| From: Milwaukee Magazine - June 23, 2010 |
Wisconsin, you could have been in the pictures!By Matt HrodeyOnce a state offering subsidies to filmmakers, Wisconsin has become an early dropout in the race to woo Hollywood. More than 40 states offer incentives, but Gov. Jim Doyle slashed Wisconsin’s subsidy program in 2009, leaving leaders in the state’s fledgling film industry complaining he cut too far. They contest a recent national study which found such incentives are usually a waste of money, arguing a revised program of incentives could pay off. The state subsidy program helped attract the 2008 production of “Public Enemies,” the Johnny Depp-starring gangster flick shot in Oshkosh. But a follow-up analysis by the state Department of Commerce concluded NBC Universal only spent $5 million in the state but received $4.6 million in tax credits. The Motion Picture Association of America, however, claimed the production resulted in a whopping $18 million in spending. Other estimates from state lawmakers advocating to keep the state’s film incentives put the figure at $7.5 million.  With the announcement last week that “Transformers 3” would be shooting in Milwaukee in July, it seemed like Wisconsin was having no trouble attracting film productions without the credits. According to Visit Milwaukee, the production “could pump more than $1 million into the local economy during its very limited shooting window.” The film crew, however, will be spending much more money during an extended stay in Chicago – six weeks – as it benefits from Illinois’ generous film credit program. States have gone cuckoo for the movie biz, but none can compare to Michigan, which offers tax credits covering up to 42 percent of production expenses. In 2002, just five states had film production incentives, but by early this year, the number had grown to 44, according to the Center on Budget and Policy Priorities (CBPP). A December report by the Federal Reserve Bank of Boston found such incentives don’t pay off. Robert Tannenwald, a former vice-president at the bank who know works at the CBPP, says state leaders are lured by “the buzz people get when they see celebrities in vans running through their streets and their town in movies” into offering up big bucks to Hollywood producers. “Everyone sees the celebrities, the fans and the cameras, but the cost is spread throughout the state.” The problem, he says, is that states end up paying the salaries of people who live elsewhere. “Why feed programs that benefit non-residents?” he says. Tannenwald applauds Doyle’s cuts. “Good for him,” he says. A recent CBPP report says, “There is lack of credible evidence showing that these incentives are a good investment for states. Research shows that alternative uses of the funds now devoted to these incentives could yield a better bang for the buck in terms of economic development.” Wisconsin now offers only a miniscule $500,000 a year grant program to filmmakers and video game companies. Local filmmakers say it’s not enough to foster growth in the state’s film industry. “I don’t know of anybody that’s been able to take advantage of it,” says Michael Graf, a director and owner of Madison’s Spot Filmworks, which produces commercials for Midwestern and national clients. It’s one of just a few commercial production companies in the state. That began to change in 2008 when the state’s incentives took effect, he says – but the new studios, camera rental companies and other businesses that sprang up wilted when the incentives died. Graf is also a board member at Film Wisconsin, a nonprofit that promotes the state’s film industry. Formed in 2005, it predates Wisconsin’s incentive program, but since the program got the ax, the group has fallen on hard times. “Film Wisconsin, as of late last year, has no paid staff. We still have a volunteer board and our priority going forward is working with the new governor and the Legislature to get the tax incentives restored,” says Dave Fantle, who serves as its executive director and chairman of the board. He’s also vice-president of public affairs at Visit Milwaukee. Fantle says Film Wisconsin received about $132,000 in state grants in 2007 and was also able to drum up some private donations. Today, the group reports having less than $40,000 left in the bank. Graf says Wisconsin’s incentives never catered to ad production companies like his or small filmmakers: “It kind of shut the ad industry out of the process. (The Department of Commerce) kind of got starry-eyed. They didn’t understand that the industry isn’t just a couple of Los Angeles studios.” Applying for the incentives was a long and laborious process, according to Graf, one usually only undertaken by large producers. He insists Wisconsin is missing out on building a recession-proof industry. “The movie industry has turned out to be remarkably resilient,” says the financial website 24/7 Wall Street. Says The New Yorker: “movies are, relatively speaking, recession-proof… in tough economic times Hollywood really does offer escapism for a relatively small price.” Some state legislators support an incentive program, though one more modest than the old one. State Rep. Tamara Grigsby (D-Milwaukee) proposed a program in 2009 that would only give tax credits for salaries and wages paid to Wisconsin residents. Only productions spending 35 percent or more of their total budget in the state would qualify. The electricians, gaffers and other Wisconsin employees hired by film productions usually spend most of their time working on commercials or small films, Graf says, because there aren’t enough blockbusters like “Public Enemies.” But these are the productions state incentives have overlooked, he says. Big productions are more likely to bring employees from out-of-state, often because of union requirements. He says the state’s incentives were beginning to benefit smaller filmmakers by growing Wisconsin’s infrastructure of film-related businesses when Doyle cut funding. “The state didn’t really get an opportunity to see how effective it was,” he says. Fantle agrees: “You want to develop a prudent program aimed at growing a state-based creative economy that brings in a steady stream of projects, both large and small. The state called ‘cut’ to the tax incentives long before any meaningful analysis or adjustments could have been made to the program.” |
