COLUMBIA — With the closing of the Missouri Film Office in Jefferson City last week after 28 years of service, the state's filmmaking community is worried about the future for made-in-Missouri movies and $4.5 million in tax credits.
Gov. Jay Nixon cut the film office's $175,000 per year in funding in early June to help balance the budget. That cost film office director Jerry Jones and assistant director Andrea Sporcic their jobs. Jones and Sporcic helped filmmakers — like the producers of the Oscar-nominated "Winter's Bone" and "Up in the Air" — through the process of applying for the credits.
Despite the success of both films, which were made in the state and received more than $4 million total in tax credits, no credits have been awarded so far in 2011, Jones said. All submitted applications remain pending, a fact that Sporcic is sure will deter further film production in Missouri.
"Filmmakers have a shoot date, and if the government doesn't get back to them about the tax credits they applied for before their shoot date, then they don't receive any," she said. "The applications have been pending for so long that the filmmakers may no longer qualify."
As it stands, prospective filmmakers have been promised guidance and support from the Missouri Department of Economic Development But Missouri Film Commission chairman Bill Lemmon said he doubts the department will be able to perform at the level of the film office, which also helped filmmakers choose locations, find equipment and obtain permits.
"Jerry and Andrea speak (the filmmakers') language," he said. "Now, who do filmmakers call when they have questions about Missouri? There's no one for them to call. The department does not have the experience or expertise to handle questions."
Future looks dark for tax credits
Missouri Tax Credit Review Commission Co-Chairman and state Sen. Chuck Gross said the state extensively examined the economics of film tax credits and did not find them cost-effective. Film tax credits serve too narrow an industry and provide inadequate economic return, he said.
"The problem with film tax credits is that they're meant to be economic development credits," Gross said.
Tax credits essentially represent projected revenues the state might give up. The government awards tax credits in hopes that economic relief will spark increased economic activity, thus making up for lost revenue.
Gross cited the Tax Credit Commission's Briefing Material Book. Over a 10-year fiscal period, the book lists $734,811 in benefits to the state from the film tax-credit program with total costs listed at $6,639,652 — roughly an 11-cent return to the state for every dollar spent.
"You can't call that economic development. It's a bad, poorly structured program," he said.
Yet Lemmon said the economic model used to compare returns does not adequately account for the differences between the film industry and other industries that receive tax credits. The REMI Missouri Economic Model used to assess the economic impact of tax credits accounts for prices, wage rates and labor participation.
"It doesn't count local taxes; it doesn't count food expenditures or hotel stays," Lemmon said. "There is a much bigger economic impact than acknowledged."
Jones cited "Up in the Air" as an example. He said the producers employed 100 crew members, hired 48 people to be on camera and brought on 2,000 extras.
"That doesn't even include hotel and food expenses. The 'Up in the Air' production staff supported in excess of 150 vendors including grocery stores, veterinarians, hardware stores and more," he said.
"With 'Up in the Air,' there is an argument to be made (in favor of tax credits)," said Audrey Spalding, a policy analyst for the Show-Me Institute, a free-market think tank in St. Louis. "Maybe Missouri will miss out on (George) Clooney movies that require millions of dollars in tax credits."
And Missouri has missed out, Lemmon says. After the success of "Up in the Air," Paramount Pictures came back to Missouri fully intending to film another movie called "Fun Size."
"(The producers) were willing to spend $30 million in Missouri and asked for $4 million in tax credits from the state. Although $4.5 million in tax credits are earmarked, the state only offered a million," Lemmon said.
Paramount crews abandoned Missouri, went to Ohio for a better deal and got it.
"It's difficult to get studios to come to Missouri from states like California and New York, but Paramount was poised to come back," Jones said. "Missouri was on the verge of attracting a lot of big production, and it will take a long time before studios (like Paramount) return."
Filmmakers on their own
But Spalding said tax credits are not the only force motivating filmmakers.
"I think it's defeatist to say filmmakers won't come to Missouri. The low cost of living and unique landscape are perfect incentives," she said.
The problem is that without the Missouri Film Office, Jones said, filmmakers won't be able to find those landscapes.
"A filmmaker can find that information on his own, but it's a much longer process and they can always go to another state with a film office," he said.
Owner of Boxcar Films and Columbia resident Brock Williams agreed the lack of a locations resource will hinder the film industry in Missouri.
"Not having a film office at all will really affect the perception production companies in New York and L.A. have of Missouri," he said. "It will only further deter people. If someone calls the state about a location, and they can't find a resource, then they'll go somewhere else, to another state with a film office that can guide them through the process of finding a place to shoot."
If out-of-state production companies lose interest in Missouri, Williams said, he'll lose business.
"It will eventually affect me since there will be less and less work coming in," Williams said. "It's already surprising how many people make a living off of doing freelance work for out-of-state production companies."
He's familiar with the difficulty of applying for the credits because he's a co-producer on a film that has sought them.
"It's been a big pain ..." he said. "One of the producers filed all the paperwork and the legislature said they didn't get it. So she filed it again, and the legislature said they still don't have it. It's a huge bureaucracy with a lot of red tape, but the film office helped navigate us through it."
After all that, he's doubtful the credits will be awarded.
"In a nutshell, we might not even get the tax credits. It's not a high-budget film, like something out of Hollywood, but it's definitely the highest budget Columbia's seen," he said. "I don't think the financiers in L.A. will ever come back to Missouri if we don't get the tax credits."
The flashiness and appeal of big-city productions aside, 98 percent of the business prospects that rolled through the film office in the past year did not even require government subsidies, Lemmon said. Such productions include documentaries, commercials and television shows.
"Out of the 100 projects we reviewed last year, only two involved tax credits," Jones said. "Last year, these sorts of productions brought over $5 million to Missouri and were a valuable economic tool."