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City, county to Gov. McCrory: ‘Reconvene the legislature’ to resolve film credit

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Wilmington Mayor Bill Saffo, left, joined New Hanover County Commission Chairman Woody White in calling for Gov.  Pat McCrory to call a special session of the General Assembly to resolve the state's film credit program, which is slated to significantly lessen next year. Photo by Jonathan Spiers.

Wilmington Mayor Bill Saffo, left, joined New Hanover County Commission Chairman Woody White in calling for Gov. Pat McCrory to call a special session of the General Assembly to resolve the state’s film credit program, which is slated to significantly lessen next year. Photo by Jonathan Spiers.

City of Wilmington and New Hanover County officials are formally asking Gov. Pat McCrory to reconvene the North Carolina General Assembly to resolve the issue of the state’s film credit, which otherwise is set to be significantly reduced next year.

At a joint meeting Tuesday to prioritize economic strategies for the area, Wilmington City Council and New Hanover commissioners agreed to have a letter sent to McCrory requesting a special session of the state legislature, which adjourned last week after approving a budget that includes a modified credit with an overall cap of $10 million for all productions in the state for the first six months of 2015.

That credit, structured as a grant fund program, is significantly lower than the credits the state has awarded to productions under the current program, which allows a 25 percent refundable tax credit for productions that spend at least $250,000. Thus far this year, the state has seen an estimated $268 million in direct in-state spending by productions; 25 percent of that would come out to about $67 million.

Related story: Budget includes $10 film grant program

At Tuesday’s meeting, New Hanover Chairman Woody White said the legislature’s approval of the reduced program effectively kills an industry that has been in the state for three decades. He said the only course of action left to save the industry is for McCrory to call the legislature back to Raleigh.

“There’s only one remedy: that’s the governor calls a special session,” he said. “So I think the message, clearly, from our board is to pass a resolution in support of the industry.”

White said he had spoken recently with Johnny Griffin, director of the Wilmington Regional Film Commission, who he said mentioned productions that are currently looking at filming in the state that are now reconsidering due to the change and uncertainty in the credit.

Wilmington Mayor Bill Saffo, who has been vocal on the issue and has asked for a one-year extension of the current incentive to help resolve the matter, agreed with White’s suggestion.

“I think what we heard from the chairman is right on the spot: we need to ask the governor to reconvene the legislature. That’s the only way forward,” Saffo said.

County Commissioner Beth Dawson, who serves with Saffo on the regional film commission’s board of directors, said she understood the commission was preparing a similar letter calling community members to action. White said such a call could carry additional weight with a request from four county commissioners and seven city council members.

Referring to his conversation with Griffin, White said: “It’s upsetting to hear him talk about it. It’s upsetting to hear him put it in terms of families that are packing their bags right now in our community and leaving in anticipation of the end of times. And it’s dire. And that message has not been effectively communicated, for whatever reason, to the governor’s office.

“I know the governor supports it; he’s one branch of government. The legislature does not,” White said, adding that the governor could only call legislators back to Raleigh to decide whether their intention was truly to negatively affect an established industry.

White said Griffin acknowledged other communities in the state where filming is frequent have not rallied as much on the issue as Wilmington has, making the issue look to legislators like an area-specific—not statewide—issue.

“He will tell you: They have industry in Greensboro, Charlotte; those communities really are not galvanized behind it,” White said. “They’ve got plenty of jobs. Charlotte has such a diverse economy that it’s not as big of a deal to them. This is a big deal to Wilmington, and it’s seen as a Wilmington issue—wrongly, but that’s the perception.”

White asked that a letter be drafted today and sent to the governor’s office requesting the special session, with the goal of having legislators state their stance on “whether or not they want to kill an industry that’s been here for three decades, because that’s what it looks like they want to do,” he said.

Related stories:

Jonathan Spiers is a reporter for Port City Daily. He can be reached at (910) 772-6313 or jonathan.s@portcitydaily.com. On Twitter: @jrspiers

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Posted by on August 26, 2014. Filed under Film,Local News,New Hanover County,Wilmington. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

15 Responses to City, county to Gov. McCrory: ‘Reconvene the legislature’ to resolve film credit

  1. Bill Reply

    August 26, 2014 at 7:18 pm

    Why should this industry get a break and all others not? Taxes are exactly what the Democrats caused them to be over the last 100 years. The film industry is full of Democrats so let them pay the piper the way they have forced everyone else to pay.

