Incentive program meets with unexpected industry aid
South Carolina’s production tax incentive program met with some unexpected industry aid in the face of a gubernatorial veto on Tuesday afternoon: “Army Wives” thesps Catherine Bell and Kim Delaney campaigned for their show’s tax break at the statehouse.
The actors asked S.C. legislators to support an increase of the state’s production tax credit. It must have been a bravura performance: The state senate voted 28-13 to override Gov. Mark Sanford’s veto, adding its voice to the override approved by the house of representatives and all but ensuring that the credit increase will go through. The measure temporarily bumps film production tax credits from 15% for in-state wages and 15% for supplies to 20% for wages and 30% for supplies for the next fiscal year. Increases to the program are made by individual annual proviso, rather than permanent amendments, and so the program comes under scrutiny every year.
“(W)e should not be increasing the incentives we give to Hollywood film companies in a year when we’re making such drastic cuts to core government functions,” said Gov. Sanford (italics his) in a 29-page statement breaking down the reasons for vetoing items in the budget.
Sanford is not alone in having to cut potentially valuable programs from budgets that recession-damaged state economies can’t support. Also on Tuesday, New York Gov. David Paterson began cutting away at spending items in his state’s budget as well, calling the proposed legislation “irresponsible and unbalanced.”
As usual, many argue that the benefits of the tax incentive programs outweigh the potential lost revenue. In S.C., even those opposed to the increase didn’t want to kill the program. “It wasn’t a veto of the entire program by any stretch,” said Gov. Sanford’s communications director Benjamin D. Fox. “We have limited state dollars to allocate and we felt that bumping up the current program wasn’t the best use of those.”
But some argue that productions have tightened their belts in the grim economy, as well, and that their shows might not even get made in the first place without the tax breaks. Harry Bring, who produces Lifetime skein “Wives” (which just finished its fourth season) this week told a reporter that reductions to the tax program “probably could kill the show.”
The program may seem small by other states’ standards — last year netted $32 million in revenue for the state, and the total since 2006 is estimated at $100 million — but S.C. film commmission spokesman Marion Edmonds said that the program’s contributions to local infrastructure are important, too. ” ‘Army Wives’ in particular has provided an ongoing structure that’s very useful, and several of our educational institutions — because of that year-in-and-year-out (presence) — have been able to develop a lot of local talent.”