Film makers: no tax credit, no movie business
BATON ROUGE- Louisiana movie makers say rolling-back the film industry's tax credit could kill the business. The Jindal administration wants to reduce tax exemptions to help with next years $1.6 billion budget deficit, and it's focusing on film makers.
Higher education and health care are expected to take big hits in the 2015-16 fiscal year budget, so the Governor has suggested cutting tax exemptions to soften the blows. "You can't just keep writing blank checks every year while you're hemorrhaging in higher education and health care," says Barry Erwin with the Council for a Better Lousiana, "you've got to strike some kind of balance. And certainly the film industry is one that people will take a look at."
Louisiana's film industry has flourished under the tax incentive program. "Baton Rouge itself was just ranked by Movie Maker Magazine as the number one city to live and work in the film industry, obviously its working," said Patrick Mulhearn with Celtic Studios.
Mulhearn's studio is located in East Baton Rouge. It has thousands of square feet in sound stages and green screens and it's capable of handling large productions. Several major films have been shot at Celtic like Battleship and Oblivion.
According to Mulhearn, the incentive program has created an estimated 15,000 jobs throughout Louisiana. "In order to stay there you have to stay competitive," said Mulhearn, "and you have to look at what other states and other nations are doing."
Mulhearn says other states like Georgia and California have similar tax credit programs with more established film industries. Also, larger cities like Atlanta and Los Angeles offer film makers more variety for locations to film.
Mulhearn says what Louisiana does offer is a less expensive labor market and a lower cost of living. He says the tax credits will keep production companies coming to the state, but he thinks the incentive program needs to remain in place until the industry is more established.
In the 2014-15 fiscal year budget, Louisiana gave $7 billion in tax exemptions. At $151 million dollars, the film industry received 2 percent of those exemptions.
Louisiana offers a 30% tax credit for all expenditures related to film production and a 5% credit on payroll taxes. A movie maker must spend $300,000 to qualify and there is no cap on the exemptions. Also, the credits are transferable to other taxpayers.
Mulhearn is in favor of placing a cap on the tax credit if it means preserving 35% rate.
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