Silver screen dreams: interstate competition for film and TV productions is intensifying.

Author:Weiss, Suzanne
Position:ECONOMIC INCENTIVES - Cover story
 
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Fans of "Vegas," a new television series starring Dennis Quaid as Sin City's legendary Mob-busting Sheriff Ralph Lamb, likely don't care one way or the other that not a single scene of the CBS production was filmed in Las Vegas--or anywhere else in Nevada, for that matter.

But some lawmakers in the Silver State do. "With all that our state has going for it--the landscape, the history, lots of skilled workers--it's unacceptable that a show like 'Vegas' winds up going to New Mexico and California instead of being filmed right here," says Nevada Senator Aaron Ford (D).

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He has sponsored a bill wending its way through the Legislature this session that would make Nevada the latest state to offer financial incentives--up to $50 million a year in tax credits, in this case--to the producers of films, TV shows and commercials.

Ford, a freshman legislator representing the Las Vegas Valley, says he decided Nevada could no longer remain among the handful of states that don't offer such inducements.

"Since 2001, we've seen our film industry revenues drop from $155 million a year to $89 million," Ford says. Although a similar proposal failed in the 2012 session, he's confident his bill will fare better, noting it has bipartisan support in both chambers and the strong endorsement of organized labor, local chambers of commerce and economic-development agencies.

A Recent Release

A decade ago, only a handful of states offered incentives to production companies, largely in the form of exemptions from sales and lodging taxes, small income-tax credits and free services like access to public lands and assistance in identifying appropriate locations.

Today, most states, along with the District of Columbia and Puerto Rico, offer production companies credits, exemptions, rebates and other services. And a few more states are debating bills this year.

The competition began in the early 2000s, not long after the launch of an aggressive campaign by Canada's federal and provincial governments offering incentives and tax breaks to U.S. film and TV production companies. Louisiana and New Mexico followed Canada's lead, and the race was on. Both states experienced considerable and widely noticed success. In Louisiana, for example, the number of feature films and TV shows produced there went from one in 2002, the year before tax credits went into effect, to 54 just four years later.

Other states quickly followed suit, and over the years they have steadily increased the scope of their incentive packages to stay ahead of one another. At least until the recession hit.

Four years ago, Arizona and Kansas suspended film production credits to help balance their budgets. Kansas restored its in 2011, while Arizona's remains on hold. Also in 2009, then-Governor Jim Doyle (D) essentially gutted Wisconsin's 25 percent tax credit, turning it into a $500,000 annual grant program.

Iowa's Film, Television and Video Promotion Program has been on hold since 2009 as well, but for a different reason. Following a criminal investigation, seven people connected to the program were convicted of fraud and misconduct.

In addition, several states have placed caps on the total amount of tax breaks that...

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