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Alabama ups tax credits for film biz

Octavia Spencer honored at the Statehouse

On the same day that Academy Award winner Octavia Spencer was honored at the Alabama Statehouse, a state Senate panel approved a measure to increase tax credits for production companies filming in the state.

The measure approved by the Senate committee Wednesday was passed without opposition by the state House of Representatives in February.

“I want to give a heartfelt thank you to all those who voted to pass (Rep.) Terri Collins’ incentives bill,” Spencer said.

“I’m going to do what I can to get more movies made here.”

The legislation would increase the overall amount the state can spend on incentives from $10 million annually to $15 million by the year 2013. It would also expand from $10 million to $20 million the amount that can be spent on a production to qualify for the tax incentives, meaning mostly smaller productions could take advantage of the incentives.

The cap on incentives was originally $25 million, but the committee voted to lower it.

In a public hearing on the bill last week, Collins said she hoped it would encourage productions set in Alabama to actually film in the state.

“It’s disappointing to see ‘Forrest Gump’ and the stadium he’s supposed to be running in — the University of Alabama stadium — is not actually the University of Alabama stadium,” she said. She also noted that the 2002 film “Sweet Home Alabama” starring Reese Witherspoon was filmed in Georgia.

Some in the committee were skeptical as to whether the legislation’s modest increase in tax incentives would actually draw more movies to be filmed in Alabama.

“The (incentive) number keeps going up making it more and more attractive, but I don’t think we’re losing them (film productions) because we don’t have a bigger package,” said Senate Minority Leader Roger Bedford, D-Russellville.

“I don’t think us tweaking that number will bring us more,” he said. “I don’t know that we’re really getting our bang for our buck.”

Opposition was stronger from the Alabama Education Association. Money to provide the credits would come from the state’s Education Trust Fund — the budget set aside to pay for public schooling. Proponents say the tax money made from the film productions would go right back to the trust fund, but opponents weren’t so sure.

“What we ask is that the school children don’t subsidize industry,” said Susan Kennedy, revenue manager for AEA, during the public hearing. “We are not opposed to incentives, what we’re not for is spending $25 million to get $3 million. That’s not a good deal.”

Kennedy handed committee members a 2010 report by the Washington D.C.-based think tank Tax Foundation that found jobs created by visiting film productions are often temporary and offer limited upward mobility. The report also finds that often film incentives make little discernible benefit to a state’s economy.

Kennedy said the state spends $5 million annually on classroom supplies for its 750,000 public school students, and the $15 million cap for film incentives represented three times the state’s school supply budget.

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