Editor's note: This column is a rebuttal to the Show-Me Institute guest column "Film credits receive failing grade" published in the Dec. 14 issue; search "film credit" at sbj.net to read the full editorial.
With "Up in the Air" in theaters since Christmas Day, Missourians have a lot to appreciate when watching the film.
In the early months of 2009, St. Louis hosted George Clooney, and the cast and crew of the film. It appears to be a great success not only for the production (several Golden Globe nominations) but for Missouri's economy.
Missouri was able to pull the production in-state with the help of our film production tax credit. Missouri's credit was originally adopted in 1999 at $1 million. It has grown since, but minimally compared to other states. Currently, Missouri offers a 35 percent credit up to $4.5 million for in-state filming.
Recently, Christine Harbin of the Show-Me Institute said in an editorial that the credit does not provide "lasting jobs or significant revenue gains." Harbin refers to a similar credit in Wisconsin that offers a refundable credit of 25 percent for all production-related activities. The Wisconsin State Journal found the state paid $4.6 million in credits to the filmmakers of the Johnny Depp movie "Public Enemies," yet saw a return of $270,000 in tax revenues. While this may be the case, Harbin does not take into consideration the more than $18 million of economic activity created by the film's production.
In Missouri's case, "Up in the Air" received $4 million in credit for the St. Louis filming. Worst-case scenario means that the films producers spent $13 million. In actuality, Bruce Deichl, a national film-industry consultant, projects that the film brought nearly $30 million to the St. Louis region. That $30 million went to wages for cast and crew, local carpenters, cosmetologists, caterers and extras. Money also was spent on products such as lumber, paint, a snow machine, car rentals and more for set design and taking care of cast and crew.
Researchers state that those dollars will turn over several times in Missouri's economy. The hotels needed additional housekeepers for the 6,000 room nights that were rented during the filming. Restaurant servers have more money to spend from tip income by producers or other actors dining out. A conservative study from New Mexico shows a cost-to-benefit ratio of 1.5-to-1, while Massachusetts reflects a 6.25-to-1 return. No matter how you look at it or who you talk to, there is economic benefit. Those dollars circulate in local economies, encourage spending and help retain jobs.
Harbin also misses the fact that the movie industry is nontraditional. It is hard for some people to imagine that film crews and cast don't maintain full-time employment. Industry workers piece multiple productions together to maintain a decent living. Some employees in the industry have been able to piece together different projects earning up to $3,500 per week on productions that may only last 10 weeks. Missouri's goal is to increase the film tax credit to attract more films to Missouri so we can grow this industry while improving the overall economy.
Lastly, Harbin mentions that it may be better for Missouri to leave the filmmaking to other film states "like California." She may not know this, but California found itself weakened between 1998 and 2000. Between those years, the U.S. lost $10 billion worth of film productions to Canada, which passed film tax incentives. Southern California alone lost about 35,000 jobs due to the shift to Canada.
States such as Louisiana, New Mexico and Massachusetts have benefited from these credits and are now considered movie-making states. On average, those states have seen economic development near $560 million according to the states' film commissioners. With proven economic impact, it is now up to the legislature to determine if Missouri should capitalize on its chance to do the same.[[In-content Ad]]Ray McCarty is president of Associated Industries of Missouri. He has more than 25 years of economic development and taxation experience from state business organizations and departments.