Taxpayers beware: Florida’s film subsidies lobby wants action

There’s no business like show business.

Film
ACTION: A bill offering $300 million in tax perks to entertainment companies receives a lukewarm response.

That’s not just an old Ethel Merman show tune.

State Sen. Nancy Detert, chair of the Commerce and Tourism Committee, this week summarized a film subsidies bill slated to deliver hundreds of millions of dollars in taxpayer giveaways to film and television production companies.

“We have film (companies) call up and their first question is, ‘What do you have in the way of incentives?’” Detert said. “We have none right now.”

Subsidy supporters want more than the $300 million over six years, offered courtesy of Florida’s taxpayers. A month ago, industry reps were looking for a cool $1 billion.

A House-driven provision requiring counties to offer  5 percent to 10 percent in matching funds has some local government lobbyists worried. One South Florida lawmaker is calling for a rewrite.

“I think in one fell swoop what we’re doing is throwing away an industry that has grown beautifully,” said state Sen. Gwen Margolis, D-Miami. “We are going to lose a very big industry.”

In all likelihood, that won’t happen. The industry is looking at roughly the same amount of perks it received during the past four years, $296 million. Florida also has numerous economic advantages that appeal to out-of-state companies, such as low taxes, low regulations and right-to-work laws — an important factor in the union-heavy entertainment industry.

Sam Staley, director of the DeVoe L. Moore Center at Florida State University, told Watchdog.org that Florida’s economic, geographical and aesthetic appeal should be enough.

“The state of Florida is already a good place to build a business,” Staley, an economist, said. “Walt Disney World didn’t come here because they got a tax credit.”

Staley, who is researching Florida’s film incentive program, said out-of-state production companies often receive tax credits and sales tax exemptions, even when they don’t need or deserve them.

“These companies are very transient. They may be here a couple years and then they’re gone, but that’s if they’re a television series. In most cases we’re talking about film productions, which are just a couple weeks here and there. Production companies come in, spend money and then get steep rebates. Why are they more deserving than existing businesses that already have been investing and growing in Florida?” asked Staley.

“Dolphin Tale,” a movie about a dolphin with an amputated tail, starring Harry Connick, Jr. and Morgan Freeman, is widely considered a subsidy success story.

According to accounting materials provided to public officials by the film’s production company, Los Angeles-based Alcon Entertainment, the movie generated $17 million for the state and $7.5 million in wages for Floridians. Gov. Rick Scott and Tampa Bay area lawmakers were some of the project’s biggest fans.

Winter, the actual dolphin star of in “Dolphin Tale,” is a permanent resident at the Clearwater Marine Aquarium, where she lived before becoming a star.

But accurately measuring the full economic impact of subsidized entertainment projects can be tricky, Staley said.

“They’re good for people who want work doing what they love to do, but if it takes them away from what they’re already doing, then it’s not really new money,” he said.

Alcon received a $5 million tax credit while taking in $72 million at the box office, and another $23 million overseas, according to the Internet Movie Database. An additional $5 million in state money was allocated for the sequel, Dophin Tale 2, which is nearing preview.

The latest legislative proposal would shift some of the incentive program’s responsibilities from the Florida Office of Film and Entertainment to Enterprise Florida Inc., a public-private partnership of state businesses and government leaders that serves as Florida’s main economic development organization. 

Enterprise Florida, of which Detert is a board member, has been under fire by transparency advocate Integrity Florida, a nonpartisan government watchdog. Integrity Florida penned a recent report about the state’s entertainment incentive program and highlighted its lack of transparency — despite the claim of “unprecedented access” on the parent agency’s website.

The Tallahassee-based group does not take a position on the film subsidies program. It did, however, obtain film incentive records and posted them online.

As a film incentive summary shows, at the end of last year some $296 million in entertainment tax credits, scheduled to expire in 2016, were entirely spent. “High impact” television shows received $87 million, video game companies $60 million, movies $57 million and Spanish language Telenovelas $43 million.

“Unfortunately, it’s a no-brainer. Politicians will go with conspicuous privileges to a few people even if it involves inconspicuous costs borne to everybody else,” Matt Mitchell, a senior research fellow at the Mercatus Center at George Mason University, previously told Watchdog.org.

Amid concerns over the $300 million incentive limit and the 5 percent to 10 percent local government match, Senate lawmakers approved the bill Monday, almost unanimously.

“You’re going to have nothing, or you’re going to have this,” said Detert.

Contact William Patrick at wpat[email protected]

Published with permission from Watchdog.org.

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