(The Center Square) — Maine is making another push to expand its film tax credit program to lure more productions to the state, but fiscal watchdogs warn the move would be a taxpayer-funded giveaway to big Hollywood movie studios.
A proposal under consideration by the Legislature’s Committee on Taxation on Tuesday would dramatically expand the tax credit program by allowing up to 25% of non-wage costs – such as set construction, security and food – over $75,000 to be reimbursed by the state for the production of movies, TV shows, documentaries and commercials filmed on location in the state. The current rate is 5% of costs.
The Democratic-backed legislation would also increase reimbursement of wages paid to Maine residents from 12% to 25%, and from 10% to 20% for non-residents and eliminate the current credit limit of up to $50,000 of wages per individual. It would also provide an additional 3% reimbursement for productions filmed in certain counties.
Backers of providing more incentives say the tax credit has created thousands of jobs in the state and supports a small but thriving movie production industry. They say Maine’s iconic landmarks and quant seaside backdrops aren’t enough to lure blockbuster films.
“These incentives are not just line items — they are lifelines,” said Benjamin Joseph, co-owner of Fine Cut Media, Inc., a Maine-based film production company, said in recent testimony of the bill. “Whether a project is a national documentary, a corporate training video, or a regional commercial, each one represents work that stays in Maine when this program is in place. Local businesses benefit, from hotels and caterers to camera rental houses and payroll services.”
The Maine Film Office, which hasn’t taken a position on the bill, notes that tax incentives have become a key factor in determining where production companies choose to film their next projects.
“In today’s highly competitive market, it is increasingly rare for a production to film in a location simply because the story is set there,” Steve Lyons, the office’s director, said in a testimony on the bill. “Often, filmmakers choose alternative locations that can serve as a “stand-in” to reduce costs and meet budget constraints — sometimes allowing them to reinvest those savings into other aspects of production.”
But fiscal watchdogs say expanding the tax credits won’t turn Maine into the “Hollywood of the East” but will siphon away much-needed tax revenue from the state’s coffers.
“Time and again evaluations of state programs with much larger film incentives than Maine’s have conclusively shown they are a bad investment that siphon millions of dollars in public funds from other priorities and give public money to big Hollywood studios and production companies,” said Maura Pillsbury, a tax analyst at the Maine Center for Economic Policy, which opposes expanding the credits.” Maine is too small to compete with these massive giveaways in other states, and we shouldn’t try.”
Maine has wrestled with the issue of expanding the film tax credits for years, and has rejected similar proposals to increase the reimbursement rate for filming on location in the state to attract more movie productions.
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Several states, including Rhode Island, Arizona, Indiana, Wisconsin, Iowa and Kansas, have eliminated or scaled back film tax credits in the face of widening budget shortfalls or backlash from taxpayers.
Battles have been framed around “Hollywood hand-outs,” with the super-PAC Americans for Prosperity, created by the Koch brothers, funding campaigns to eliminate the credits, mostly in states led by Republican governors such as Florida.