During Q-and-A with director Ti West at last month’s Cucalorus Film Festival in Wilmington, a fan asked why he chose to make his latest movie, “The Sacrament,” in Savannah, Ga. And his answer was pretty simple.
“Filmmaking is on sale in Savannah, Georgia,” West said. “Like it is here.”
The horror-film notable was referring to the cost breaks the states are affording film productions as competition continues for their investments and jobs. As North Carolina’s film-incentive package burns toward expiration, N.C. Secretary of Commerce Sharon Decker says she’s “committed” to keeping the state on the industry’s good side, and that goals include extending or modifying the current tax credit offered to productions to remain competitive against neighbors like Georgia.
N.C. Secretary of Commerce Sharon Decker. Photo by Ben Brown.
“We want the film industry to grow in the state and we’re committed to figuring out how best to facilitate that,” Decker told reporters during a visit to Wilmington on Monday.
She said Wilmington is the “clearly the hub of this industry in North Carolina,” but it spreads statewide. And when a film makes a mark on its location, it pays off for years and years, she said.
“I’m from Rutherford County, and ‘Dirty Dancing’ is what brings people there every year, and ‘Last of the Mohicans.’ After all these years, it still matters,” said Decker. “So I have a particular sensitivity to it, because it has been important to that economy.”
In a policy expanded in 2009–and scheduled to expire at the end of 2014–North Carolina gives film production companies that spend $250,000 or more 25 percent breaks for expenses on taxable materials and for the compensations of employees up to $1 million. The limit is $20 million for a single film and is boasted by supporters as a great enticement relative to perks offered in other states.
(For comparison, Georgia offers an up-to-30 percent transferable tax credit for productions that log a minimum $500,000 in qualified expenditures. There’s no cap on the compensations; there’s no cap on how much an individual production can rack up in credits. It’s also without a sunset clause.)
North Carolina wrote down a record return in 2012, according to the N.C. Film Office, a division of the N.C. Department of Commerce. A report it issued over the summer said direct in-state spending from filming that year totaled around $376 million, and that the industry brought 20,000 “job opportunities.”
On the website of the Wilmington Regional Film Commission are lists of productions just completed or in progress in the Cape Fear. Under “Recently Wrapped” are comedy feature “The Squeeze,” Hallmark feelgood “Christmas In Conway,” HBO’s “Eastbound & Down” series, and CBS’s hit sci-fi drama, “Under the Dome.”
The N.C. Film Office also lists an independent feature called “Fragile” as in production in the Charlotte area. (Click here for a list of productions that have wrapped in North Carolina in the last 18 months.)
But, barring intervention, the film incentive package that officials thank for the business is entering its final year, and predictions are it will be a standout topic for lawmakers when the N.C. General Assembly regroups in May.
Asked to respond to a popular argument legislators hear against film incentives–that it’s an unfair scheme blessing one industry and letting others fend for themselves–Decker on Monday called it a “tough” case and made mention of the broader tax system changes the state rendered last year with business in mind.
Corporate and personal income tax rates are dropping in a goal to improve the climate for industrial growth and recruitment. Decker said it’s “probably the single most impactful thing to kind of help all businesses” versus one.
But she said the “challenge”–and one that film-incentive disapprover Rep. Rick Catlin (R-New Hanover) has mentioned at past talks–is that the tax reform was designed to let existing incentives sunset.
“Because that’s where the money comes from, right?” Decker said. “And so it’s a balancing act that we’re in. It’s a real challenge.”
She also noted the film industry wouldn’t be a big beneficiary of falling income tax rates because it doesn’t reside here full time. Decker said ideally that can change with the right structure and atmosphere, and that simply focusing on temporary incentives may be a restrictive mentality.
“The question is, do we want the film industry to grow in North Carolina? And if the answer to that is yes–and I think that it is–then how do we best do that?”