Louisiana Movie, TV Industry Fears Slowdown After Limits Placed on Tax Credits

Bobby Jindal Louisiana
Sean Gardner/Getty Images

As Gov. Bobby Jindal (R-La.) kicked off his presidential campaign on Wednesday, he’s taking some heat from the film and TV industry in his home state for signing legislation that puts new limits on production tax credits.

Last week, Jindal signed legislation that caps the amount of credits the state will redeem at $180 million each year. Industry groups fought the legislation, with some arguing that the restrictions will cause studios to look elsewhere.

In fact, Louisiana’s lieutenant governor, Jay Dardenne, who is running for governor, issued a statement saying that the legislation “creates unnecessary instability and uncertainty in the industry.”

Dardenne, who authored tax credit legislation when he was state senator, also said in his statement that “it pains (him) to learn that Disney/ABC has placed a moratorium on sending new projects to Louisiana until this is resolved.”

But a spokesman for Disney/ABC Television Group denied that was the case.

“To set the record straight, we have not imposed a moratorium on film and television projects in Louisiana, and we hope to produce more in the future,” he said. “Louisiana’s film incentives program has played an important role in our decision to produce content there and, with respect to future projects, we will assess the effect of the recent legislative changes on a case-by-case basis.”

Studios have taken advantage of the credit for recent movies like “Fantastic Four,” “Jurassic World” and “The Magnificent Seven,” enough to raise hopes that the state is becoming one of the country’s production centers along with California, New York and Georgia.

But as the state faced a severe budget shortfall this year, lawmakers have criticized the program, questioning its return on investment. The state’s Department of Economic Development conducted a study that showed that the tax credit program supported 12,107 jobs last year, but the state was getting back just 23 cents on the dollar.

The MPAA and the Louisiana Film and Entertainment Assn. challenged the methodology, and presented their own report showing that the program breaks even.

Patrick Mulhearn, executive director of Celtic Studios in Baton Rouge, said that the tax credit program became a target as lawmakers struggled to fill a budget gap, exacerbated by Jindal’s pledge not to raise taxes. “They started looking at all business incentives to see where they could cut,” he said.

Particularly problematic, Mulhearn said, is that at the last minute in the legislative session, a proposed cap on the amount of credits issued each year was instead switched to a cap on the amount of credits redeemed.

Critics of the legislation say that it means that recipients of tax credits may not be able to redeem them in a year in which the $180 million cap has been reached. Under the legislation, those unable to claim a credit against their tax liability do receive priority in the following fiscal year.

Louisiana allows tax credits to be transferred to another taxpayer, and there also has been concern that the value of existing credits will drop with limits on redemption.

“The film industry loves stability, predictability and bankability,” Mulhearn said. “Most people are shocked by this big change in the way things are done.”

The legislation also suspends the state’s buyback program for one year. That program had allowed tax credits to be cashed in for 85 cents on the dollar, but now that program will be frozen until the middle of next year.

The restrictions also include a $30 million cap on credits for any individual project.

Curiously enough, although the legislation places caps on the program, it also expands it in other ways. For example, the state offers a 30% credit, but the legislation also includes an additional 15% if a Louisiana company owns or options the project copyright for one year, and an additional 15% on Louisiana music.

Mulhearn said that he was “cautiously optimistic” that some of the problems with the legislation will be corrected as administrative agencies write rules on how to implement the program. He added that the state’s newly elected governor later this year could try to champion changes in the next legislative session.

A spokeswoman for the MPAA said, “Of course any changes to one of the most stable and predictable state production incentive programs in the U.S. cause concern. However, we will be working with the governor’s office and the legislature to clarify these changes and how the new provisions will be implemented.”

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  1. jc says:

    You guys are missing my point

    1. The nunbers im talkin about came from variety
    Hollywood repoter
    Deadline Hollywood
    Film la

    Look it up for yourself the report came out about a month ago.

    2. Your tax credits is the only reason why Hollywood producers are filming in your state. The moment those tax credits disappear so will Hollywood. If u dont believe me read about whats going on right now in

    north Carolina
    Michigan
    Florida

    These states either cut back or got rid of their tax credit program all together and look what happend those jobs vanished almost over night.

    As I stated earlier their are over a dozen or more film productions going in California that is not tax credit dependent. You guys cant say that for your state.

    • Rick says:

      “As I stated earlier their are over a dozen or more film productions going in California that is not tax credit dependent.”

      Hey, man, congrats on having so much work. Tell me again why I don’t deserve to work too?

      • jc says:

        Yes u deserve to work too im just saying if you re serious about having a career In television and film your gonna have to move to California weather u like it or not. Reason why? When things slow down on the film side and 1 hour dramas u can always work on sitcoms game shows and other non scripted shows like the voice americas got talent and others. Sitcoms are filmed mostly on sound stages the vast majority of all of the sitcoms in the country are filmed in los angeles. Also los angeles is number 1 for commercials being produced in the country u can work in commericals. So like I said if your serious u need to move here.