    • Josh Reply

      August 27, 2014 at 11:16 am

      Bill, this is not a matter of democrats or republicans. This is a matter of facts. Last year the film industry spent over $250 million dollars on in-state spending of which the film productions received %25 percent of back. Let’s do the math here. What’s %25 percent of $250 million? Like $62 million dollars or so lol. So let’s subtract $62 million from $250 million….that’s like $188 million dollars that stayed IN NORTH CAROLINA!! This is not a matter of two political parties. This is a matter of again, FACTS!! THE STATE MAKES MONEY WITH THE FILM INDUSTRY. The only people who DON’T make money is the politicians lol. So, by abusing their power and making third-party deals with booming film states like GA, they will make a huge profit that will go right into their pocket. Should i talk next about The Education Lottery?? Where that money goes perhaps? To schools and teachers right? HA, not a chance. Look up the article on the Nc Education lottery and you will see that there has actually been a decrease in teacher pay and many school issues that have not been addressed that the NC lottery money should help with. Bill, i’ll await your rebuttal!!

      • Bill Reply

        August 27, 2014 at 2:37 pm

        Josh, the last time I checked, the film industry was making lots of money. The actors/1%ers were still buying mansions and the other 1%ers at the studios were still driving limos. On the other hand, manufacturers in this state are still shutting their doors and small businesses are still squeezing every dollar to pay the employees and bills that keep going higher and higher. Burger King is changing corp. addresses with the help of that big lib hero Warren Buffett or as I like to call him, the biggest 1%er! Can’t cha just smell the hypocrisy here? Does it really have to bite cha before you will admit it?

      • Vog46 Reply

        August 30, 2014 at 10:09 am

        a few comments.
        Film company’s don’t pay corporate taxes.
        http://www.ncfilm.com/new-25-tax-credit.html
        “HB 713:

        Eliminates the 6.9% corporate income tax on the tax credit taken by a production company. This allows the production company to realize a full 25% of qualifying expenses”

        Second, the tax credit is based upon qualified EXPENSES, not taxes paid:

        From NC GS 105.130.47
        “that is a production company and has qualifying expenses of at
        least two hundred fifty thousand dollars ($250,000) with respect to a production is allowed a credit against the taxes imposed by this Part equal to fifteen percent (15%) twenty-five percent (25%) of the production company’s qualifying expenses…..”

        Third- based upon the above laws from both the Legislature and your own film office you need to re-think your scenario.

        A film company SPENDS $100 here. At 5% taxed rate that means that all wages and sales taxes for goods and services are taxed – therefore the STATE collects $5 of that $100 SPENT. The STATE then refunds 25% of those expenditures to that film company that pays no corporate tax, or $25! It goes FAR beyond a rebate.
        So they pay BACK the taxes collected ($5) where does the OTHER $20 come from? Yep from ALL taxpayer taxes collected.
        Now that $75 does NOT stay here. Lets say they spent ALL of that $75 at Home Depot for set building supplies. Home Depot has to pay their suppliers etc. So Home Depot essentially profits at %4. Those profits go back to HD headquarters.
        The same holds true for local spending at enterprise car rentals etc.
        The question is how badly will the local economy be affected by a film exodus. Losing the revenues generated by filming may affect a very small number of local businesses because very few businesses rely SOLELY on filming. Will Hell’s Kitchen close? No hardly. HOme Depot won’t either.

        Finally you need to realize something else:
        Repeat – film company’s don;t pay corporate taxes.
        Second, when Jim Hunt talked to NH County commissioners they struck a “deal” whereby Dino got the land for the studio for $1 – yep $1. It was formerly the NH County landfill. It is considered “brownfield” or contaminated land. This type of land parcel is not normally taxes (Just like PPD’s land).
        So, you have temporary company’s coming here, NOT paying corporate taxes, using a film studio that is not taxed to it’s full value as the land is brownfield land, THEN they get a 25% refund of operating EXPENSES – all for about 1000 people locally – if that?
        When you think about the total working population this is insignificant. When you think about film spending when NC’s economic output is $15T per year then film spending statewide is insignificant as well.
        Yet, they act as though the state will go into recession should filming stop. As my post title says “Oh brother…..”
        Learn, read, and think about your position……

        Vog

    • Realistrick Reply

      August 27, 2014 at 2:29 pm

      let the film industry pay their fair share like everyone else. Is it not time the Hollywood billionaires give back? They have been given so much by so many.

