Tuesday, March 24, 2009

Why the Film Tax Credits are Good for Wisconsin

[For some reason this post wound up in the form of a catechism, so with apologies to Thomas Aquinas, here are a few:]

Objection: The tax credits "are a wash."

Contra Objection: The numbers just aren't in yet. Right now the only figures that get thrown around in the debate over the film credits are these:
A Commerce Department review of the "Public Enemies" film showed that while it brought about $5 million in economic activity to the state, it collected $4.6 million in tax breaks.
But according to the "head of the state film office" (whatever that means, presumably Film Wisconsin) "Public Enemies" will have added $18 million to the state when all is said and done. One can argue the merits and flaws of both numbers, but here's a third figure to digest: just in the week or so the movie filmed here in Oshkosh the City Manager estimates that it brought in $4 million to city businesses. Considering the movie filmed in a half dozen other locations around the state, that estimate seems to suggest that the movie dropped a little more than the Commerce Department is giving it credit for.

Objection: The money went to out of state interests.

Contra Objection: I'm sorry, do you know where to find an experienced key grip in Wisconsin? What about a sound editor? A make-up artist with experience in film? I could go on and on -- there are hundreds of extremely technical jobs that go into making a movie, jobs that require experience and expertise and that experience and expertise does not yet exist here in Wisconsin because, to date, there is not much of a film industry here. As more movies begin to film here production companies will start to spring up that employ these people on an almost full time basis.

Right now we've had exactly one big Hollywood movie film in state, but as the volume of movies filmed here increases so too will the demand for these kinds of jobs. Eventually there will be enough film work in state for those so employed to actually live and work here full time. Until that becomes a reality don't expect directors to hire the first barber they find in the local phone book to touch the talents' hair.

But in the case of "Public Enemies" there were also tangible employment benefits to locals. Here's a local Oshkosh union organizer:

Commerce has stated repeatedly that most of the Wisconsin 'jobs' created by the film 'were of extras and stand-ins hired at a low wage for a very short period of time with no benefits'. Our local union, International Alliance of Theatrical Stage Employees No. 470, supplied more than 100 Wisconsin workers for this project. The rates ran from $20.07 to $27.17 an hour.

The average gross pay per worker was more than $7,000 for the six-week project. The wages for 'Public Enemies' in Oshkosh, Manitowish Waters and Beaver Dam totaled $615,097with additional benefits totaling $126,425. Bringing overall wage/benefit totals to $741,522 for the project from our end. These figures are just for us, there are two other local IATSE stagehand locals in Wisconsin and they have had similar financial experiences by working for Public Enemies.

That's money that's going to Wisconsin workers and staying here in Wisconsin.

Objection: The money goes to frivolous things.

Contra Objection: Hollywood budgets are notoriously crazy. Films that are made abroad in countries with governments of dubious integrity will set aside money to bribe local officials. "Flowers and candy" is an infamous euphemism for "hookers and coke." (For a great look into just how crazy these things can be, go here -- it should be mandatory reading for any film student.) Stuff like this obviously shouldn't be reimbursed (or even reported in the first place), but any outrage over the reimbursement of things like salaries is disingenuous.

Last month the Commerce Department made a big deal about the state footing the bill for $450,000 of "Public Enemies" director Michael Mann's salary. The tax credit law says the state will refund 25% of the "salary in Wisconsin for out of state residents, excluding Depp and other actors." Obviously, the director falls in that category. Now since the director is one of the biggest brand names in Hollywood, he collected a big fee, and what do you know? 25% of Mann's $1.8 million is $450,000.

As for the "outrage" over Depp's entourage, see the last argument. It's not like the state was forking over a few grand to get Drama and Turtle stoned before a day of hooking up with co-eds on Langdon Street. A hair stylist is an actual job, and an expensive one at that in Hollywood; and I've been on enough really awkward cab rides to imagine that a familiar driver is probably worth the expense for someone who is recognizable to just about everyone on the face of the earth.

No, these are not jobs that people in Wisconsin can relate to or very frequently understand, but often times there is a good economic reason for them.

Objection: If a big budget, Hollywood movie like "Public Enemies" can't prove the film tax credit is worth it, than nothing will.

Contra Objection: In fact, it's just the opposite. It was something of a coup to have "Public Enemies" be the first film to get a shot at the tax credits because most of the movies that will be made in Wisconsin will be small independent movies that are looking to take advantage of cheap stage labor. In many ways having such a high profile project like "Public Enemies" being the test case for the credits was harmful because it feeds into the kind of populist rage so prevalent these days that "rich Hollywood types" are getting a "bailout" or "handout," so evident in this asinine editorial in the State Journal. That argument ignores the smaller films that will be the backbone of a budding Wisconsin film industry

A much better case study for the film credits will be the significantly lower budget, less than $1 million, "Feed the Fish." The movie is being produced by local Wisconsinites, starring Wisconsinites (they even took out a casting call in the Green Bay Press Gazette), being filmed in Wisconsin and features a respected Wisconsin-native. "Project Solitude" also just finished filming recently in Green Bay and "Nephilim" (which has the biggest budget of the bunch with a whopping $6 million) is set to start shooting in a few months. All three of these are much better examples of films that will be attracted by the incentives, but are almost never discussed when it comes to the tax credits.

Stagehands and other production employees -- the guys who will be the bedrock of Wisconsin's film industry -- get paid the same rate regardless of how much the director makes or the size of the star's entourage. Of course, the more films that come here, the higher the demand for their services will be which will either increase the need for more film industry jobs or raise the wages of those already working in it. That's a dilemma I'm sure most public officials would love to find themselves in.

Objection: The tax credits would only help a hypothetical state film industry.

Contra Objection: In recent years the state of Wisconsin has tried desperately to hold on to the manufacturing base of its economy with a certain degree of success in some places and failure in others. At the same time Wisconsin has wisely invested in biotech as a means of developing an industry that will bridge the state's economy to the future. At the same time, however, the state continues to suffer from brain drain. "Why," politicians seem to always ask, "are these smart kids with great ideas and who play in bands on the weekends not sticking around and getting a job at Manitowoc Crane?"

Simple: there has been absolutely no development of Wisconsin's creative class. Smart young people go where the culture is or where it's made and there is not much to speak of in Wisconsin. Communities with vibrant arts attract young, educated people -- just ask Minneapolis and Chicago or any of the thousands of young Wisconsin expats now living in these places. Furthermore, a burgeoning film industry will actually attract educated young people to the state. Richard Florida has spent most of his career examining this phenomenon and if anyone is interested in a more comprehensive look at how creative industries transform communities, go check out his work.

Objection: Wisconsin just doesn't "get" the film industry.

Contra Objection: Historically speaking this couldn't be further from the truth. In fact, there have been monumental contributions to film by Wisconsinites. Carl Laemmle founded Universal Studios and essentially invented the Hollywood studio system. His previous business experience consisted of managing a clothing store in Oshkosh for over a decade. Orson Welles transformed cinema forever with Citizen Cane. He was from Kenosha. A kid from Milwaukee wound up winning a couple of best actor Oscars and is one of the greatest leading men of all time. His name was Spencer Tracey. Another two-time Academy Award winner was some guy from Racine who went by the name Frederich March. Zach Snyder, the director of Watchmen, is from Green Bay.

Film making is in Wisconsin's blood. It's just too bad we have to go elsewhere to do it.

35 comments:

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One of the speakers at todays Joint Finance Hearings also spoke to the issue. He mentioned a refurbishing of a building and a couple of other items that the film company redid.

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