  2. Shocking says:

    Whoa. Those are some shocking comments.
    Funny how I never hear any LA guys complaining about the money they make on the road. In fact, all I ever hear is how they wish they were back on the road so they were making more money.
    And “Californians are the rightful film industry workers….” Ha! Please! Most of LA people aren’t even from LA- so there’s that. And most of them are only in the business because of dads, fathers, uncles…. Nepotism at its finest.
    Anyone who is good at their job is the rightful worker!
    And don’t even think for a second every worker in LA is the tops!
    Oh and if you are so bitter and angry that movies are made elsewhere- become a producer and get a life… STOP HATING AND STOP COMPLAINING!
    No wonder NYC can’t stand and LA guys!
    Way to go!

  3. jc says:

    Here’s another food for thought for all of the Louisiana and georgia idiots.

    Despite the fact that georgia and Louisiana offers an un cap tax program they still trail california in feature films made last year 2014

    California 22
    New york 13
    Georgia 10
    Louisiana 5

    You guys couldnt even beat new york which is more expensive to than any dtate in the country including california

    • Rick says:

      I’m not sure what your point it, JC. I live in Louisiana. I’m working. I like working. I’d like to continue working. I’m not concerned about whether we beat another area in production or not, only that I have enough work to pay my bills and put some aside.

      • Gio says:

        Yeah JC….We made way way more than five. Where are you getting these numbers? I worked on eight myself with so many more filming all over the state….this is not a fight between states you bonehead. I and we at local 478 wish every state has 100 films shooting. And we wish any state to have nobody threaten their tax incentives. We all stand together. Everyone in every state deserves to feed their families working anywhere they want to raise their families. Bobby Jindal will be sending thousands of us your way. Film is a gypsy sport but we would love to choose our home and stay working.

  4. Unsourced, double-hearsay article. Jay Dardenne was too damned lazey to call ABC/Disney to verify the rumor. David Vitter called and verified the rumor was FALSE!!! ALSO.. many states will lose productions because Kalifornia has instituted $330 MILLION in tax credits for the next five years so OVER $1 BILLION a year in productions will be heading back there. Nothing to do with us cutting back to a reasonable level based on our State’s budget and we’re still BETTER than 47 other States. Even Kalifornia, which has a budget SEVEN TIMES the size of LA’s, they don’t even give 2x the tax credits. LA.. the head of Hollywood South.. will still be up there near or at the top.

    • weak crews says:

      Just worked on a huge feature in New Orleans.

      The crew was Home Depot workers.

      Untrained, Late, and arrogant.

      None of them would last a day in Los Angeles,

      PS: Please expain why the producer paid me $45 an hour, $2100 a month housing, $440 a week in per diem and $250 a week car rental, and $1200 in airfare ?

      That pencils out to 3 times the cost of a New Orleans Worker.

      Why would a a penny pinchin hollywood exec. pay 3 times the rate for a worker ????

      • Rick says:

        There are several reasons you could have been flown in. One, you offer a very specialized skill that we don’t have a lot of down here. Two, the local crew has already been booked. Three, you’re friends with a department head or someone far up the food chain. As far as expenses: does your union stipulate rules for travel and housing for location shoots? That’s generally part of the deal. If we need a 1st AD and the locals are booked, we’ll fly someone in, put them up and give them per diem.

        Lastly, it’s a bit of a disconnect to read comments where you talk trash about your coworkers, claim how much better you are than them, then hear you accuse them of being the arrogant ones. If you want to place blame, put it on capitalism. Filmmaking is a high-risk investment. The industry, understandably, wants to reduce that risk as much as possible and hopefully get a high ROI. That’s why they come here. It leaves them more money to put into this film or the next. There’s is no need to attack your fellow brothers and sisters in filmmaking for wanting to keep working just like you.

    • jc says:

      Dude what u dont get is that the state of Louisiana has to rely on tax incentives to lure hollywood to shoot in your state.

      California on the other hand has about a dozen or more tv shows and movies that shoot in the state without receiving a tax credit. Heres the list if some of them

      How to get away with murder
      Scandal
      Greys anatomy
      Agent carter
      Marvel agents of sheild
      Brooklyn 99
      Modern family
      Blackish
      Intersteller
      Captain America the winter soldier

      Where ‘s Louisiana list?

      Another thing your delusional to believe the 180 million is enough.

      • IT CORPORATE WELFARE says:

        RIGHT ON BROTHER

        A NANO SECOND AFTER THE CORPORATE WELFARE STOPS HOLLYWOOD WILL BLOW THAT POPSICKLE STAND

  5. jc says:

    Guys I dont know if you been paying attention but california led all states in feature films made last year 2014 with 22 and most of those films did not receive a tax credit.

    Those other states and countries have to rely on tax subsidies in order for Hollywood to film in their backyard

    Their are countless of tv shows and films being made in California without tax incentives now that we have a better tax credit program things will be even better.

