Runaways pique pol

Miffed House Speaker backs pic tax breaks

WASHINGTON — House Speaker Dennis Hastert (R-Ill.) is still annoyed that Oscar winner movie “Chicago,” was filmed across the border in Toronto and has vowed to do something about it.

Hastert plans to move tax incentive legislation, which has been stalled on Capitol Hill since 2001, this summer. The current proposed legislation, sponsored by Rep. David Dreier (R-Calif.) and Howard Berman (D-Calif.), would create a 25% tax credit on wages for projects with budgets under $10 million and 35% in low-income areas in order to compete with the incentives and lower costs in foreign locations.

“It’s going to happen this year,” a knowledgeable senior GOP aide affirmed, noting Hastert plans to move it in the early summer after work is completed on the tax cut package and Medicare reform bill.

Rebuilding Illinois’ biz

The news comes just as Illinois Gov. Rod Blagojevich launched a campaign to rebuild the state’s film industry, which generated $124 million annually in the late 1990s, but sank to $28 million in 2002.

Flanked by prominent Illinois filmmakers and industry officials Wednesday, Blagojevich called on the state legislature to pass a tax credit for up to 25% of wages paid to Illinois residents working on TV and film projects shot in the state. He also created a state Visual Media Task Force to recommend steps the state should take to reach out to showbiz.

“For decades, Illinois was the Hollywood of the Midwest, known for great movies like ‘Blues Brothers,’ ‘The Untouchables,’ ‘Ferris Beuller’s Day Off’ and ‘Home Alone,'” Blagojevich said. “But that’s changed over the past few years. Since 2001, 18 films that were set in Chicago were actually filmed in Canada.”

The governor said he expects the measure to attract seven major film productions to the state next year, creating 1,281 jobs and $98.4 million in related revenue for the local economy.

The prospect thrilled John Digles, who heads the Illinois Production Alliance, a coalition of labor unions, production houses and filmmakers.

“We have had such a love affair with Hollywood here in Chicago,” Digles said. “But that love affair has been mortgaged by inaction. Today is a very important step in the right direction.”

Multistate issue

Kathy Garmezy, director of government affairs for the Directors Guild of America, also applauded Blagojevich’s efforts although she acknowledged there are no plans to revive California incentive legislation due to the state’s massive deficit.

“People don’t view this as a California or New York issue,” she said. “Illinois, as well as North Carolina and Florida have suffered the most from runaway production and a state effort can send an important message to Washington.”

Even though they occupy opposite sides of the political aisle, Hastert and Blagojevich see eye to eye on runaway production issues, along with democratic Chicago Mayor Richard Daley who recently blasted politicians in Washington for standing idly by and letting it happen.

“You know, ‘knock-knock, no one is home in Washington,” Daley said. “They have to get reality. If they listen to people they will find out what’s happening.”

G.O.P on board

Considering the country’s return to deficit spending and the billions spent on waging war in Iraq, many industry observers doubted that a GOP-controlled Congress would want to do anything to help Hollywood this year.

But Hastert has shown a willingness to listen to the entertainment industry’s concerns. He traveled to Hollywood for a meeting with the DGA last summer. Also, when “Road to Perdition” was partly filmed in his district, he saw what a boon production could be to the local economy.

Ways and Means Committee Chairman Bill Thomas (R-Calif.) has been quietly blamed for holding up the legislation but observers believe he has developed an appreciation for showbiz’s bottom line. It doesn’t hurt that “Planet of the Apes” and several others movies were filmed in his district, whose largest city is Bakersfield.

Sources said he is open to taking up a national wage-incentive bill, although he did not want to attach it to the sweeping tax bill making it’s way through Congress right now.

“The chairmen’s attention has been elsewhere,” Dreier spokeswoman Jo Powers said. “We want to get through the (main) tax bill and hopefully then we’ll have more time to deal with this.”

Dreier and Berman introduced HR 715, also dubbed the U.S. Independent Film & TV Act of 2003, in mid-February.

In the Senate, Finance Chairman Charles Grassley (R-Iowa) and Sen. Max Baucus (D-Mont.) are also trying to find a vehicle for a runaway-production bill this year, according to Capitol Hill sources.

Similar legislation was introduced in the House and Senate in 2001 but died after backers could not find success in attaching the bills to tax legislation. A Senate report on the bill found that costs would range from $200 million to $400 million over three years.

(Dave McNary in Los Angeles contributed to this report)