By Shelby Sebens | Northwest Watchdog
PORTLAND – The producers of shows including “Grimm” and “Portlandia“ get tax rebates for filming in the Beaver State – a benefit more TV shows or commercials could enjoy if Gov. John Kitzhaber gets his way.
Kitzhaber wants to double the film incentives Oregon doles out, from $6 million to $12 million a year. Proponents say it will bring more filming to Oregon and thus more jobs. But critics argue it’s just more of your money in Hollywood’s pocket that could go to other needs in the state.
The incentive program already doles out a hefty chunk of change, about $2.2 million to “Grimm” in August, for example, but officials say it’s not enough and that the money to go around is running out.
Vince Porter, executive director of the Governor’s Office of Film and Television, said even though the state has negotiated with some productions to pay less than they qualify for, the Oregon Production Investment Fund is still running dry.
“We’ve reached a point where the $6 million doesn’t satisfy everyone,” he said. Porter calculated that the flow of scripts and projects proposed into the film office will eat up even the $12 million budget in a month.
Oregon’s incentive program gives cash rebates to companies based on how much they spend here. For every dollar production companies spend on goods and services, producers get back 20 cents. For every dollar spent on wages to local or out-of-state workers companies receive 10 cents.
Money to fund the incentives comes from income tax credits auctioned off by the state.
“I argue that our program on many, many different levels is one of the most efficient,” Porter said, adding that it’s less generous than the tax breaks offered by many other states.
Critics, however, argue the high demand is a sign the state is giving too much away.
“The incentive is too generous if it’s not lasting,” said Joe Henchman, vice president of legal and state projects at the Tax Foundation, a conservative, D.C.-based tax research group. Henchman said a better solution would be to lower the rebate. “Demand is really high. You’re pricing it wrong.”
Henchman said independent studies have shown that states get a low return on investment for money spent on film incentives. In 2012, he said, states spent $1.5 billion on film incentives. States spending the most were New York, $400 million, and Louisiana, $200 million.
Officials say Oregon’s $6 million fund can’t compete with those states for major films so they have focused their recruitment efforts on TV shows and banked on the state’s unmatched scenery.
The state saw a 13 percent increase in film industry jobs from 2009 to 2011, growth driven in part by tax incentives, according to a study conducted by the Northwest Economic Research Center of Portland State University.
States typically use jobs numbers to justify the incentives. But Henchman argues the jobs produced are often temporary and always at risk of leaving the state.
“As soon as they get a better deal somewhere else they’re gone. I’m kind of surprised Oregon taxpayers are willing to be blackmailed like that,” he said. “All it really does nationally is transfer 1.5 billion from taxpayers to move to other states. It’s not really in the best interest of taxpayers.”
Jody Wiser, policy advocate for the progressive group Tax Fairness Oregon, said it’s unfair that the governor is proposing to double funding for the film industry while offering smaller increases for other programs.
“That bothers me,” she said. “I think we’re probably getting back most of the money we put out, but if we educate a child or we help a kid go to college we’re getting more than the money we put out,” she said. “It seems like the governor is using up the extra money we’re expecting in ways that I wouldn’t choose.
“At what point do we need to stop stimulating something?”
The state in August gave incentives to these productions:
- $2.15 million: “Grimm”
- $750,000: “Paranorman”
- $3.35 million: “Leverage”
- $73,753: “The A List”
These shows are expected to get refunds pending final accounting:
- “Jingle All the Way”
- “Night Movies”
- Other independent films and productions