I am in strong favor of HB 196, the Film Tax Incentive, recently passed by both legislative houses of our State.

HB 196 is not an abstraction. If the bill was signed by Gov. Strickland, films would come here, namely the $100 million movie about the Torso Murders. Veto the bill, they will not. It’s that simple. The Cleveland-based story will shoot in Michigan instead, where they have a tax incentive.

The chief complaint from the Governor’s office has been that HB 196 would, in the short term, lose the state money. If this line of thinking is true, no city in Ohio should have built ANY sporting arena professional or collegiate. It would be just hundreds of millions we flushed away without any immediate economic benefit, right? This type of thinking would have you believe that The Horseshoe would lose Columbus money, or that building Jacobs Field in the 1990’s didn’t help the city of Cleveland. To help our state we must be creative and think long-term. Gov. Strickland’s office has made no mention of any long term repercussions the bill would have towards economic development to the state. This ignores the very point of the bill, not to turn a quick buck from film productions, but to build a self-sustaining long-term film community and industry.

House Bill 196 is a Republican sponsored bill. Gov. Strickland’s, and the state’s Democratic Party’s, resistance to this bill smacks much more of political hardball rather than fiscal concern. When pressed at the Ways and Means committee hearings, the Governor’s tax team didn’t really have detailed answers to the members’ questions. In both the House and the Senate, the bill has been greeted by largely party –line votes. So, is this REALLY about crafting a tax plan that benefits the people of this state, or making sure the Republicans do not get a “win” before the first of the year? I have seen Ivan Schwartz’s approach with this bill and if anything, he would LOVE for someone else to take up the fight. He is NOT after more headlines. Conversly, I would not trust one word that would come from the newly formed Ohio Film Commission, which is an office of the current Governor.

I’d love to work on more movies as well, since its my primary source of income.

A lot of this is noise that is being made to put Ivan Schwarz and the Cleveland Film Commission in the papers, again. It’s a strategy Carmody perfected and which Schwarz, unfortunately, is following. And all this talk about space to film movies in the convention center is mind-numbing for us who have actually worked on these movies. The space is not conducive to much more than office space. Also, Spiderman 3 shot like thirty seconds of film, here, so maybe we don’t want to use that as the example of business that will save Cleveland.

What’s more frustrating is all this talk about Nehst leaving if we don’t give them some incentive to stay. Who the eff is Nehst, anyway? And I don’t want to hear about how their founder has some credit for location scouting for some HBO show or something. What have their producers done to show their worth that we should invest in them?

Sadly, those covering the local film scene do not ask these questions and do not understand how to see through the smoke and mirrors of Hollywood spin.

I’d love to have more movies filmed here. Don’t we have a commission to look into that sort of thing?

Look, let’s assume that the Film Commission folks have a larger strategic vision and that the tax credit plan is just part of their plan. If that’s true, they haven’t explained it very well — at least any place where I can find it. (Certainly not on their website.) All I’m hearing is: We must have this tax credit NOW or we’ll lose “Torso”! With all respect, that’s not much of an argument for rushing through a long-term structural change in the tax treatment of an industry.

(Yes, I know HB 196 has been sitting around in a House committee since May 2007. But the committee didn’t budge on it until a month ago. You can hardly blame that on the governor.)

Between the lines, it looks to me like this is really about the Commission’s negotiations with Nehst to get them to site a production facility here (i.e. in free space in Public Hall). This might be a terrific idea and the Nehst people are probably wonderful partners. But Nehst Creations didn’t exist when HB 196 was written (it was introduced in May 2007, the same month as Nehst’s formation was announced) and the City just announced the Public Hall offer two months ago. So this great potential deal can’t survivc a few more months of working with Strickland, Fisher and the new General Assembly leadership to work out a subsidy strategy they can support?

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Do I understand correctly that the intention of the bill is to allow a production company’s investors, by selling the tax credits to people with enough Ohio income to use them, to recapture up to 25% of the money they spend on Ohio production — including travel to the state, salaries paid to people who are here for a few weeks (“resident and nonresident cast and crew wages and fringe benefits” ), “out-of-state goods purchased or leased and ultimately consumed in full or on a pro rata basis in this state”, etc.? So that, in effect, the state would be offering to pay up to 25% of the company’s gross costs of filming here?

