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Cut! Mississippi film incentives burden taxpayers

By   /   March 7, 2014  /   No Comments

By Steve Wilson | Mississippi Watchdog

Mississippi and other states are furiously stocking their “green rooms,” collecting and arranging tax incentives and other perks — the proverbial sparkling water — to lure Hollywood producers and directors.

It’s big business, and Mississippi wants its share.

Forty-seven states now offer some form of tax incentive for films and TV.

Mississippi’s 25-percent rate on in-state investments compares favorably with the surrounding area, with a separate employment rate incentive of 30 percent for taxable salary paid to state residents and 25 percent for out-of-state workers.

A legislative committee early this week passed House Bill 1371 , which would add to the state’s tax incentive — capped at $8 million per film and $20 million per year — for film projects in the state.

GET TO SHOOTING: A legislative committee early this week passed House Bill 1371 , which would add to the state's tax incentive — capped at $8 million per film and $20 million per year — for film projects in the state.

GET TO SHOOTING: A legislative committee early this week passed House Bill 1371 , which would add to the state’s tax incentive — capped at $8 million per film and $20 million per year — for film projects in the state.

Another more expansive measure failed Tuesday. House Bill 733 died in committee Tuesday after questions were raised about the financial liability for the state. The bill would have made the state liable for losses for qualifying film production companies via a loan guaranty program. If a film made less than its production costs, the state would have paid 75 percent of the difference, up to $20 million per year.

But now, Hollywood producer Adam Rosenfelt has announced plans to bring a new movie to Jackson and aims to build a new film studio in Mississippi.

Guess who gets the bill?

The  taxpayer-funded Mississippi Development Authority is offering five programs to help supply capital for new businesses, some $500 million since 2009 that aren’t subject to auditor oversight, according to Mississippi State Auditor Stacey Pickering. Most likely, taxpayers will foot a large chunk of the bill. But that’s not the only downside, said economist Matthew Mitchell of the Mercatus Institute at George Mason University.

“These type of taxpayer-funded privileges lead to a number of chain reactions in the economy,” Mitchell said. “They force everyone to pay higher taxes, because when a group seeks a privilege, it’s never the last time they ask for a privilege. They build a more sophisticated political arm designed to secure more privileges. It means capital flows to a politically connected few rather than the group that can pass the market test of satisfying demand at the lowest possible cost.”

The Canton Convention and Visitors Bureau owns a state-of-the-art studio, the Mississippi Film Studios at Canton, which offers 36,000 square feet of production space on a 31-acre site. RoadTown Enterprises, which also operates a studio in Atlanta, partners with the bureau to operate and help develop the studio.

Canton Convention and Visitors Bureau photo

LIGHTS, CAMERA, ACTION! Mississippi has a state-of-the-art studio near Canton, but Hollywood producer Adam Rosenfelt wants to bring another facility to the state.

The studio was built in 1995 for the filming of “A Time to Kill” and was sold after production wrapped. The Canton Convention and Visitors Bureau bought it, and it reopened in 2011 after an extensive renovation, including a new roof and a new concrete parking lot.

Jo Ann Gordon, the executive director of the bureau and Canton’s liaison to the film industry, said she’s already in talks with three film projects considering the studio and the surrounding area for filming.

“I think it’s an economic engine for the state of Mississippi,” Gordon said. “I think all of Mississippi will reap great rewards from it. It meets all of the requirements of the industry.

“Just because you build a studio, it doesn’t mean they’re (filmmakers) are going to come,” she said. “Filmmakers are going to come to the state because they’re location-driven, but having a studio here is just one more tool in the toolbox for a filmmaker.”

Not all agree.

Canton resident and former mayoral candidate Jerry Lousteau said the facility is vacant most of the year and is a drain on taxpayers. Lousteau’s movie credits include work as music director on “Ballast,” crew work for “The Curious Case of Benjamin Button” and as a producer for the short film “Duct Tape” and the Hurricane Katrina documentary “Renaissance Village.”

“Since it’s getting public money, it’s still open, but if it were a private business its assets would be sold on the courthouse steps at auction,” said Lousteau, who owns the AM radio station WGMO in Canton and is a freelance movie services provider in addition to being a long-term critic of the Canton studio.

“When it opened, it would need filming to take place at least nine to 10 months out of the year to make it viable,” he said. “As it is, filming goes on there maybe one to three months out of the year.”

Steve Wilson photo

A STAR: The courthouse in Canton, Miss. was used as one of the filming locations for “O Brother Where Art Thou,” one of several major Hollywood films shot in Mississippi.

James Franco’s production of William Faulkner’s “As I Lay Dying” was shot, in part, at the Canton studio in 2012 after receiving a tax incentive from the state of more than $784,000. The crew of the James Brown biopic “Get On Up” used the studio for filming and as a base camp. Part of the Brown film also was filmed in other parts of the state.

Gordon said the studio’s facilities have received rave reviews from filmmakers.

“Every filmmaker that has come to town has complimented our stage,” Gordon said. “They said it’s one of the best stages they’ve ever worked on and we’re very proud of that.”

But it hasn’t come cheaply.

Lousteau estimates the facility has received $8 million in upgrades since its opening and is costing taxpayers thousands of dollars in maintenance per month.

“I think these politicians just get stars in their eyes,” Lousteau said. “Most of that money goes out of state. If you go over to the studio, you’d see all of the tags from out of state. I love the movie industry and I wish it could be bigger in this state, but it just ain’t going to happen.”

Contact Steve Wilson at swilson@watchdog.org

Update: This story was updated March 7 to reflect the $500 million is for programs that aren’t subject to the state auditor’s oversight.

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Steve Wilson is a writer and a journalist. He serves as the Mississippi Bureau Chief for Watchdog.org. Beginning his career as a sports writer, he has worked for the Mobile Press-Register (Ala.), the LaGrange Daily News (Ga.), Highlands Today (Fla.), McComb Enterprise-Journal (Miss.), the Biloxi Sun Herald (Miss.) and the Vicksburg Post (Miss.) His bachelors degree is in journalism with a minor in political science from the University of Alabama. He served four-plus years in the United States Coast Guard after his high school graduation and is a native of Mobile, Ala.