Columbus Art and Film Leaders Express Concern on Distribution of Ohio Motion Picture Tax Credits
COLUMBUS, Ohio—In a letter to David Goodman, Director of Development Services, Columbus art and film leaders have expressed concerns about the Ohio Motion Picture Tax Credit guidelines, following allocation of Tax Credits for 2017-2018 (July 1, 2017-June 30, 2018).
On July 18, the Development Services Agency announced recipients of the $40 million in film tax credits. In a letter to Development Services Director David Goodman, the Columbus area leaders noted that approximately $30 million—75%—of the $40 million in available tax credits were allocated to just two projects, both of which are filming in Cleveland.
In comparison, last fiscal year tax credits were awarded to approximately 30 projects (July 1, 2016-June 30, 2017).
The Ohio Film Office serves under Governor John Kasich within the Development Services Agency. Rules were recently changed by the Ohio Legislature to remove project caps that allowed small, medium and large projects to compete more fairly.
“Film can be a major creative industry across the whole state. Columbus is a huge supporter of the Ohio Motion Picture Tax Credit as a tool to grow our base. The recent changes, including eliminating the per project cap, means that the Ohio film tax credit cannot play the role that they can in creating jobs and building a sustainable film industry,” said John Daugherty, Executive Director of the Greater Columbus Film Commission. Daugherty noted that the program could be significantly improved by adding basic safeguards to provide that all areas have an equal chance to receive credits, and that tax credit projects should greater utilize local industry workers and businesses, in addition to the larger New York and Los Angeles projects that shoot in Ohio, bring their own crew, and leave the state. “This lopsided use of tax credits will take Ohio out of the running for dozens of other films and TV shows. Credits can’t grow jobs in Ohio if they are awarded primarily to out-of-state companies with pass-through, big-budget projects,” Daugherty said.
More than 30 films applied for credits across Ohio, on par with last year’s total. Of the $40 million total available, northern Ohio received 60% of the credits they applied for, Columbus received 16%.
Film Columbus was created in 2007 to help coordinate, communicate and collaborate to make filming easier in the region. Columbus and central Ohio hosted multiple independent film and TV productions, large-scale commercial projects, and several TV and TV network episodes filmed since January of 2015. In 2015 the films 478 and I Am Wrath created a total of 834 local jobs with an estimated local spend of $16.6 million. In a 2016 impact study by Dr. Bill Lafayette, it was determined that for every $1.00 spent the industry returned $1.91 to the local economy.
“We all want film to grow as an industry, but it takes a balanced oversight process to use tax credits with input from leaders across the state, otherwise great projects will not come, Ohio-based companies will struggle, and we’ll have less jobs created,” said Tom Katzenmeyer, President and CEO of the Greater Columbus Arts Council. “Tax credits are an important tool. Ohio should model our law and rules on national best practices, with common sense caps and incentives to sustain Ohio-based companies. It is time to look at reforming the rules.”
Columbus leaders are appealing to film production companies and leaders in other regions to join them in asking the state of Ohio to reconsider changes to the law and rules. Katzenmeyer noted that the current law provides for the opportunity for the tax credits to be geographically distributed, but that approach has never been implemented.
The letter to Director Goodman praised the Director for continuing to support the film tax credit program, noting that Ohio has significant potential to create and retain jobs and grow the industry. The letter also made the following recommendations for consideration:
• Enact a tax credit cap per project to provide for a more level playing field and allow more films to come into Ohio. This approach is successfully used by several other states including Georgia, Kentucky, and Pennsylvania. Ohio should consider either a cap on credits or a cap on “above the line” expenditures that qualify a project for a tax credit.
• Encourage local hiring by increasing the local hire tax credit to 35%, with out-of-state wages qualifying for 30%.
• Incentivize local brick and mortar investments to grow the industry and provide bonus credits for productions working with companies based in their region employing Ohioans. Consider an allocation of the credit for existing businesses in Ohio.
• Create a mechanism to provide for input from local and regional film industry practitioners and advocates. This will help to increase the support for the film industry both locally and statewide.
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