States Fighting For Films

As states elbow each other to lure movie makers to their markets with increasingly attractive tax incentives, some say the competition has gone too far.
June 11, 2010, 10am PDT | Nate Berg
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Some worry that states are having to offer sweeter and sweeter deals in order to keep up with the competition, but are greatly decreasing the worth of those contracts to the state's coffers.

"Michigan may offer the sweetest deal to moviemakers, but the reality is that almost every state has some incentives designed to attract Hollywood productions. What was unique just a few years ago has quickly become standard. Back in 2002, only five states offered production incentives for film projects. But as of the beginning of this year, more than 40 states do. Arizona, Connecticut, Illinois and Louisiana, for instance, offer 30 percent tax credits or rebates, while Alabama, Maryland and North Carolina offer 25 percent--and on down the line. In fact, these types of incentives have become so de rigeur that even California has felt obliged to get in on the act. Lawmakers last year approved a 25 percent credit for films shot in the Golden State.

All totaled, states distributed $1.8 billion in incentives and tax credits to the entertainment industry from 2006-2008, according to an Associated Press study. 'States are trapped,' says Robert Tannenwald, an economist and a senior fellow at the Center on Budget and Policy Priorities. 'Thanks to the extreme mobility of film production, when one state goes after these movies, another state, if it wants to stay in the game, has to match the deal they're offering.'"

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Published on Tuesday, June 1, 2010 in Governing
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