Whatever happened to Hollywood East?
At one time, the film industry seemed on the verge of making Florida its favorite second home. But these days, very few directors are calling for lights, camera and action anywhere in the Sunshine State. Instead, many productions are shooting elsewhere.
“We’ve seen a significant drop in our business since the credits in the existing Florida state tax incentive program were exhausted,” said John Lux, chief operating officer of IDEAS, an Orlando-based media production company. In 2010, the state earmarked $296 million in tax credits for film, TV and video production, hoping it would stretch six years. But with high demand, it was gone in only three.
Traditionally, Florida has been a popular setting for films. Nine years ago, the state was ranked third in the United States after California and New York. “As recently as 2013, we worked on more than 20 entertainment projects in a single year,” said Lux. “But in the last two years since no new tax credits were available, we’ve worked on just three.”
To help push for more tax credit funding, Lux has personally met with legislators, attended legislative delegation meetings and testified on a panel in front of the House Finance & Tax Committee.
“Florida must now compete with 37 other states and many foreign countries that have some type of incentive program to attract film, TV and digital media projects to their regions,” said Lux. “In order for our industry to grow here, I believe Florida needs to do the same.”
And the numbers seem to agree. A January report from the legislature’s nonpartisan policy analysis office shows Florida losing ground to New York, Louisiana and Georgia.
Some of these competing states have actually modeled their own film incentive credits on Florida’s current program. It specifies that tax credits are only rewarded after a production wraps.
The industry is fighting back and putting the spotlight on the issue with Film Florida leading a social media campaign, #EntertainThis to advocate for the current Florida Entertainment Industry Financial Incentive Program. And the “Rally in Tally 2015” legislative fly-in took place on March 11, in conjunction with Florida Tourism Day.
“Companies must spend money here on Floridians or with Florida-based businesses before receiving any tax incentive,” said Lux. “It’s proven to be fiscally responsible―it’s just the amount of credits made available have not been enough to satisfy demand.”
The credits that were allocated successfully attracted TV shows, commercials and films such as Dolphin Tale. Both it and its sequel, Dolphin Tale 2, were shot in Clearwater. City officials there estimated a local economic boost of $580 million in 2013 following the first film’s release, mostly from new visitors to the Clearwater Marine Aquarium. Another sequel may be in the works.
“Beginning in 2010, the previous tax credits attracted $1.5 billion in direct spending on Florida companies and Florida residents,” said Lux. He thinks the number of productions still interested in filming here is enormous.
“But it doesn’t make financial sense for them to come to Florida if there are no tax credits available. So if we have a program that is adequately funded over a multi-year period, I believe we’ll win far more projects than we lose.”
Both Sen. Nancy Detert, R-Venice, and Rep. Mike Miller, R-Winter Park, have filed new film tax credit bills. Sen. Detert told the Miami Herald that she wants to streamline the process and put enough money into the program to make Florida competitive with other states. Miller indicated to the Herald that both he and Detert would also prefer to award credits on a merit basis rather than to projects that simply apply first.
“Sen. Detert and Rep. Miller have worked diligently to try and streamline the process and maintain fiscal responsibility,” said Lux. “It’s difficult to create a bill that satisfies both government and the film industry. It can’t be so cumbersome that filmmakers throw their arms up and say it’s not worth the effort.”
The chances of achieving an overhaul this year are uncertain. However, on March 18 there was some encouraging news as House Bill 451 passed in the Economic Development & Tourism Subcommittee with a vote of 11 to 2.
Some legislators oppose tax credits on principle, while some believe tax credits for film, TV and video production don’t provide a good return on investment. Lux and other supporters disagree.
“The truth of this incentive program is that it’s about people who live in Florida, work in Florida, pay taxes in Florida and want to remain in Florida. That’s who this program truly benefits.”