People who make their living from the film industry are nervously waiting to see whether the N.C. Legislature will extend tax incentives that helped revive the industry in North Carolina.
If, as a preliminary study by N.C. State University indicates, state and local governments take in $1.50 for every incentive dollar spent, lawmakers would be foolish not to continue to offer some type of enticement.
The film industry is a different breed, and some of its benefits are difficult to pin down. The full study, which was commissioned by and for the state’s film industry, could paint a fuller picture of the impact of film incentives on the state’s economy and tax revenues.
What is clear is that the state has seen a resurgence in film and television productions since the General Assembly increased incentives to 25 percent.
Much of the debate over incentives involves questions of whether they pay for themselves or merely fatten the bank accounts of Hollywood producers who shop their productions to find the state willing to make the largest financial offering. It is a question that deserves a comprehensive answer.
There are conflicting conclusions. Just last year, the N.C. Commerce Department did a study that said the state lost $62 million in tax revenue and which questioned the extent of some of the ancillary benefits, such as tourism. But most studies to date have not had a good handle on the impact beyond direct spending and direct tax revenue, nor have they helped answer another pressing question: whether North Carolina is just the film industry’s latest favorite, soon to be replaced by another state that offers greater incentives, or if it is a permanent fixture.
“Firestarter,” the 1984 movie based on Stephen King’s novel, was made in Wilmington. From that production grew an entire industry, including a working film studio in Wilmington, a permanent crew base in the area and film-related programs at the University of North Carolina Wilmington and Cape Fear Community College.
In addition, productions such as the recent blockbuster “Iron Man 3,” Southeastern North Carolina has been the location for several TV series that keep a cast and crew busy for six to nine months a year. State and local film office officials see those productions as a key in keeping North Carolina’s film industry thriving.
When productions spend money, those dollars circulate in the economy; the N.C. State study should be able to demonstrate that indirect financial impact.
As fiscal belts tighten and needs grow, some states have eliminated the film incentive. But as long as our chief competitors embrace incentives, North Carolina will need to use every tool in its arsenal to get and keep film jobs.
A version of this editorial first appeared in the Wilmington Star-News, a Halifax Media Group newspaper.