This spring, Maine missed out on hosting the filming for “Tumbledown,” a movie made by two Maine filmmakers in which Farmington and western Maine play a starring role. The Pine Tree State’s stand-in in for that yet-to-be-released production? Central Massachusetts.
And last year, when producers of the CBS series “Under the Dome,” based on the Stephen King novel set here in King’s home state, were scouting ideal production locations, they removed Maine from the running almost immediately and settled on North Carolina.
The producers cited Maine’s lack of a generous tax incentive package as the primary reason — or at least one of the leading reasons — for going elsewhere to film a production set within Maine’s borders.
Indeed, Massachusetts and North Carolina offer filmmakers more generous tax incentives than Maine, and both states have seen significant growth in the number of productions they have attracted in recent years. Massachusetts is gaining a reputation as “Hollywood East.”
So, should Maine try to match them? Gov. Paul LePage apparently thinks so. Among the few bits of policy he’s hinted at pursuing if elected to a second term, LePage indicated recently at a breakfast hosted by the Bangor Region Chamber of Commerce that Maine should follow the lead of Massachusetts and North Carolina and offer larger film production incentives.
But there’s mounting evidence showing that generous film production incentives aren’t a wise investment.
In 1992, Louisiana became the first state to offer an incentive package designed to lure productions. According to the National Conference of State Legislatures, 39 states and Puerto Rico offer some form of film production incentive.
Maine offers tax rebates worth 12 percent of wages paid to Maine residents and 10 percent paid to nonresidents who work on a Maine production on which filmmakers spend at least $75,000. Producers filming in Maine also can claim credits for production expenses and avoid lodging taxes if hotel stays exceed 28 days.
While dozens of states have jumped on the film credit bandwagon over the past two decades, a number of states have started to drop their incentives, realizing they produce a lousy return on investment. Arizona, Idaho, Indiana, Iowa, Kansas, Missouri and Wisconsin have ended their incentives in recent years; other states haven’t funded the incentives they have on the books.
For every dollar Louisiana devotes to its longest-running incentive program, the state sees a return of 16 to 18 cents into its coffers, according to a 2005 study by the chief economist at the Louisiana Legislative Fiscal Office. In Massachusetts, the return was 13 cents on the dollar between 2006 and 2011, according to that state’s Department of Revenue.
Even the Tax Foundation — a national group that advocates for low taxes — warns states against offering generous film production incentives.
“[S]tates are investing in movie production projects with small returns and taking unnecessary risks with taxpayer dollars,” according to a 2010 special report from the group. “In return, they attract mostly temporary jobs that are often transplanted from other states.”
We don’t seek to discourage the growth of a viable film industry in Maine, and we’re happy to see Maine experiencing some growth in the sector. But Maine would almost guarantee itself a negative return on investment if it expanded its film incentives package to the scale of Massachusetts and North Carolina.
That would be a foolhardy move, especially when there are economic development policies Maine can pursue that have a proven, positive return — and don’t limit a generous investment to one industry with no accountability for public money.