State lawmakers should reform, not abandon, the state's much-maligned film tax credit program. While there have been abuses in the past, there are many more cases of the credits growing Louisiana's film industry.
Lawmakers advanced a series of bills last week that would make the film tax credit program significantly stronger, more focused on homegrown talent and less expensive. The state spent $226 million on film tax credits last year.
Louisiana has surpassed Hollywood as America's film capital, but the state's $1.6 billion budget hole and the credits' soaring costs have made them a target for potential cuts. Supporters of the credits point to the exponential growth in Louisiana-based films and film-related companies. Moonbot Studios in Shreveport, for example, has won an Oscar and four Emmys — two of them just last month — for its animated short films.
Last week, a handful of bills revamping the credits began moving through the House and Senate. House Bill 829 by state Rep. Joel Robideaux, R-Lafayette, would cap the state's costs and refocus the credits on Louisiana residents and companies. On May 7, the House passed HB 829 by a vote of 101-2. That same day, the Senate passed several tax credit reform bills by state Sen. J.P. Morrell, D-New Orleans, who said his bills would "clean up" the program.
As amended, HB 829's major elements include:
• Capping the total annual credits at $200 million and an individual film's total credits at $30 million. The former is designed to keep the program's annual cost under control; the latter aims to prevent several large projects from gobbling up most of the credits in a given year.
• Lowering the qualifying investment threshold to $50,000 for films directed by Louisiana residents.
• Awarding an additional 15 percent in credits (on top of the current 30 percent) for films based on screenplays with copyrights owned by Louisiana residents or Louisiana companies.
• Awarding an additional 15 percent in credits for films using music with copyrights that are at least 25 percent owned by Louisiana residents or Louisiana companies.
"The most important aspect of this is that we are incentivizing local producers, directors, songwriters and talent to get into the program," says Sherri McConnell, former executive director for the state Office of Entertainment Industry Development at Louisiana Economic Development. McConnell, now a private-sector consultant, helped draft HB 829 and has volunteered to help promote it.
"This bill is about Louisiana residents," McConnell told me after last week's House vote. "A local filmmaker who has a screenplay could attract outside investment at 45 percent if this bill becomes law. That's huge. And while it is specifically geared to helping local filmmakers, it will continue to allow for a great deal of production from outside the state."
Moonbot CEO Lampton Enochs said in an email that the film tax credits helped that 50-person company grow from a small startup to an internationally recognized creator of world-class animation. Enochs added that HB 829 "brings the focus of the incentives to Louisiana-based companies and Louisiana residents who work in the industry."
It would be a shame if the program were scrapped just when it was on the verge of realizing its full potential to create more Louisiana employers and taxpayers.