Changes in Pennsylvania's film, television tax credit worry some in industry
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The first trailer for "Jack Reacher" was released last week, showing Tom Cruise careening over the 10th Street Bridge and fighting bad guys on Smallman Street in the Strip, and serving as another sign of Pittsburgh's resurgent film industry. A few days beforehand, state lawmakers made tax changes that could impact the industry statewide.
Lawmakers tweaked Pennsylvania's 7-year-old film and TV tax incentive program during budget negotiations last month, sweetening the pot for large soundstages and provoking worries among some in the industry about a negative impact on film jobs.
Officials across the industry credit the tax for bringing films such as "Jack Reacher" or Taylor Lautner's "Abduction" to Pittsburgh, or even to create the atmosphere for blockbusters like "The Dark Knight Rises" that did not seek the incentives. Most would like the state to increase its $60 million pool of annual incentives to its former $75 million level or higher to attract more filming.
Since 2007 the state has offered producers who film 60 percent of their productions within the state a 25 percent credit on taxes. Through September 2011 the state awarded $242.5 million in credits that leveraged $1.4 billion in local economic activity and nearly 14,500 jobs, according to a report the state film office filed with the General Assembly.
In a vote on state tax rates June 30 -- in the same bill that included tax credits for a proposed petrochemical plant in Beaver County -- legislators bumped the credit up to 30 percent for those filming at soundstage facilities that have at least 7,500 square feet of clear production space. They also allowed the credits to be awarded over multiple years, meaning they can be issued to television series for the first time: Until now only one-off TV productions such as reality and cooking shows have been eligible for the credits.
The changes should mostly benefit two soundstages in Pittsburgh and greater Philadelphia: 31st Street Studios in the Strip District and Sun Center Studios in Delaware County. Strengthening them will help make the cities a one-stop shop for Hollywood, said Christopher Breakwell, the owner of 31st Street.
"The commonwealth wants things to go toward permanent investment in the state," Mr. Breakwell said. "If we want to build this business, we have the bones with the city, the geography, the unions and now soundstages."
Others in the local film industry aren't so sure. Every year the $60 million in available credits are eaten up fast, leaving about three-quarters of applicants with no incentives. Giving soundstages an extra 5 percent of the credits will chew them up even faster, critics say, and may drive work away from film location shooting and the businesses (such as catering and trucking) that live off that kind of work.
"The problem with the program is it's too popular," said Robin Ross, a lobbyist for the Pennsylvania Film Industry Association. "The question is if accelerating spending for studio work won't drain the work faster and hurt the jobs."
The various stakeholders in the state's film industry -- unions, casting agents, actors, civic boosters -- have long worked in tandem to preserve the credits, especially when the state's ailing budget nearly terminated them in 2009. But the latest changes have opened some rifts among industry professionals, with the film association (chaired by David Haddad of Haddad's production rentals in Pleasant Hills) urging members to lobby Senate Majority Leader Dominic Pileggi, R-Delaware, against the bill, while others, like Mr. Breakwell, favor it.
Pittsburgh Film Office director Dawn Keezer could not be reached for comment on the tax change.
First Published July 8, 2012 12:00 am