Under the Dome

May 15, 2014

Republican leaders appear willing to let NC film incentives expire

The question of whether to extend North Carolina's film incentives is putting U.S. Senate candidate Thom Tillis and Gov. Pat McCrory in a tough spot.

The question of whether to extend the state’s film incentives is putting U.S. Senate candidate Thom Tillis and Gov. Pat McCrory in a tough spot.

Both GOP leaders have expressed support for the program that gives tax breaks to film companies to lure productions to the state. But now – amid a tight budget year and broader concerns about incentives – Tillis and McCrory appear willing to let it expire at the end of the year.

Under the current program, TV and film production companies receive a 25 percent refund on in-state spending up to $20 million. The industry says it lures major investments and films, particularly to the Wilmington and Charlotte areas.

House Republican leaders made clear Wednesday they don’t support the current program. “What we have right now is not acceptable to the body,” said Rep. Julia Howard, the House Finance Committee chairwoman.

Tillis said he would “defer to the leaders who have looked at it more closely” but left open the door for a different program.

“We’re for things that create jobs and accrue a benefit to all taxpayers,” he said. “What we need to do is see if we can come up with a framework that fits those parameters. I’m wide open to that and hopefully we’ll make progress before the end of the short session.”

Tillis is considered a “champion” of the tax credits by some and in September, he told a Wilmington TV station he thought the program would be extended.

McCrory said his recommended budget would propose revisions to the state’s film incentives program, but there were few details in the budget proposal lawmakers received Wednesday. In his campaign, McCrory supported the program but expressed a need for restructuring.

Ryan Tronovitch, a McCrory spokesman, said the governor’s plan for film incentives would be included in the budget special provisions, which will be released in about a week.

McCrory said only that his proposal would encourage long-term capital investments in infrastructure, such as film studios, while discouraging “short-term projects with short-term returns.”

He specifically mentioned “The Daily Show with Jon Stewart,” which claimed about $273,000 back in spending credits after filming shows in North Carolina for a few days during the Democratic National Convention in 2012. “That was money right out of our budget that we could have given to teachers,” McCrory said during a news conference unveiling his budget.

He said he believed his plan would benefit the film industry and save tax dollars spent on the incentives while focusing on creating jobs.

The state Senate has expressed skepticism of the current film incentives, too. Senate leader Phil Berget told the Wilmington Star-News it “lacks safeguards that protect taxpayers’ interests and fails to provide the accountability North Carolinians expect from our job incentives programs.”

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