Some 4,000 jobs in North Carolina, many of them in the Wilmington area, have been connected to the film industry, including movies, television and commercials. The state has been a location site for scores of Hollywood productions, from “Dirty Dancing” to “Bull Durham” to “Iron Man 3.”
The deal for film companies, in effect an incentives program, wasn’t bad: a tax rebate based on their spending. And that spending could be considerable, touching a variety of businesses selling filmmakers everything from batteries and tape, constructing sets or providing at-the-ready trained film crews that grew up to accommodate them. Big productions spending a lot on goods and labor in the state could get millions of dollars back.
All that may soon be in the past. Thanks to the end of the incentives program, North Carolina may lose the film industry altogether. Wilmington Mayor Bill Saffo, promoting a boost in the $10 million grant program that replaced the incentives, said film companies spent $170 million in his region last year; this year, it’ll be under $50 million.
Business is off
“We’ve only had three inquiries about production in this community in 2015,” he said. That compares with about 15 this time last year.
This state has welcomed the film industry for 30 years now, and it got more aggressive with incentives as competition from other states and from foreign countries (Canada, for one) has grown. In the course of that growth, disputes have arisen over whether the incentives in the form of rebates have been wise.
Does the state come out ahead when comparing what the companies spend with what the state returns? One study, funded by the Motion Picture Association, by an N.C. State University professor found the financial return to the state more than covered the incentives given. But some on the legislative staff argued that the return on investment was not anywhere near what the study claimed.
However, it’s true that there is a broader financial benefit from having film production in a state, and in North Carolina that has been several thousand virtually year-round jobs and spending that might not be considered direct benefits but are benefits. Those would be things like meals purchased by film company workers even when films weren’t in production or tourism spurred by an attractive area portrayed on film.
And make no mistake. Other states think incentives are well worth it. The Wall Street Journal reports that in Georgia, a state that has ramped up its incentives program, the film industry is looking for more and more workers. In fact, some in the industry are worried that there are more jobs than people to fill them.
The state’s Republican Gov. Nathan Deal even thinks it would be a good idea for Georgia to start its own film academy, with the help of public universities and technical colleges.
Those types of institutions already are creating new curricula related to film-making.
North Carolina Republicans in the General Assembly who advocated the end to the state’s incentives program, perhaps not coincidentally because it had been supported by Democratic governors, claimed they didn’t like the idea that some companies were in effect being paid to do business in the state.
Many want film
That sounds good, but the film industry isn’t just any manufacturer. It has many suitors, evidenced by the activity in Georgia and other neighboring states. Contrary to what some GOP lawmakers may want to believe, the industry isn’t going to come to North Carolina for a relatively tiny incentive of a grant from that $10 million fund, for which filmmakers have to apply.
Why would they? Georgia and South Carolina and Virginia have mountains and beaches and incentives. This is a mobile industry with plenty of money to spend, a clean industry that moves in, spends money and moves on.
If there were any doubt that incentives are a necessity, if a reluctant one, consider that California, the home of Hollywood, now has a $330 million incentives program in place.
Yes, North Carolina lawmakers now are being lobbied by the industry and those areas that benefit from it to enlarge the grant program, but they should return immediately to the incentives program as it existed. Otherwise, the industry will call a wrap to all productions in the state, and it won’t take long.