Productions are flocking to the Delta — but it almost wasn't so
Over the coming months, Louisiana will host two big-budget films, "Pirates of the Caribbean 5" and "The Fantastic Four."
They're just the showiest carpetbaggers to a state that has recently earned the moniker "Hollywood of the South." Also hitting the Delta will be a new take on the "Left Behind" series starring Nicolas Cage, the third season of "American Horror Story" and the sequel to "Hot Tub Time Machine."
But it almost wasn't so, after some state politicians mounted an effort to scale back Louisiana's production incentives.
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A center of Cajun culture, the blues and debauched Mardi Gras celebrations has become a magnet for the movie industry — one whose pull is intensifying. Through the first six months of this year, 72 projects applied for certification from the state, up from 41 during the same period the previous year.
They're not coming for the gumbo. Producers are targeting Louisiana for its tax subsidies, considered to be among the most generous incentive programs in the country.
"This program sells itself," said Scott Niemeyer, an executive producer on "Pitch Perfect," who has made three movies in as many years in the state. "I wouldn't change a thing about it … it really is a case of if you build it, they will come."
Russ Nissen, director of film incentives at Ease Entertainment Services, said the state's only domestic rival when it comes to incentives is Georgia, which offers a nearly identical suite of inducements. Georgia has more soundstages, he claimed, but Louisiana throws in additional incentives for hiring residents and makes it easier for producers to transfer credits.
"Economically it's a good place to shoot," Nissen told TheWrap. "They have developed a lot of infrastructure over the years. Their only challenge is to grow as fast as the productions that come in. The incentives are always attractive, you just have to plan and see about the availability of crews. That's a good problem for them to have."
A program that currently offers a 30 percent transferrable rebate for money they spend in-state — as well as an additional 5 percent labor incentive for hiring Louisiana residents — almost got a severe haircut.
During the most recent legislative session, a series of proposals were put forward that would have made either minor cosmetic tweaks or wholesale changes to the program.
One, a proposal by Gov. Bobby Jindal, would have capped the subsidy as it applied to above-the-line salaries exceeding $1 million, while another would have cut the incentives in half. The governor eventually decided to pull his plan over concerns it would negatively impact production in the state, while the other proposal never even came up for committee hearing.
Other legislation to tweak the incentives slightly made it through the state's House of Representatives but was never taken up for a vote in the Senate.
Both proposals are effectively dead, at least until 2015, because Louisiana's constitution bars lawmakers from bringing up tax bills on even numbered years.
Keeping the incentives in place was a big reason Louisiana was able to get both "Pirates 5" and "Fantastic Four," an individual with knowledge of the decisions told TheWrap. News that they would film in Louisiana hit after threats to the tax-incentive program dissipated.
"One of the hallmarks of the Louisiana program has been its stability," said Will French, president of the Film Production Capital and the Louisiana Film and Entertainment Association. "Producers can bank on the fact that if they shoot here, they'll qualify and they know exactly what the benefits will be."
"If you across the country, the attitude toward incentives has started to reverse, and you have states like Michigan or Connecticut pulling themselves out of the game or pulling dollars," he added.
French predicted that the day is approaching when Louisiana or Georgia will surpass New York as a production hub.
Not everyone is enamored with the credits. The non-profit advocacy group the Louisiana Budget Project estimates the state spent $231 million in 2011 on incentives and roughly $1 billion over the last decade — with little to show for it.
"Film tax credits are a wonderful deal if you're in the film business, but it hasn't been a good deal for the state," Jan Moller, director of the Louisiana Budget Project, told TheWrap. "Every dollar spent on film incentives is a dollar that can't be spent on roads, on education, on health care or on any of the very important things that are being squeezed badly."
French counters that looking at the issue in this way fails to account for the amount of economic activity that film production inspires. He notes that a 2013 report by the Louisiana Department of Economic Development found that the local production generated $1.1 billion of spending and contributed more than $770 million in household incomes while creating 14,350 jobs last year.
"This is not designed to turn a profit, it's meant to put out an incentive to encourage economic activity," French said. "The citizens of Louisiana draw a huge benefit as a result and they want this industry to come here."
Even Moller accepts that the program is popular. He said he doubts that politicians in the state have much will to change the program.
"I wish our arguments about the cost to the state had gotten more support, but the fact is that people like the movies, it's a clean industry and people like seeing stars in their midst or catching a glimpse of them in restaurants," he said.
In this case, the next star they see may be Johnny Depp.