Maine looks good on camera, but hold off on bigger tax credits — for now

Robert Mrazek (left), writer and producer of the film &quotCatatonk Blues," works with director Jared Martin on Monhegan Island, where scenes from the film were shot.
Courtesy of Tom Hurd
Robert Mrazek (left), writer and producer of the film "Catatonk Blues," works with director Jared Martin on Monhegan Island, where scenes from the film were shot.
Posted Sept. 25, 2013, at 1:04 p.m.

Apparently, Maine is on track to have a good year on camera. The year isn’t complete, but the state has already certified 14 productions for filming in the Pine Tree State this year. That’s up from eight in 2012. The state played host to 17 productions in 2011.

The 14 productions translate into $3.7 million in direct spending on Pine Tree State productions this year, more than double the $1.5 million spent to produce Maine films in 2012.

When the entire economic picture is considered, the numbers are bigger. University of Maine economics professor Todd Gabe calculated earlier this year that the film production and photography sectors generate nearly $118 million annually in economic activity in the state, more than 2,000 full- and part-time jobs, and $33 million in wages.

Maine has a modest tax incentive package in place designed to lure productions to the state, but it doesn’t measure up to the more generous offerings in place in Massachusetts, North Carolina and elsewhere. That appears to disqualify Maine as a filming location for many large productions — even those with storylines set in Maine.

“We would view Maine as not competitive,” Vans Stevenson, senior vice president of state government affairs for the Motion Picture Association of America, told BDN reporter Kathleen Pierce.

Conventional wisdom would tell policymakers that Maine should expand its Visual Media Incentive Plan to lure large productions to the state. While production crews are in Maine, they can have an economic impact that doesn’t go unnoticed — from frequenting local businesses where they’re filming to hiring local production staff.

But policymakers excited about the prospect of attracting more production activity to Maine would be wise to wait just a little longer before proposing the next expansion of the film production tax incentives program. (Lawmakers earlier this year rejected a bill designed to attract larger-scale productions to the state.)

For the first time, policymakers this winter are poised to have data in hand that will allow them to judge which of the state’s economic development tax initiatives are producing a return on investment. While the Maine Legislature has added dozens of tax credits, exemptions and refunds to the tax code over the years, they’ve had no mechanism to force them to revisit those carve-outs to determine whether they’re meeting their job creation goals. As a result, the state has likely been investing in ineffective and unneeded programs and missing other investment opportunities that could bear fruit.

The state Department of Economic and Community Development has hired an outside firm to review eight economic development initiatives in state law — including the state’s six-year-old film incentive — and determine whether they’re creating jobs, as intended. That review is due to lawmakers by Feb. 1, 2014. It should provide hard data to help lawmakers decide whether to invest in a larger incentive program.

As lawmakers await that program review, a 13-member panel of legislators, business representatives, tax experts and others have started work on finding $40 million in tax breaks to eliminate or scale back — a requirement of the two-year state budget. More importantly for the long term, that same group is also charged with developing a regular evaluation for those incentives.

It’s crucial — and all too rare — that policymakers in Maine and elsewhere have data to help them judge whether states are making smart investments in economic growth initiatives. It’s also crucial that policymakers act on that data by ending ineffective programs, redesigning programs that could become effective, and continuing — even expanding — the programs that are producing a return on investment and have the potential to have an even greater economic impact.

It appears on the surface that Maine’s visual media incentive program is providing a helpful hand up to producers interested in filming in the Pine Tree State. In turn, those productions are generating some needed economic activity in the state. Whether producers would still film in Maine, whether a larger incentive package would attract even more productions to Maine, and whether the state’s budget could handle a larger incentive are all questions to which lawmakers need answers before taking action.

Perhaps how lawmakers handle the restructuring of Maine’s film credits could set an example for how Maine makes decisions on its tax incentive programs in the future.

http://bangordailynews.com/2013/09/25/opinion/editorials/maine-looks-good-on-camera-but-hold-off-on-bigger-tax-credits-for-now/ printed on July 22, 2014