Washington Post

Maryland Lawmakers Consider Yelling “Cut” on Film Tax Credits (December 2, 2014)

https://www.washingtonpost.com/local/md-politics/maryland-lawmakers-consider-yelling-cut-on-film-tax-credits/2014/12/02/110ce8f4-7a40-11e4-84d4-7c896b90abdc_story.html
By Jenna Johnson
December 2 at 8:07 PM

The panel of analysts spent more than an hour Tuesday afternoon explaining why Maryland should stop giving millions of dollars to movie and television productions that choose to film in the state.

The few thousand jobs created by this small industry are temporary, they said, summarizing an exhaustive report by the state’s department of legislative services, and the benefits are short-lived.

● Maryland has given or promised more than $62 million in tax credits to producers since 2012, they said, which means that the state is essentially paying $14,000 for each job created — much more than is spent on other job-creating tax credits, including those targeting biotech and cybersecurity jobs.

Plus, 98 percent of the film-incentive money has gone to the production of two major shows: HBO’s “Veep” ($22.7 million) and Netflix’s “House of Cards” ($37.6 million).

So this was their pitch to a handful of legislators at a public hearing in Annapolis: When the film tax-credit program sunsets in July 2016, lawmakers should do nothing to save it.

Then came a series of industry insiders who argued to keep the film tax credit. They criticized the analysts — they don’t understand how the industry works, the insiders said, and said they’re not calculating the indirect effect of having a major production in town.

Again, they had examples: A Frederick County winery saw a 25 percent jump in tastings ever since a bottle of their wine was featured on “House of Cards.” A Baltimore lumber company built a new warehouse and added five positions, thanks to major sales to the show. And local college students were hired on sets and enjoyed visits of big-name directors and producers to their classes.

“We have a modest program,” said Hannah Byron, an assistant secretary at the Department of Business and Economic Development who focuses on tourism, film and the arts. “We’re not looking to be Hollywood of the East. We’re not looking to be California or New York. We’re looking to just keep the infrastructure and keep the jobs and keep what we have.”

During the three-hour hearing, the lawmakers listened and asked questions, but they did not indicate whether they would continue to fund the program or kill it off.

Del. Andrew A. Serafini (R-Washington) told one activist that lawmakers don’t have anything against the film industry — they just also represent other industries that are also struggling and would also benefit from a government subsidy. “The idea that things would stand on their own, without government intervention at some point, is what we would hope,” he said.

While many lawmakers so far have supported the program, especially in the state Senate, its future will depend in part on the views of Gov.-elect Larry Hogan (R), who will wield considerable control over the state budget.

Hogan said Tuesday that he’s “anxious to hear” what the analysts have to say but so far was not taking a stance.

If lawmakers are insistent on keeping the program, the state analysts offered some recommendations for improving it, such as providing grants to shows instead of tax credits, asking counties that benefit from a production to share the cost of the incentive, requiring a multi-season commitment or capping the amount one production can receive.

Senate President Thomas V. Mike Miller Jr. (D-Calvert) said before the hearing that state pride is also a factor.

When lawmakers debated funding for the film tax program earlier this year, “House of Cards” threatened to leave the state if it did not receive the millions it expected. Losing the show to a sister state, Miller said, would be a blow.