Reel 'em in: State may profit from film incentive bill
Stars may fall on Alabama.
Movie stars, that is.
The state Senate will soon vote on a bill that offers incentives to movie and television production companies in hopes of luring them into the state. It opens Alabama to an industry that spends hundreds of billions of dollars a year — an industry whose presence here is almost non-existent, said the bill's chief proponent, Rep. Richard Lindsey, D-Centre.
"This should bring back a number of people in the production business," Lindsey said in a phone interview last week. "And it will keep people that are training to work in that industry here."
The bill allows a 25 percent rebate on costs spent in Alabama by a qualified production company and a 35 percent rebate for payroll paid to Alabama residents.
As one of nine states without film incentives, Alabama has already lost at least one chance of landing a large television production, said Daniel Wheatcroft, president of Shoot to Thrill Productions, an entertainment consulting company in Los Angeles. Through business connections, he knows the Lifetime show Army Wives was interested in relocating to McClellan, but decided not to leave Charleston because South Carolina offers film incentives.
"Army Wives had nothing to do with not liking Alabama," Wheatcroft said in a phone interview. "Alabama did not have any incentives."
A 2007 economic study into the development of McClellan specifically mentioned passing a film incentives bill as a way to lure commerce to the former Army post.
Alabama had incentives until 2006, when the enabling act lapsed and wasn't renewed. Lindsey sponsored a similar bill last year, but objections by the Alabama Education Association left it stuck in the Legislature as the session ended.
"Last year we ran out of time," Lindsey said. "Once things got ironed out, we were just out of time."
The 2009 version of the bill makes up for lost revenue by enforcing penalties when tax payments are late.
There hasn't been objection to the bill so far this session, and it has moved smoothly through the House to the Senate, where it could be voted on as early as Tuesday. Gov. Bob Riley's office has signaled the governor is inclined to sign the incentives into law.
The proposed incentives are the best yet, said Wheatcroft. Alabama's incentives are comparable to neighboring states; Mississippi offers a 20-25 percent rebate, and Tennessee offers up to a 32 percent rebate.
The state also has safeguarded its funds by paying rebates only after a production is completed and the company files an income tax return.
"Alabama has the result of the production prior to any rebate going out," said Wheatcroft. "They don't have to spend money to make money."
The bill also caps total rebate spending to $5 million for the first year, and increases to $10 million over the next two years.
"The caps help us phase into it," Lindsey said. "It's a good safeguard and prudent business to do it that way."
And there is no business like show business, say the bill's proponents.
According to a 2006 report by the Motion Picture Association of America, producers for the Oscar-winning film Walk the Line spent about $10 million while filming in Tennessee and created a total economic impact of $18 million to $20 million.
Louisiana, which enacted the first aggressive incentives in 2002, has seen $1.48 billion in economic growth since the bill's passage, according to a New Orleans business newspaper.
A movie or television production can employ hundreds of blue- and white-collar workers, including hairdressers, carpenters, electricians, lawyers, accountants and florists.
"Especially in a downturn economy ... it's important to look at an industry that can help the state," Wheatcroft said. Once the industry is here, the next step is to develop and train the work force that will come up, he said.
A direct result of Tennessee's film incentives, which went into effect in 2006, is a new film and television training program at Chattanooga State Technical Community College, according to an article in the Chattanooga Times Free Press. Programs such as these provide education, which, in turn, provides an opportunity for high-paying jobs within the industry.
According the MPAA, the average salary for workers directly employed in the entertainment industry is $73,000. The figure, which excludes the payroll of highly compensated talent, is $18,000 higher than Alabama's average salary, according to census data.
Louisiana changed the way the entertainment industry works, Wheatcroft said. Until it began the film incentive trend, producers had autonomy in choosing filming locations. Now, studios mandate that producers look for states with incentives, even if it means changing the script to fit the location, he said.
That should make Alabama even more appealing to filmmakers, said Pete Conroy, a local supporter of Lindsey's bill and director of Jacksonville State University's Environmental Policy and Information Center. Alabama's diverse terrain offers everything from "mountains, canyons, rivers, beaches to metropolitan areas," he said.
"I was told at some point that the only scene that would be hard to film (in Alabama) would be a desert scene," said Jason Kendall, a Calera resident and director of an upcoming Hank Williams biopic tentatively titled Lonesome Cowboy. "And I'm thinking, not with the temperature. Just throw sand out there."
As owners of a production company within the state, Kendall and his business partner, Jeffry Queen of Tuscaloosa, are big supporters of the bill.
Although they are still in pre-production, the team estimates Lonesome Cowboy will cost anywhere from $5 million to $10 million to make, and will employ more than 100 people. Both agree the movie will be produced regardless of whether the film bill passes, but the result will influence how much of the movie is filmed within the state.
If the bill does pass, the team will receive a minimum $1.2 million rebate, thus expanding its budget and helping hire "a Hollywood box-office smash name to appear in the movie," Queen said.
This is how incentive rebates typically work, Wheatcroft said. There is a misconception that the rebates simply pad investors' pockets, he said, but "incentives enhance and contribute to production costs. The money comes back to the state."