Benefits of film tax credit debated at legislative hearing
The benefit of extending Maryland’s film production tax credit were debated Tuesday as state lawmakers heard testimony from supporters of the credit.
“To turn our backs on all the efforts made by the General Assembly would be devastating,” said Hannah Byron, assistant secretary for Tourism, Film & the Arts of the Maryland Department of Business and Economic Development.
A report by the Department of Legislative Services found that the state is not receiving a sufficient return on its investment and recoups only 10 cents for every dollar handed out. The credit only provides temporary job positions for those working in film production, the report said..
“This is not temporary work,” said Michael Davis, a construction coordinator. “People go on to find jobs…there is no doubt in my mind that the extension would help Maryland development financially.”
Supporters of the state tax credit, now set at $25 million per year, rejected notions that the credit is not a legitimate investment and asked that it be extended three to five years.
“We don’t want to be the east Hollywood. We are being modest…We think the program is working…we are looking for sustainability and predictability,” said Byron.
A grant program, rather than a tax credit, was offered as suitable alternative but Byron called it “unpredictable.”
The business agency pointed out the tax credit’s assistance in creating local jobs and its contribution to revenue for local businesses.
Called ‘critical to student success’
Susan Picinich, dean of Fine Arts and Communications at Towson University, called extension of the credit, “critical to student success.”
Towson recently published a report outlining the tax credit as a positive contribution to Maryland state budget. The Towson report said the state is actually receiving $1.03 for every dollar it hands out, 10 times the rate of return legislative analysts found.
“This tax credit is a very unique way of creating economic development,” said Ryan Bishop with the Department of Legislative Services. It is “significantly more generous than other tax incentives.”
“At the end of the day, we are paying for a business to locate to the state,” Bishop said,
From fiscal 2012 to 2016, the state allocated $62.5 million for film production with $60.3 million of those budgeted dollars going to the popular “House of Cards” on Netflix and “Veep” on HBO.