Maryland Movie Industry

Lights, camera ... what?

January 28, 2009|By JAY HANCOCK

Entertainment moguls don't need to con little old ladies to finance productions any more, as they did in Mel Brooks' The Producers and its spinoffs.

After all, there are state taxpayers to fleece.

Hollywood is getting struggling states to bid higher and higher for the glamour and supposed economic benefits of on-site film production. Maryland is joining the game. Del. Melony Ghee Griffith, a Prince George's County Democrat, says she'll introduce legislation that would have the state pay 28 percent of film-production costs incurred here.

"Maryland doesn't have anything close to being competitive" with other states, says director Barry Levinson, who was promoting the bill in Annapolis yesterday. "Unless state officials do something in terms of becoming more film-friendly, Maryland will continue to lose out."

You always wanted to help Barry produce films like Diner and Tin Men, right? Unfortunately, the taxpayer partners in these deals don't get to share in the box office, premiere parties or much of anything else. They just write checks.

The idea, as with all "economic development" welfare, is that luring employers with government cash generates jobs and enough added tax revenue to offset the cost. That's a dubious proposition even for auto factories and steel mills paying $30 an hour for permanent jobs.

Economic development pros know the money they can pry from a state is proportional to the glamour and mobility of their operation. Got a BMW plant? Not bad. An NFL football franchise? Better. A Brad Pitt movie? Back up the armored truck.

A Brad Pitt movie, as it happens, is presented as evidence that Maryland needs to give Hollywood money. The Curious Case of Benjamin Button, set in Baltimore in F. Scott Fitzgerald's story, got moved to New Orleans in the movie version because of Louisiana's fabulous filmmaker incentives.

Good thing for Maryland, too. Louisiana taxpayers had to pay the Benjamin Button producers $27 million, according to state officials. The sales tax from Cate Blanchett's hotel bill and income tax paid by the key grip could not have come close to making up for that outlay.

"There's no way you can say these things make money" for the state budget, says Greg Albrecht, chief economist for the Louisiana Legislature. Extra tax revenue generated by films, he adds, "is not going to come close to the direct payment you're going to make. Basically, you're just flowing money out of the public treasury into the private sector."

In fiscal 2007, Louisiana paid $106 million to film producers and got back what Albrecht estimates was $15 million in added tax revenue. Net cost to taxpayers: $91 million that could have been spent on schools, roads and health care.

Proponents of Hollywood handouts don't want to hear this.

They note a study purporting to estimate that for every dollar New Mexico gave movie producers, that state got $1.50 back in tax revenue. Any economist not being paid to produce one of these things can tell you how questionable those figures are. Relying on huge, unverifiable assumptions, the New Mexico study was commissioned by the state film office, not exactly a disinterested party.

But Maryland's incentives would be "post-expenditure" rebates paid to filmmakers. The state won't give them a penny until the money comes into the economy via moviemaking expenses. And the rebates aren't even listed as an expense on next fiscal year's state budget!

As if they weren't real money being taken from taxpayers and given to private enterprise. Rebates aren't on the budget because they're a contingent expenditure. To repeat: Under this proposal the state would pay studios directly. Little of the money moviemakers spend would end up with Comptroller Peter Franchot. It's a net cost to the state of potentially tens of millions a year as it faces a budget shortfall of $2 billion.

Why 28 percent? Why not 50 percent? Why not cover the full cost if filmmaking in Maryland is so great? Supporters can't say. All they know is that 28 percent is competitive with what's being offered by Connecticut, Michigan, Louisiana and other places.

At least for now.

"Everybody's throwing money at this industry," says Albrecht. "Other states keep upping the ante. I'm sure I'll have proposals to sweeten our deal" from this year's Louisiana Legislature.

A few years ago, Maryland and Baltimore County stretched to come up with $10 million to get General Motors to build a clean, green transmission plant in White Marsh. Hundreds of permanent jobs. Over $400 million in capital investment.

The film industry would have you believe that spending potentially several times that amount, year after year, for jobs lasting a few months, is a great investment for Maryland. Even Hollywood accountants, famous for torturing the books into saying strange things, would have a hard time making that one work.

Thanks, General Assembly, but I'd like to confine my support for the movies to the $8 matinee at the Columbia AMC theaters.

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