A few weeks ago, I got a call from a representative with the Louisiana Film and Entertainment Association (LFEA). The representative explained to me what I already know; the film industry in this state has been hurting since the $180 million tax credit was enacted last year. In order to fight back by providing the powers that be with a more complete vision of the victims of this drop, the representative was requesting that people affected by the industry in any way submit a written testimonial.
When I spoke with the LFEA in mid-May, the organization reported that they had received more than 1,800 written testimonies. The next step was to appear in front of the Senate Committee on Revenue and Fiscal Affairs on Monday morning, May 16 at 9:30 a.m. — the same day we went to press with this issue.
Of course I had to watch via the streaming feed on the State Legislature’s website.
There were actually three tax credits on the agenda to be discussed before the committee recessed at noon: the Motion Picture Investor Tax Credit; the Digital Interactive Media and Software Tax Credit; and the Musical and Theatrical Productions Tax Credit. It was a lot to get through, but the purpose of the committee meeting was only to introduce the topics into discussion. There would be no voting.
The two main presenters on the side of the film industry were Don Pierson, secretary of the Louisiana Economic Development (LED) and Chris Stelly, executive director of the Louisiana Office of Entertainment Industry Development. Both, in my opinion, did a strong job of laying out the changes that were made last year, and the fact that there has been a steep dropoff in the industry as a result. “We know only 20 percent of our film capacity is at work today,” Pierson said.
A few things were made clear: both organizations are in favor of the sunsets on the bills, saying that they encourage the continuation of the conversation; Canada, Georgia and California are seeing increases in filming; and, finally, there is a marked difference between the ROI the state has seen from the industry vs. the ROI for local economies.
It’s a big difference. While the industry typically gives returns of 23 cents on the dollar to the state, the local cities and parishes are seeing a $4.63 return on the dollar.
Two members of the Senate Committee were vocal on the subject: Senator Neil Riser of Caldwell, Louisiana and Senator W. Jay Luneau, of Alexandria, Louisiana — both, it should be noted, are not exactly film hubs. Neither sounded supportive. Riser dismissed the local returns, noting that as a State Senator his obligation is to look at the state, not local impact.
There was a lot of focus and confusion during the meeting over the methodology used to come up with the ROI, and zero attention paid to what Stelly stressed twice was the real issue at hand: the suspension of the 85 cent buyback, explaining that the buyback is a function of financial security for the lenders on the market and suspension means that no one knows the value of the credits.
The time given to motion picture sredits was brief, but it was definitely not overly encouraging, with Senator Luneau expressing multiple times that he would rather see the money go in other directions, like to education. He expressed frustration that large movie companies would come in and make millions filming in the state while we would get nothing — that is, until it was explained that companies are required to pay state income tax on all their earnings while filming in the state.
There were multiple times while listening that I wanted to bang my head against the wall. It will definitely be interesting to see how things progress.
Kimberley Singletary is the managing editor of Biz New Orleans magazine. A 20-year Southern California veteran, she has been surrounded by the film industry for most of her life.
