During the recently completed legislative session in Tallahassee the film, TV and digital media industry (entertainment industry) made great strides in attempting to get a bill passed that would kick start the critically needed tax rebate program for the entertainment industry. There are never any guarantees but before the legislative session ended abruptly due to an impasse between the House and Senate over Healthcare issues, we were more than optimistic that a bill would pass. Unfortunately, with the session ending the way it did, the bill(s) for the entertainment industry were left, like many others, in limbo.
Last week it was announced that a special session would begin June 1, 2015 with the goal to finalize a budget in time for the start of the state’s fiscal year on July 1. While the healthcare issue will be front and center during the special session, other issues/bills that were left in limbo could be taken up as well. This is a great opportunity for our elected officials to step up and do the right thing by including the film, TV and digital media industry in the special session and to include it in the final budget.
A tax rebate program for Florida’s entertainment industry was put into effect in 2010. The tax credits were to last until June 30, 2016. Fortunately or unfortunately, depending on how you look at it, all the tax credits were allocated by June of 2013. Good news was that people wanted to do work in Florida and spend their money on us. Bad news was that the tax credits were used up too quickly. That means in the last two years, no new projects could receive tax rebates for doing their project in Florida. No tax credits meant no projects, which meant huge struggles for industry professionals trying to find work in Florida. Our industry has spent the last two legislative sessions, three if you include the most recent session leading into the special session, trying to get additional tax credits so more projects could come to Florida to hire our residents and spend money with our companies and in our communities. Unfortunately, those efforts have not had positive results. But there’s still an opportunity in the special session.
Since 2010, $296 million in tax credits have been allocated for use in film, TV and digital media projects in Florida. For every $1 that the state awarded in tax credits, more than $5 was spent in paying a Florida resident or a Florida-based company. Once everything is accounted for, the $296 million will lead to more than $1.5 billion of money spent in Florida from 342 projects. Remember, the program consists of tax credits, not cash. The program only administers tax credits for money spent on Florida residents and/or Florida companies. And the tax credits are administered AFTER a project is completed and audited by two different entities to ensure accuracy.
Some will argue that most of those projects would have been done in Florida even if they didn’t receive those tax credits. It depends on what your definition of “would have been done in Florida” is. There are multiple recent examples that are worth noting. The Infiltrator, staring Bryan Cranston, recently completed their stint in the Tampa area. This film is a Florida story, which actually took place in Florida. Producers wanted to shoot the entire film in Florida but there were no tax credits available for them. So they shot about a week in the Tampa-St. Pete area, spending approximately $2 million. The rest of the film is being shot overseas, spending approximately $24 million. Did they come to Florida, yes. Did they really come to Florida? Not really.
Next example is Sisters, a feature film comedy written by a Central Florida native staring Tina Fey and Amy Pohler. The story was written about two sisters that decide to throw one last house party before their parents sell their family home, their Central Florida home. Instead of the film shooting entirely in Central Florida, establishing shots were shot here while the rest of the film was shot in New York. Another one, did they come to Florida, yes. Did they really come to Florida? Not really.
Another high-profile project that is worth noting that didn’t come to Florida at all because of the lack of a tax credits is the upcoming ABC series The Astronaut Wives Club. The series wanted to shoot on Florida’s Space Coast, actually tried multiple times to figure out a way to make it work. But alas, they couldn’t get a tax credit from Florida so they are shooting the series in Louisiana.
These projects, combined spent less than $5 million in Florida while spending upwards of $75 – $100 million elsewhere. Meanwhile, industry professionals in Florida are underemployed, having to travel hundreds of miles away from their families, to make a living. Worse than that, many already have, and many more are contemplating, moving from Florida to other states where they can get consistent work. That’s the current workforce, but the outlook for the future workforce is worse. There are more than thirty colleges and universities in Florida that offer film and digital media degree programs. There are more than 5,000 students graduating with those degrees with the hope of working in the industry. Given the current outlook for the entertainment industry in Florida, those graduates need to seek employment elsewhere. Here’s the frustrating part for me as a tax payer in Florida. Many of those colleges and universities are state-funded institutions. That means, my tax dollars are being used to fund schools that will educate students that, upon graduation, they move elsewhere to get a job, spend money and pay taxes, in that other state. So, technically, my tax dollars are being used to eventually pay taxes in Georgia, Louisiana, New York, and California.
While the 2010 current entertainment industry tax credit program does have flaws, it’s a proven program that does what it was set out to do: entice projects to hire our residents and spend money on Florida companies, goods and services. Some legislators that I have spoken to have said “we’ve spent almost $300 million on this program” and I correct them. Florida didn’t spend anything, they gave rebates on $1.5 billion in spending. The program is performance-based so if nobody does projects in Florida, there are no rebates administered. People spent $1.5 billion that wasn’t here to begin with, and we rebated $296 million of that $1.5 billion. Take $1 as an example if the tax credit program is 25%. You shouldn’t look at it as “we’re spending $.25” you should look at it as “we received $.75” that we wouldn’t have received had it not been for the tax credit program. Legislators shouldn’t look at what is spent, it’s more accurate to look at what we received as a result.
I mentioned the existing program having some flaws. That’s the beauty of what Senator Detert and Representative Miller did this year. Industry leaders have been committed to working with our legislators to develop a balanced program that will enhance the positive return on the state’s investment, proving long term credibility and worth. Substantial changes were made to the program that will help create more jobs, encourage economic and tourism growth, establish better accountability benchmarks and ultimately strengthen and diversify Florida’s economy now and into the future. Senator Detert and Representative Miller took a successful, but not perfect program and improved upon it. The proof is in the results during the recently completed legislative session. Bills from Senator Detert and Representative Miller went through six different committees (three in the House, three in the Senate). The combined vote in the committees was 67-14, favorably. That, to me, shows overwhelming approval. Given the facts noted above, and the enhancements that were made, this is a program and an industry that should be supported in the upcoming special legislative session.
In the last 18 months, I’ve personally met with close to 30 legislators. I believe that most are genuinely good people and while I might not agree with their political stances on everything, I do believe most are doing what they think is best for Florida and that is reassuring. But I also know that our industry has gotten caught up in “politics” and that is frustrating.
We have extremely supportive bill sponsors, people that have no direct tie to our industry, but go to bat for us every day. Senator Detert and Representative Miller have courageously fought for our industry to no end. There were multiple times where they should have thrown their hands up and said “forget it” but they didn’t, instead they fought harder. The most common response from legislators I’ve met with when talking about our inability to extend the credit program is “we ran out of time” and “that’s politics.” To me, that’s not a responsible answer, if you want something done, get it done. Imagine if I didn’t finish something for a client and my response was “we ran out of time” or “sometimes that happens.” The real world doesn’t work that way, life doesn’t work that way.
State legislators have an opportunity to stand up, not play politics, not play “I’ll give you entertainment if you give me something else” even though entertainment is overwhelmingly supported by both the House and Senate, Democrats and Republicans. Include the film, TV and digital media investment program language from the Senate’s Economic Development Package (SB 1214) as part of the call for the special session. This language has addressed all of the concerns of both the House and Senate. This affects 16,000+ Florida companies, 100,000+ Florida residents and we’re not politics, we’re people.
Please CLICK HERE to sign the petition asking Governor Scott, (Senate) President Gardiner, and Speaker (of the House) Crisafulli to include the entertainment industry in the upcoming legislative special session.