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Political currents in a number of financially troubled states are sending a chill through Hollywood -- a tax-incentive chill.
Worry that such vital incentives will be cut significantly -- or entirely -- have producers and studios worried about how they will finance domestic film and TV production, with several important tax-credit states seriously reconsidering their programs.
"We're at a critical stage right now," Rob Carliner, who produced the Oscar-winning "Crazy Heart," which was filmed in New Mexico, told TheWrap. "The state of the incentives all over is changing radically, so we’re all communicating with one another just to make sure we have the most accurate, up-to-date information.”
“They are as important as any talent attachment,” he said. “They are critical. You just can’t make a movie in this environment without chasing the rebates. It’s just not economically viable.”
Indeed, New Mexico is just one of a number of states reviewing their incentive programs. There, the state's newly elected Gov. Susana Martinez has said she wants to cut that state’s popular tax credit from 25 percent to 15 percent.
And in Michigan, Gov. Rick Snyder, a Republican elected this past November, has ordered a review of the state’s incentive program -- one of the most popular and generous in the nation. Snyder said he wants to reduce the 42 percent credit, which currently makes it the second most generous in the nation after Alaska and its 44 percent credit.
Both governors cited budget concerns in calling for the cuts.
Even small incentive programs attract filming. The movies “Winter’s Bone” (pictured) and “Up in the Air” were filmed in Missouri. But that state, too, is considering ending its incentive package, said state Sen. David Pearce, a Republican who favors the incentives.
“Right now, there is somewhat a backlash against tax credits,” he told TheWrap. “The governor has not included it in his budget package for the year … For this upcoming year it’s on life support.”
Bruce Deichl, co-founder of Tax Credits LLC, a New Jersey company that helps filmmakers get incentives, said that without incentives in the United States, more filming will occur in Canada and Europe.
He said that each state that has incentives benefits from them. "Why did Disney shoot the movie 'Annapolis' in Philadelphia instead of Maryland? Because of the film credit," Deichl said.
Peter Dekom, an entertainment lawyer in Los Angeles and consultant for New Mexico, said that tax incentives are "mission critical" to motion pictures, and that they will continue in some form -- somewhere.
Fortunately, not all the news is bad.
Vans Stevenson, senior VP for state government affairs at the Motion Picture Association of America, pointed out that although the Illinois legislature recently increased the state’s income tax, “their tax credit was not even on the table,” and that New York, North Carolina and Florida recently increased their incentive package.
