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Wisconsin Film Tax Credit Program: That’s A Wrap?

April 1, 2009

The Milwaukee Business Journal reports on the results of the Wisconsin Commerce Department’s analysis of the Film Tax Credit Program:

Is the Film Tax Credits Program highway robbery?

Is the Film Tax Credit Program highway robbery?

Producers spent more than $18 million, but the department said most of that money went to out-of-state workers and for out-of-state services. Wisconsin’s real economic impact — money spent here, wages to Wisconsin employees and tax revenue from those wages — equated to $5 million. At that level of spending, the $4.6 million in tax credits nearly wipe out the fiscal benefits of the tax incentives program.

The study also said that the film industry in ineffective at creating new jobs. When used for out-of-state film productions like “Public Enemies,” Commerce said the film incentives are 75 percent less effective at generating jobs than other state programs and that each job created costs 20 times more than those created under other state programs. The department said the state’s most expensive program, Community Development Zone, spends $5.96 in incentives for every hour of employment created. For “Public Enemies,” the cost was $444.94 per hour of employment, according to Commerce.

To be sure, backers of the film incentives program have said that the “Public Enemies” project was atypical of the impact of the incentives legislation, but they also acknowledged that certain loopholes in the law should be addressed.

I think that it’s entirely worthwhile to support our burgeoning homegrown film industry, but if this report is correct then some adjustments should be made to the program to keep the tax credit applicable to in-state production costs.    Film Wisconsin and The Chief call into question the Commerce Department’s figures.   I can’t find the study online — why is it not mentioned on the Dept. of Commerce website and why in 2009 do newspapers still not provide an in-article link to studies?   Is the program fundamentally flawed or were we simply hustled by some sharp city slickers?  What do you think?

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2 Comments
  1. Mindy permalink
    April 27, 2009 2:44 am

    I think an adjustment does need to be made, but incentives are a part of the industry in order to compete with other states and neigherbors Canada and Mexico. Whatever happens, the lawmakers need to give what is a fairly new industry in our state an opportunity to attract film and tv producers, such as the tv show talked about at volumeone website.

  2. April 27, 2009 9:38 pm

    That’s very true, Mindy. I don’t think they should remove all incentives, but obviously scaling the incentives based on the size of the project would be helpful.

    I think when it comes to competing with other states and countries, at some point there’s really nothing more we can give. It’s in the interest of some production companies to look for the best deal possible, which may be more than we can offer. If that’s the case, I think we need to take a step back and not give in to irrational “incentive competition.”

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