A state Senate committee is expected to approve legislation today in an effort to further attract the lucrative film production industry to Wisconsin later this year.
Gov. Jim Doyle signed a bill that passed through the Legislature last May enacting tax credits for expenses related to film production. However, under current law, companies may not claim the credits until after Dec. 31, 2007.
The Senate Economic Development, Job Creation, Family Prosperity and Housing Committee will vote today on an amendment that would allow film companies to claim the tax credits immediately.
Supporters of the bill — including the committee's bipartisan leaders — say Wisconsin is only missing out on revenue by not making tax credits available as soon as possible.
"Moving up the effective date will allow Wisconsin to claim a sizable chunk of the $40 billion film industry," said Committee Chair Julie Lasaa, D-Stevens Point, in her Feb. 14 public hearing testimony. "It will create high-paying jobs, as up to 80 percent of film production jobs are local hires."
According to the Milwaukee Film Office, the current delay may have already cost Wisconsin more than $75 million in possible film productions that expressed interest in working in the state. As a result, hundreds of jobs may have gone instead to other states and Canada.
Tino Balio, University of Wisconsin communication arts professor emeritus, said the bill would likely see little resistance in the Legislature, as it did a year ago, since the film industry is a "relatively harmless enterprise."
"It's a clean thing. They're in and they're out," Balio said. "It's hard to see anything wrong with it."
Film production isn't a new business for Wisconsin, as recent Hollywood projects "The Last Kiss" (2006), "Side Effects" (2004) and "Mr. 3000" (2003) all looked to film in Wisconsin. Apart from key screen shots, however, most of these films were outsourced to other U.S. states with lower tax rates like New Mexico, South Carolina or Illinois.
Scott Robbe of Film Wisconsin, a group that markets the Badger state to the film industry, said the tax credits aim to attract producers to film entire movies in Wisconsin.
"What Wisconsin has had to battle is not having the industry," Robbe said. "Because we haven't had incentives, we haven't been competitive."
The bill signed by Doyle May 30, 2006, gave film companies a tax credit equal to 25 percent of salary or wages paid for services rendered in Wisconsin and a 25 percent tax credit on any production expenditures including set construction, wardrobe, photography and other common costs.
For the first three years a production company does business in Wisconsin, it may also claim a tax credit for 15 percent of the amount paid to purchase or repair property.
Although the legislation was mostly directed toward film, it also aims to attract television commercial and video game markets. The Department of Revenue did not estimate the bill's loss of revenue because film production in Wisconsin varies annually.
State Sen. Lena Taylor, D-Milwaukee, isn't worried about the cost to the state and is confident the tax credits will boost Wisconsin's economy.
"It's an economic development — it basically will attract new business and new jobs," Taylor said. "We have the ability to make money, frankly, to create opportunity … to compete with our surroundings."
Taylor said the tax credits could benefit Milwaukee directly, encouraging tourism and helping the city's film festival. Film Wisconsin also estimated "Mr. 3000," which was partially filmed in Milwaukee in 2003, brought the region almost $20 million.
"There are a number of young people interested in music, or the arts, for that matter," Taylor added. "I feel like we can't afford to ignore jobs."
Using tax incentives to attract film production isn't a new concept. Balio said Europe has offered some sort of incentives since the 1920s, and a handful of U.S. states, including California and New York, handed out incentives decades ago.
Today, the tax credits for film production almost seem to be the practical answer to Wisconsin's dwindling economic dreams.
"To do nothing would attract no production," Balio said. "To do something would attract some."
According to the Milwaukee Journal Sentinel, the Assembly Committee on Jobs and the Economy will also vote on the bill