers seem to think there needs to be massive changes in the incentives that help attract film and TV productions to the state. If successful, they will guarantee that North Carolina will soon become a film industry afterthought.

The state’s film incentive program kicks back up to $20 million in tax refunds, based on how much money a production spends in North Carolina. Critics claim this is just a big giveaway to large productions. Proponents say the incentive helps attract productions and supports hundreds of jobs throughout the state. Unless it’s renewed, the incentive is due to be phased out at the end of the year. And already the state Department of Commerce has closed down the Film Office, which will be transferred to a new nonprofit entity that will handle the state’s marketing and job recruitment.

What will replace the tax incentive? One plan is to use grants, which would cut state spending to promote films from last year’s $61 million to $20 million. And Gov. Pat McCrory has suggested tying production credits to how much a film company pays in income taxes.

But here’s the thing. Between 2012 and today, film productions have spent over $900 million in the state. Even if the 25 percent tax credit were taken out of this amount (and not all productions are eligible for the credit), you still end up with a very large chunk of change spread around North Carolina. And that figure looks even better when you realize, according to the North Carolina Film Alliance, that in the states that transitioned from a tax credit to a grant program, film business has fallen.

And here’s what the state’s legislators really don’t understand. Once upon a time, three cities – New York, Los Angeles and Toronto – accounted for a major percentage of film production, with the occasional outlier getting some work. But the business has become much more competitive – North Carolina now competes with more than 40 states and 30 countries that offer tax incentives. And the states that have upped their tax credit rate – particularly South Carolina, Georgia and Louisiana – are attracting tons of productions.

So it doesn’t just make good economic sense to keep the tax incentives and an aggressive film office. It also creates great PR for North Carolina. Films and TV shows like “The Hunger Games” and “Dawson’s Creek” attract thousands of visitors to the state, all of them excited to see the locations where their favorite scenes were shot.

Film production is glamorous and nonpolluting. It has a trickle-down economic effect that pumps money into local hotels, restaurants, clothing stores and numerous other businesses. But if the tax incentive is eliminated, I can guarantee that we will be thrust into a noncompetitive position when it comes to attracting film production. And after a nearly 30-year run as a very popular production location, North Carolina will become a film industry backwater.

Like any industry, Hollywood goes where it can cut the best deal. And film crews go where they can make a living. Is this what the legislature wants? To destroy a vibrant business? It sure seems that way.

Lewis Beale of Raleigh has been the film industry reporter for the New York Daily News and Los Angeles Daily News. He has also written for the New York Times and Los Angeles Times and reviews films for The News & Observer.

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