A proposal to extend the state’s film incentives at a lower rate divided House Republican leaders Wednesday as an attempt to preserve them for two more years failed in a committee.
Wilmington Republican Rep. Ted Davis authored an amendment to the state budget to extend the tax breaks for movie and television production companies to 2017, reducing the cap on payouts to $15 million from $20 million and lowering the tax break from 25 percent to 22.5 percent.
Davis said the provision would keep the state as a top-tier place to film and help the state’s economy. Wilmington and Charlotte have become hubs for the industry.
“We likely won't see any more blockbuster films made in North Carolina but we can ensure the (future) of a film industry,” he said. Without the industry, he said the film workers “will either take their families and leave or they will stay and be on unemployment and Medicaid.”
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The measure sparked a tense debate in the House Finance Committee as Republican leaders huddled about whether to kill it without a vote. It eventually failed on a 16-20 vote that split House GOP leaders but earned support from the Democrats on the committee.
Rep. Susi Hamilton, a Wilmington Democrat, said it will appeal to TV productions, which generally are longer-term jobs than a major motion picture.
But Rep. Mike Hager, a Rutherford Republican and House GOP whip, argued against the tax incentives saying the higher priority was teacher pay hikes and education. “Are we going to spend it on film tax credits or are we going to spend it on the most important thing, education?” he asked. “I want to put this money back in the classroom and pay teachers a little more.”
Davis warned that if the film incentives issues doesn’t make it into the House budget – it’s not in the Senate proposal – that it is dead for the year. He said a separate Senate bill to make the film incentives a smaller grant program a nonstarter. “You might as well just kill the film industry,” he said.