States push tax breaks in hope of luring movie business

CLEVELAND (AP) _ Jim Gelarden has been able to make a living working in an industry he loves, designing movie sets and helping plan television productions around the nation. <br/><br/>Seeing an established

Friday, July 22nd 2005, 1:27 pm

By: News On 6

CLEVELAND (AP) _ Jim Gelarden has been able to make a living working in an industry he loves, designing movie sets and helping plan television productions around the nation.

Seeing an established movie industry in his home state _ and a chance to work in his native city _ would make his job a lot sweeter. But for now, Gelarden must trade hometown dreams for good-paying gigs to the south.

``Film trucks have wheels so they can go anywhere and right now they're going where the best deals are,'' said Gelarden, a production designer from Cleveland whose resume includes the movie ``Seabiscuit'' and commercials for Pizza Hut and Nike. ``And the best deals right now are in Louisiana.''

As more film productions jump to Canada and other low-cost countries, lawmakers around the nation are taking notice of the lure of Louisiana, which in 2002 began offering a 15 percent rebate on the cost of movie and TV productions valued at $8 million or more.

This year at least 13 other states _ including Colorado, Maryland, New Mexico, Rhode Island and South Carolina _ have proposed creating similar incentives, mostly through tax rebates or exemptions, or adding to their existing breaks.

``Not unlike manufacturing, the film industry has increasingly been going out of the country and if you're going to compete on a global scale it's important that you have competing incentive programs or comparable incentive programs,'' said Alex Schott, director of the Louisiana Governor's Office of Film and TV.

Louisiana's program created hundreds of new jobs and spawned $375 million in 2004 revenue for the state from the making of films like ``Ray'' and ``Mr. 3000.'' The revenue was up from $20 million before the program.

In Ohio, a bill patterned after Louisiana's would create a tax credit of 15 percent to 20 percent based on a film company's total investment. The sponsor, Sen. Patricia Clancy, a Cincinnati Republican, expects the bill to get a hearing when the legislative session resumes this fall.

``We feel that if this investment is made in Ohio, more people will want to come, our tourism dollars will increase and more films will be made here,'' she said. ``And that of course leads to many more jobs.''

Actor Sean Astin of ``Lord of the Rings'' and ``Rudy'' screenwriter Angelo Pizzo back a bill lingering in the Indiana House of Representatives that would give a 30 percent state tax credit on productions, among other incentives. Pizzo, who's also a producer, said he has two films he would shoot in Indiana if the measure becomes law.

Malcolm Petal, chief executive of New Orleans' Louisiana Institute of Film Technology, said tax breaks are often the deciding factor for what locations producers choose or whether a movie gets made. That is true especially for companies with smaller budgets like the ones he works with to produce television movies, mini-series or documentaries.

``It's important because production costs are going up and also important because jobs are being lost to overseas,'' said Petal, just hours after finding out 11 productions he worked on last year in Louisiana were nominated for Emmys.

``We're not in competition with Hollywood. We're trying to bring the films back from Canada and Romania ... and wherever else the productions are moving,'' he said.

Not everyone is as interested in helping lower the price tag of transplanting the bright lights.

Arkansas turned down a bill that would have offered a tax incentive package that was tied to the number of movies a film production company made in the state. Similar legislation was spiked in Texas, Hawaii and Alabama.

Critics are leery of offering tax breaks at a time when many states are dealing with tight budgets and when many lawmakers are trying to simplify tax codes that already include several complex tax breaks for businesses.

Lowell Kalapa, president of the nonprofit Tax Foundation of Hawaii, said his group and others were opposed to the measure for various reasons, including tight finances and because Hawaii already offers a host of tax breaks for filmmakers, including on hotel taxes.

``Those of us who were against it were saying, 'We're actually spending money out the back door and you cannot balance the state budget if you continue to have these uncontrollable losses of revenue,''' Kalapa said.

The opposition won even though the producers of ABC's popular ``Lost'' were threatening to move production from the island of Oahu to a cheaper location away from Hawaii.

Ultimately Hawaii's United States address, yearround warm, sunny weather and beautiful beaches won over ``Lost'' producers, who agreed to stay.

Kalapa said that proves his point that additional incentives are unnecessary. ``Those are the things that should be attractive to film producers. Why do we have to give them money?'' he said.

Gelarden said he's closed a design studio in Cleveland and recently got an apartment in New Orleans because that's where movie work is. Recently, sets in the hot, humid Bayou have been transformed into snowy scenes he says could be Cleveland's bread and butter if the state helped make moviemaking cheaper here.

``There are some amazing locations here and great stories to tell,'' Gelarden said. ``That's some serious money to be spent.''