  2. Richard Heiser Reply

    August 27, 2014 at 7:57 am

    As I have said, take the word film out and change it to business and the incentive would be looked at in a whole different light. Of course, incentives for business are not necessarily a bad thing but then it is a free market and competition is open so it seems we will have a lot of folks relocating to Georgia.

  3. Clint Reply

    August 27, 2014 at 11:13 am

    I think Bill is spot on. If we had lower taxes for all businesses, we would be much better off. Why the film industry and all the Hollywood liberals in this industry think they are special is beyond me. These are the same ones who complain and criticize all things Republican and now they want some special favors from them for their industry.

  4. kodiak Reply

    August 27, 2014 at 1:47 pm

    NO! NO! NO! enough give a way to film money makers.

  5. doc Reply

    August 27, 2014 at 2:29 pm

    one side sites fact without political assoc and the other just tries to belittle what they don’t agree with.to seem rather than to be new SENC motto

  6. Dave Reply

    August 27, 2014 at 3:45 pm

    The film incentives issue is “resolved”… it was voted DOWN. I hope Gov. McCrory doesn’t force the legislators back to a special session merely because some crony corporatists didn’t get what they want.

  7. Triadwatch Reply

    August 27, 2014 at 4:15 pm

    Give the filmmakers the incentive on front end to have the taxpayers get the incentive back in regards to a percentage of gate receipts at the box office when movie comes to fruition. Sounds like a plan to me .

  8. Jeff Reply

    August 29, 2014 at 12:14 am

    Hey Bill, this isn’t about the 1%ers, it’s about the crew members and people who will be losing their jobs.

    • Bill Reply

      August 29, 2014 at 1:48 pm

      Dems/Libs can’t stand it when the 1%ers in other Industries receive “Corporate Welfare” or “tax breaks”. The film industry is chocked full of Dems/Libs. Why is it different or OK for them to receive Corporate Welfare? Don’t the other Corporations have “crew” and “people” too? Can you spell HYPOCRITE? The Republicans are not buying the propaganda about how profitable this Industry is. I support them because I have seen the numbers and they are not what the film industry would have us believe.

      • M Reply

        September 5, 2014 at 4:01 pm

        Bill,
        In conservative terms, film companies are production companies trying to meet a bottom-line. They employ financial analysts to assess the least-cost, highest revenue options. If GA provides a better break than NC, then the Finance director will report that to the corporation and that spending will be done in GA, not NC. It’s a matter of competitive advantage, and our legislature is handing ours to other states, by crippling the tax incentives for production companies who find it optimal to film in NC.

        Making entertainment as a product, can be a very risky proposition. The market is very competitive, and many pilot programs fail. The economic incentives keep the Finance directors of these production companies interested in the regions that provide them. There is no democrat or republican slant in this argument, only an erosion of a regional economy-boosting industry by short-sighted budget-hacking.

        Production employees who spend money in NC business and support the local economy and tax base will ultimately take their taxes and pay them in other states.

  9. Vog46 Reply

    September 7, 2014 at 9:59 pm

    M-
    You said:
    “The economic incentives keep the Finance directors of these production companies interested in the regions that provide them. There is no democrat or republican slant in this argument, only an erosion of a regional economy-boosting industry by short-sighted budget-hacking.”

    IF that is true then filming will leave NC because of A’s tripling of their incentive, GA’s ongoing incentive and the possibility that NY will re-vamp their program to compete with CA’s program.
    I dislike all incentives especially targeted incentives to a particular business or industry. It is easily abused by those handing them out. (Interesting that NOBODY is questioning Sen Bill “Rabies” Rabon’s comment that our incentive program was abused). Imagine a DEM governor handing incentives out? It WILL happen someday. I think we can see the issue here.
    film incentives and targeted incentives in general do NOT drive economic activity – ALL INDEPENDENT studies say this.
    NC just can’t win against states like CA and NY – nor should they pay to play. Doing is just because other states do it is spending money foolishly. I think NC pulled out of this race at just the RIGHT time. The escalation by CA is just the beginning
    Vog

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