  6. Turn off the lights says:

    The Los Angeles Below the Line crews are too stupid to understand that they could shut all the big action pictures down in a nano second….
    WITH OUT THE SKILL FROM LOS ANGELES THE GREEEDY FUCKS COUND NOT MAKE ANY OF THESE BIG PICTURES WITH THE LOCAL IDIOTS THEY ARE GETTING FROM HOME DEPOT.

    Special effects, pyrotechnics, hydraulics, trick carpentry, paint, plaster, grip, lighting, engineering, foam sculpture…. and many more crafts that are required to make a big action picture.

    Home depot workers flipping cars on Transformers ? exploding shit on fast and furious ?

    NEVER –
    A BOYCOTT WOULD BRING THE” RUNAWAY PRODUCTION” TRAIN TO A SCRETCHING HALT –

  7. matteobject says:

    Louisiana is about to demonstrate to the world that even after 20 years and over a billion dollars in subsidies, they did not succeed in building a film industry, merely renting one.

    • Turn off the lights says:

      The sad part is the West Coast IA Unions are “Happy” about Runnaway Production.
      WHy you ask ?
      BECAUSE THE PRICKS IN NEW YORK THAT RUN THE IATSE WANT TO SIGN UP “NEW” MEMBERS AND COLLECT MORE DUES.
      3% of every paycheck off the top is the ransom that the IATSE takes
      ROBBERY
      The west coast IA brothers could boycott and crush runaway production in a heart beat.

  8. Terry says:

    I just read that last paragraph. Why is the MPAA concerned about Louisiana’s tax credit? They SHOULD be concerned about all the Californians who are the rightful movie industry workers whose jobs have been outsourced to these “rebate states.” Anything that brings movies back to California is good. I wish Louisiana, New Mexico, and Georgia would all reduce of cancel their incentives.

    • Turn off the lights says:

      Terry –
      YOU DONT GET IT !!!!
      the MPAA considers the “below the line” crew as DISHWAHERS….
      The MPAA members hate paying fair wages and benefits.
      The are CORPORATE WELFARE QUEENS –

    • Rick says:

      “They SHOULD be concerned about all the Californians who are the rightful movie industry workers”

      Slow your roll there, Sparky. I live in Louisiana. I’ve worked on more than seventy films. You know who deserves to be in the industry? The people who can do the work. California has a long, beautiful history with film, but employment is not a title to be bequeathed from parent to child.

      • Rick says:

        Corporate Welfare said “the producers will drop you guys like a cheap suit when the corporate welfare dries up.”

        Right. I think we all get that. That’s why we’re fighting to keep our tax incentives and why you’re here complaining: productions left California because it was cheaper to shoot elsewhere, and now that California is offering incentives, productions are coming back. Your problem isn’t with me or the state I live in, your problem is with productions watching their profit margins.

        I have no issue with your desire to work: you’re a film worker, likely a union member, just like me. Personally, I’d love for us all to be working. You’re welcome to work in my city and state as much as they’ll bring you in. And while I’d like to think that I’d be as welcome in Cali, from reading some of these, I’m not so sure. There is a lot of misplaced anger and derision here, born from concern for your future. Hunger does that. But I’m not your problem and I never will be. And trust me, if the work dries up here, I’ll be following it — not tearing apart people who are trying to feed their families just like me.

      • Corporate Welfare says:

        SLOW YOUR ROLL –

        Try a day player call in Los Angeles on a pilot –

        Every Louisiana worker I have met would not make it the first day.

        ITS ASSES AND ELBOWS IN LOS ANGELES – Your never late twice.

        My squad on the last picture in New Orleans rolled in at 6:20 many times.

        Since they New Orleans crew is GOVERMENT SUBSIDIZED I cannot say didly.

        When I have an entire squad of rookies, I am expected TO TRAIN THE New Orleans crew . That is working for 1/2 my rate.

        SO I AM EXPECTED TO TRAIN A GUY WHO WILL JOB ME AT 1/2 my rate –

        20 cents on the dollar return to the taxpayers for subsidizing SONY, MGM, Speilberg , Sumner Redstone, Michael Bay , James Cameron, ALL of whom are mega Millionaires

        .

      • Corporate Welfare says:

        Rick –
        Please explain why the producers are spending a shit load of money on EVERY MAJOR Picture to fly in Los Angeles Coordinators and foremen ?

        For each Los Angeles crew member they are spending 35% higher wages, $440 a week in per diem, $2100 a month in hotel, $500 a month in a car, $1200 in airfare, and $300 in Fed-X expenses…

        THE PRODUCERS HAVE BEEN USING LOS ANGELES PERSONEEL FOR 15 YEARS IN ALL THE RUNNAWAY PRODUCTION LOCATIONS.

        There is a very good reason my friend.

        PS: the producers will drop you guys like a cheap suit when the corporate welfare dries up.

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