Hollywood South: Lights, camera … cut?Posted on May 19th, 2016 by Leonard Alsfeld
BATON ROUGE — Movie industry officials and economic developers predict the curtain will close on Hollywood South without revisions to Louisiana’s film tax credit program.
Louisiana Economic Development Secretary Don Pierson testified here Monday during the Senate Revenue and Fiscal Affairs Committee meeting the industry has already contracted by 80 percent since the Legislature capped the credits during last summer’s special session.
“There has been a steep dropoff in our markets,” said Pierson, whose provided data showing there were 12,600 jobs connected to the movie industry in 2015 with an annual payroll exceeding $188 million before the Legislature dialed back the program.
Last year’s legislation not only capped available tax credits at $180 million annually, it suspended for a year the ability to sell 85 percent of the value of the credits to the state and created a backlog of credits that haven’t been liquidated, meaning studios with new productions might not be able to secure the benefit for years.
“Interest (in Louisiana) has dropped 90 percent,” said Herbert Gains of Big Easy Studios in New Orleans.
“Before now I might have five or six people from the industry come by my shop five times a week,” said Brian Gray, who transformed Timeline Antiques in Shreveport from a traditional shop to a movie prop supplier. “But I haven’t seen anybody from the industry since the end of March.”
Gray said a quarter of his business has been generated through the film industry.
But most of the senators weren’t moved, noting a study showed a 23 percent return on the state’s investment.
“We’re having trouble educating our children and health care is lagging, so how can we look at something that doesn’t have a positive return on investment?” said Sen. Neil Riser, R-Columbia.
“We don’t have the money to do this,” said Sen. Jay Luneau, D-Alexandria. “We can’t keep giving this money away.”
No changes to the credit will be made during this session. Monday’s testimony was a continuation of the committee’s comprehensive review of the state’s tax credits, rebates and exemptions for future consideration.
But advocates insisted the study undervalues the industry, not taking into account the ripple effect or the much larger impact on local communities in which production occurs, which Pierson said is about $4.50 for every $1.
“The state buys the whole pie, but just gets back a small sliver,” Pierson said.
“We’re here to examine state dollars,” Riser said. “Our obligation is on the state end.”