Posted by Bobby Henon on February 04, 2014 at 12:32 PM
Among the priorities Gov. Corbett must consider in his budget address to the General Assembly today is how we apply tax policies to film production.
Ten years ago, Gov. Ed Rendell signed into law the Pennsylvania Film Production Tax Credit (FPTC), which offers a transferable credit to those spending a percentage of production costs in the commonwealth. Thirty-eight states have film tax-credit programs, creating competition among them to incentivize productions. The problem? Pennsylvania's FPTC is capped at $60 million annually.
Since the program's inception, nearly $243 million in state tax credits have been approved and/or awarded to film production companies. These companies have gone on to inject more than $1 billion directly into Pennsylvania's economy, generating an estimated $1.8 billion in total economic activity and supporting nearly 14,500 jobs.
This is also an issue of business recruitment. Filmmakers want to shoot in the best locations with experienced crews and actors. The Philadelphia region has it all and more. However, growth in the sector is at a standstill.
The major impediment to growth is the FPTC cap. As the only state with two major production centers, Pittsburgh and Philadelphia, Pennsylvania has far outgrown the current tax credit allowance. Consequently, $60 million is exhausted by midyear, so potential film partners receive a clear signal: Look elsewhere. In fact, it's impossible to measure the true impact of the cap because, industry-wide, they know the cap will be exhausted. The result? They never even consider coming to Pennsylvania in the first place.
Let's use recent history as a guide.
Critically acclaimed American Hustle, the dramatized version of the Abscam scandal, is a Philadelphia-based story written and directed by the Oscar-nominated David O. Russell, who led Philadelphia's Silver Linings Playbook to Oscar gold in 2012. True, American Hustle is a story of political corruption and scandal - a pockmark on Philadelphia's political and civic history, but it's our history nonetheless. Was it shot in Philadelphia? Try Boston.
Russell wanted to bring his all-star Silver Linings Playbook cast (Jennifer Lawrence, Bradley Cooper, and Robert De Niro) back to Philadelphia to shoot American Hustle. Unfortunately, Pennsylvania did not award the production tax credits, so Russell moved his blockbuster to a state that has an uncapped program: Massachusetts. (Connecticut, Illinois, Louisiana, and North Carolina are among other states with no cap.) Furthermore, we may have lost this brilliant filmmaker forever over the matter.
We are working hard to promote policies and attract companies that will maintain Philadelphia as a leading host of ideas and the creative economy. A corollary to that is a thriving film-production sector. We have the manpower and the need for jobs. Creative policies like the FPTC provide a much-needed boost to our economy. Conversely, if the FPTC allowance were reduced, the effects would be staggering to the commonwealth's unemployment rolls, as thousands of film technicians across the state would stop paying income tax and start collecting unemployment or, worse, leave for states with uncapped programs.
We are competing, as a city and commonwealth, with our neighbors. New York offers a tax credit of $420 million annually. Pittsburgh shares our tax-credit allotment and has a lower cost of living than Philadelphia, which pits us against them simply because there's just not enough incentive to go around.
We strongly urge the governor and the General Assembly to make a commitment to uncap the FPTC. Let's add a jolt to our economy, get jobs for our neighbors, and show the country that Pennsylvania can be the East Coast Hollywood now.
Philadelphia Councilman Bobby Henon is a member of Gov. Corbett's Film Advisory Board (www.bobbyhenon.com). Sharon Pinkenson is executive director of the Greater Philadelphia Film Office (www.film.org).
Read more at Philly.com.