State Sen. Dominic Pileggi’s move last week to uncap the state’s $60 million film tax credit couldn’t come at a better time for the state’s film industry.
Well, that’s not entirely true. The incentive program actually ran out of funds in October, just four months into the new fiscal year.
That resulted in the loss of 25 projects state wide, says Dawn Keezer, executive director of the Pittsburgh Film Office. She estimates those projects could have resulted in a boon of more than $200 million to the state. But regardless of the past, she says she lauds Pileggi’s move and hopes it meets speedy passage in the state legislature.
“Pittsburgh has a great history in the entertainment industry and we have a great crew that is ready for work,” Keezer says. “The problem is we ran out of money in October and these great industry workers that we have here have been unemployed since January.
“There are 12 states that have an uncapped film credit and their people are working non-stop. This is a great move for the state and I think we have support on both sides of the aisle to get it done.”
The Pennsylvania film tax credit offers productions a 25 percent tax break if they spend 60 percent of their budget in the state. For example, last year’s Jack Reacher starring Tom Cruise got the tax credit for spending a least 60 percent of its $60 million budget in the state. Pileggi says uncapping the credit will get people working and keep young professionals in the industry in the city. According to a release announcing the bill in 2011“Pennsylvania was the fifth highest-ranking state in terms of film-related employment, behind only California, New York, Florida and Texas. Also in 2011, film-related wages in Pennsylvania totaled $248 million.”
“The film tax credit is a strong tool for job creation generally, and it’s proven to be a tremendous way for Pennsylvania to fight ‘brain drain’ in particular,” Pileggi said in a release. “One of the reasons I’m introducing this bill is to help reverse the decades-long trend of Pennsylvania losing talented young people to other states.”
Not all films take the tax credit. Pittsburgh was just one of several locations for 2012’s Dark Knight Rises, and the $300 million film didn’t qualify for the tax credit (even though some public officials tried to make us think it did), but it employed local crew and even filled Heinz Field with 10,000 extras
paying them each $7.25 an hour. A small portion of the extras were paid, however, the vast majority were treated to free food parking and prizes.
Keezer says the tax credit is very carefully accounted for. After a film ends production, it must submit a full accounting of its spending to the state Department of Revenue. Every dollar spent is accounted for and only after t is reviewed is the credit issued.
Among the projects the state lost last year was a television series for Disney and the David O. Russell film American Hustle, which chronicles the FBI’s ABSCAM operation of the 1970s.
“They were going to shoot that film in Philadelphia,” Keezer says. “But there were no tax credit funds available so they packed up and went to Boston.”
When Brad Pitt’s summer zombie spectacular World War Z comes out Friday, Keezer says it too will be another example of a film lost because of tax credit shortfalls. The film takes place in Philadelphia, but except for some opening shots, the entire film was shot elsewhere.
“We have 18,000 people working in the film industry and without the credit, we can’t get them working,” says Keezer. Keezer says that industry bulletins often report which states still have tax credit money available, but since the money dried up, so have the inquiries.
And as the end of the fiscal year draws to a close and a new one starts, the work will return, but for how long is the question. The $60 million this year is likely to go as fast as it did last year.”
“Pennsylvania is not new to the film industry, we’ve been doing it in Pittsburgh since 1914. We’ve spent years establishing our reputation,” Keezer says. “We have been untouchable since the tax credit gave us the lift we needed to be competitive.”