With no incentive in place, what’s next for the Evergreen State’s production industry?
By Amy Lillard, Executive Director, Washington Filmworks
Forty states in the Union offer motion picture incentives designed to attract film projects that create thousands of jobs and bring millions of dollars to a state. While Washington State was one of the first to offer such an incentive, it is no longer one of the forty. How did this happen?
The momentum created by Washington Filmworks (WF) and the Motion Picture Competitiveness Program is impossible to ignore. Since launching the program in February 2007, WF has approved 71 projects for funding assistance, including 29 feature films, 37 commercials and 5 television projects. These projects have had an estimated $137 million economic impact over the past four years. And in fact, the Joint Legislative Audit and Review Committee (JLARC), an independent body of the legislature, recommended in a report authored in December 2010 that the program be renewed because it effectively maintained our position in a competitive marketplace.
Despite this significant contribution to the state’s economy, the bill to renew the Motion Picture Competitiveness Program was never brought to the floor of the House of Representatives for a vote during the 2011 legislative session. The program officially sunset on June 30, 2011.
Recently, major media outlets such as the Los Angeles Times, New York Times and Wall Street Journal have been picking up stories about how film production incentives represent bad economic development for states. Fueled by biased and politically motivated entities hiding behind important names such as The Center for Budget and Policy Priorities, when examined critically it becomes apparent that these studies make for good newspaper headlines, but they fail to tell the true story. Not all production incentives are created equal.
Many articles about motion picture incentives examine the industry through a microscope and highlight only the most aggressive incentives in the United States. Michigan is often cited in articles as one of the worst economic development opportunities, as they offer production companies up to a 42 percent return on all production spending. In contrast, Washington State offers 30 percent back on qualified in-state spending only. In Washington, a producer may only get a return on what the production proves they have spent on the ground by renting local equipment, paying for locations, and hiring Washington resident cast and crew.
Since 2007, Washington Filmworks has sought to create a partnership between business, labor, the arts and government to help fuel the economy. This incentive has been a resounding success, keeping Washington competitive in film and keeping film industry workers employed. As the only state that requires health and retirement benefits for workers on a production, the Washington incentive was never about bringing Hollywood to Washington, but rather providing actors and crew from every part of the state with steady work and keeping the doors open for businesses that support the film industry.
Take away the lights, the camera and the action, and you can see what the film incentive really means: Jobs. The JLARC report also suggests that the number of jobs in the motion picture industry increased each year that the production incentive was online, with the exception of 2009, when the recession hit. That said, according to Employment Securities data, film employment declined at a rate of 0.7 percent during this time period, which is significantly less than the statewide average of 1.4 percent during the same time period.
The reality is that film industry work is project-based, and a typical film industry professional may work on three to four major productions in a year. And when working on a production, these film industry professionals typically work 14- to 16-hour days. It is difficult, if not impossible, to equate these project-oriented jobs into a box typecast as FTEs. But why should one good-paying, family-wage, 9am-to-5pm desk job represent a better opportunity for the state than the jobs the film industry provides its workers?
It is worth mentioning that there were very few easy decisions to make in the 2011 legislative session. With the state badly in debt and social services strained almost to the breaking point, it might seem difficult to endorse a tax incentive for the movie industry. However, the loss of the film incentive represents a further strain on the economy, forcing industry workers to rely on unemployment and causing the loss of millions in potential revenue to the state. The short-term gains of cutting the incentive are nothing compared to the long-term economic damage the absence of the program creates.
While devastating to the film industry in Washington, this does not represent the death knell of movies and TV in this state. Actors continue to act, writers continue to write, and gaffers continue to gaff, but without the incentive in place, jobs—real paying family-wage jobs—will dwindle until they disappear altogether. Fewer and fewer projects will come to Washington and it will not be long before the Evergreen State becomes the Evergreen “Fly-Over” State, as projects pass us by in favor of Oregon or Vancouver, B.C. Washington’s homegrown filmmakers, cast and crew will be forced to go out of state to work, or worse yet, move themselves and their families to states with competitive incentives in place.
In this difficult economic climate, you are seeing states across the country maintain and even increase the production incentives that they offer. New Mexico just voted to continue their incentive program, with a higher cap than was proposed by the governor. Utah just voted to raise their incentive, and Governor Kitzhaber in Oregon led the charge to get their incentive program renewed through 2018.
Washington State has so much to offer filmmakers: Diverse locations, talented cast and crew, and a wealth of production resources. What we don’t have is an incentive.
With 40 other states across the country with incentives in place, we can only wonder: What do the 40 other states know that we don’t?