And if I do understand it correctly, isn’t it possible that the proportion of a film’s “Ohio shooting budget” that actually goes to local actors, technicians, service contractors, hotels, etc. could actually equal less than that 25%?

Bill Callahans last blog post..Cincinnati sues Deutsche, Wells Fargo

The pie in the sky jobs and economic activity for abatements have proven over and over again to be a mirage.

The fact that the tax breaks can be sold to profitable businesses to reduce their taxes makes this just another gimmick for those who have to get more and lay off their taxes on the rest of us. It’s bad public policy.

Since we have thrown poor people off of welfare I don’t see the percentage of creating new welfare programs for the non-poor, particularly when they should be making their own way.

Your argument is similar to the one for casinos, others have it so we should too.
It’s not a winning argument for me.

Finally, the monitoring of abatements has never been satisfactory in my experience.
“Documenting” by the governor’s office or any other political body doesn’t impress me at all.

I thank you so much, and I truly hope people will urge Governor Strickland to change his mind on this point.

Bill & Roldo – I respect both of your opinions a lot. But as someone who examined this issue exhaustively for a decade, I have to say I’m mystified by the Governor and Lt. Governor’s approach to this issue.

Roldo – to answer your question first – the law behind the arts tax specifically directs the revenue only to non-profit, Cleveland area organizations who go through a competitive process. It can’t be used for the private sector, and doesn’t have any bearing on the film industry (or other private sector economic development, for that matter).

Bill – and All: This is an approach Democrats ought to love. First – companies don’t see a penny on this kind of break until *after* they have brought the jobs, spent the money, and documented it to … the Governor’s Office! That’s dramatically different from most other tax breaks, abatements and grants given over the years where taxpayers are asked to put up money first in the hope jobs will come.

Next – these jobs high value – mainly union jobs with great pensions and benefits. On any movie or commercial shot here, it’s local truck drivers, carpenters, painters, electricians and others on the job. As I understand it, the AFL CIO decided to support this after considerable study – and they can attest to the wages, pensions, and other benefits involved.

Finally, the underutilized Cleveland Convention Center has already proved to be attractive to film and television production. It’s within 75 minutes of New York and is considerably larger than all but one of New York’s motion picture facilities. The combination of the Convention Center with the credit would make Ohio unusual in the country and would catalyze much more than short term projects. This pairing wouldn’t make Ohio one of 50, but one of about five states outside of California (with New York, New Mexico, Florida and North Carolina) to have both the tax and the physical infrastructure to gain a significant share of one of few growing blue collar industries in the U.S.

(Check out http://www.youtube.com/watch?v=T5NgSMzB2D8 for background to see an example – Spider Man 3’s use of the facility).

So to add this all up: In an economically struggling state, there’s an opportunity to turn a giant, currently underperforming downtown asset into a magnet for primarily union jobs in the heart of one of the poorest cities in the country – and companies involved will only see a break after the jobs have been created.

If there’s an alternative that better leverages good jobs and holds companies to a higher standard of accountability for government assistance, Ohio deserves to see it immediately.

Until recently, the lead Democrats on House and Senate Finance agreed.

I’m talking about not dealing with each project individually, but allowing them to come to Ohio and have permanent staff doing project development here, as opposed to just dealing with movies as they come along? If you can tell me how not doing a tax credit but instead say, getting money from a non profit or the arts fund, would make the Film Industry want to come here?

I’ve watched the abatement issue since the 1970s and see that it has become – instead of an instrument that might serve a purpose – a right demanded and extended without any real discrimination of whether it is necessary. It become an automatic, it has spread from deprived communities to those not deprived, thereby dimishing the original purpose.

Also, there are many foundations and other charitable groups that hold fantastic amounts of money in Cleveland. If it is important to offer give-aways to promote films, why not via this private money, which really is evaded tax revenues.