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Louisiana Film and Entertainment Association touts newly-released Economic Impact Study and warns state against cutting filmmaking tax incentive program

May 3, 2013

Times Picayune

If you build it, the movie says, they will come. But as the Louisiana Legislature works to adopt a new budget plan -- expected to come early next week -- state film industry insiders are adding an addendum to that oft-quoted line from "Field of Dreams": If you dismantle it, they will go away.

"What we're doing here in Louisiana with our tax incentives is, we're opening up our arms and saying (to the film and TV industry), 'We know that you're leaving California. We want you to come to Louisiana,' " LFEA President Will French said. " 'We want you to base your business here, bring your company here, bring your employees here, hire locally, help us train locally. Let's grow this thing here.'

"It's like putting out a net and catching fish as they go by."

The state's tax program -- which offers a 30 percent tax credit for qualified expenses by film and TV projects spending more than $300,000 in-state -- has catapulted Louisiana to the No. 3 spot on the list of the country's busiest filmmaking locations. But if it is significantly curtailed by the Legislature, French said that's exactly what movie producers will do: swim right on by, to places like Atlanta and North Carolina and other locales that have adopted tax plans mimicking Louisiana's in an effort to claim a share of the filmmaking pie.

Frustrating industry insiders' attempts to spread the word about the value of the state's tax program was a state Legislative Auditor's report issued earlier this weekshowing that Louisiana spent $170 million to lure TV and movie projects to the state in 2010. That report -- and all those zeroes -- understandably raised a few eyebrows. The problem with it, however, is that the report didn't explain what the state was getting for its money, French said.

Since then, however, another report has been issued -- a detailed economic impact study of the tax program, required by state law to be conducted every two years by Louisiana Economic Development. That report, issued Wednesday (May 1), not only analyzed newer data -- drawing from 2010, 2011 and 2012 figures -- but it also offered a dose of what French and fellow LFEA officer Scott Niemeyer characterized as vital, and meaningful, context.

Specifically, they said, the more recent report spells out just what the state is getting for that $170 million investment.

"Here are a couple of nuggets out of the economic impact report from (Wednesday): $1.1 billion in sales at firms within the state, $770 million in household earnings for state citizens and 15,184 jobs," Niemeyer said, citing 2012 figures. "Those are very meaningful statistics published by the LED's economist in the economic impact report -- which are bigger numbers than we even anticipated."

There are other benefits as well that the report doesn't measure, French said. One of them: the part the film industry is playing in reversing the brain drain that has so long afflicted Louisiana, as its most talented and promising youngsters have moved elsewhere to jump-start their careers.

Case in point: Niemeyer -- a film producer behind such projects as the Baton Rouge-shot "Pitch Perfect" -- who left New Orleans for the West Coast after school. Since the tax incentives have been enacted, he's come back home, buying a place in the Warehouse District and kicking off plans to build a Hollywood-style movie studio -- dubbed Deep South Studios -- in Algiers. (Niemeyer has eased back on the throttle of those studio plans until it's clear what the legislative session will bring, but he says it's still very much alive.)

All that is to say that the program is working as it was intended: It's using state money to build an industry that would otherwise not consider putting down roots in Louisiana.

"The author of the economic impact study says just that: that the program is doing exactly what it is designed to do, and it's doing it very efficiently," French said.

The report also says that while the state's entertainment tax incentives programs "clearly have an economic impact to the state in the form of increased business sales and jobs for Louisiana residents," they could stand a few nips and tucks to maximize their value to the state economy.

The fear for the LFEA and locals who depend on the industry for their paychecks is that legislators will look at the amount that state issues in filmmaking tax credits and see it as a convenient pot to draw from to cover budget shortfalls. That, French said, would be woefully short-sighted.

"The real concern to us is that something happens in one of these broader budgetary bills -- and at a time when our Legislature has a budget shortfall, has a hole to fill -- that they're just going to start grabbing at whatever pots of money they can find without thinking about what damage could be inflicted by taking money out of the wrong pot," French said. "That's what concerns me the most."

He continued: "We pay for heath care and education and a whole variety of things -- and we have to pay for those things. At the same time, we have to be investing, and the film tax incentive is just about the best investment the state can make. ... If we cut back and if we were less competitive and if we had the 20th best film incentive in the country, nobody would be movie to Louisiana. Nobody would be uprooting their businesses from California and coming here. They would go to the top state.

"So this is an investment in truly capturing the industry as it out-migrates from California, and one that will pay off in a huge way for decades and decades and decades down the line."

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