Rhode Island’s tax credit for movies and TV shows has been controversial ever since it was enacted back in 2005. The law offers companies a credit to get back 25% of their production costs if they film here so long as the production costs at least $300,000. Since it was created, state taxpayers have helped subsidize flicks like “27 Dresses” and “Dan in Real Life.”
Gov. Carcieri proposed eliminating the credit when he put together his budget proposal for this year but lawmakers opted to keep it, although they did cap its total cost at $15 million last year. The credit is managed by the Rhode Island Film & TV Office, which has an annual budget of $278,157.
It remains to be seen whether the film credit program will survive next year’s $300 million budget deficit – but Rhode Island won’t be alone in dumping it if that’s what winds up happening, Bloomberg News reports:
Incentives for Hollywood have been scaled back in Wisconsin, capped in Rhode Island, suspended in New Jersey, Iowa and Kansas and scheduled to expire in Arizona. While states continue to expand and introduce subsidies, programs around the country face allegations of corruption, doubts about job-creating power and, most of all, questions about affordability.
“We are starting to stem the tide of state government pandering to the film industry,” said Bill Ahern, policy director for the Washington-based Tax Foundation, which advocates lower taxes.
In the last five years, $3.5 billion in tax credits, rebates and other financial assistance have gone to makers of films, television shows and commercials, according to a calculation by the foundation. In the next fiscal year, states will face $72 billion in budget deficits, the National Conference of State Legislatures estimates.
The subsidies began in Louisiana in 1992 and today are offered by 42 states. A shakeout will halve the number in the next decade as lawmakers conclude they can’t sustain funding, according to Larry Brownell, head of the Association of Film Commissioners International in Redondo Beach, California, which represents every state with incentives except Massachusetts.
Speaking of which, the Film & TV Office’s website lists the 1956 musical “High Society” as a past project – I know that movie’s set in Newport, but was it actually filmed there?