Sunday, December 12, 2010
Consider the motion picture industry’s plea to preserve its tax credits a preview of coming attractions.
Members of the Missouri Motion Media Association last week asked lawmakers to reject a recommendation from the Tax Credit Review Commission.
Efforts to balance the state budget during the economic downturn prompted Gov. Jay Nixon to create the panel to study the cost-effectiveness of the state’s tax credit programs.
Tax credits are an economic development tool used by governments; tax forgiveness is designed to attract and retain business, but the downside is less revenue flows to taxing jurisdictions.
Missouri offers about $521 million annually in tax credits through 61 programs, which pertain to agriculture, the environment, financial services, low income housing, historic preservation and other areas.
The commission’s recent report included a recommendation that the $4.5 million in incentives to attract filmmakers be redirected to investments in technology companies.
Filmmakers cried foul. They pointed to the acclaim surrounding “Winter’s Bone,” filmed in southwest Missouri, and “Up in the Air,” filmed in St. Louis.
“Without the state tax credits, we will have no film industry in Missouri,” said Shawn McClaren, a Hallmark film producer based in Kansas City.
The tax credit panel, however, concluded: “This tax credit serves too narrow of an industry and fails to provide a positive return on investment to the state.”
Despite scattered successes, Missouri is not a major player when it comes to major motion pictures.
Our state ranks 32nd among the 42 states that offer such tax credits, according to Jerry Jones, director of the state’s film commission.
Even Jones cannot counter the panel’s conclusion. He concedes: “We haven’t found a true way to estimate the economic impact of film.”
The film industry is not alone in having its tax credits targeted for elimination or streamlining. The commission recommended halting 28 programs and improving the operation of 30 others.
Lawmakers who gather when the session convenes in January are likely to hear similar pleas from proponents of other programs.
Amid what could be a roaring cacophony, legislators will need to remain focused on their constitutional obligation to balance the budget, even if that means leaving some tax credit recipients disgruntled.
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