Following the excitement brought by last year's big-budget production of the upcoming movie ""Public Enemies,"" the Wisconsin film industry has drawn extra attention. As the most high-profile Hollywood project to shoot in the state in years and the first blockbuster to take advantage of Wisconsin's film tax incentive, many hoped that a flurry of jobs and local spending would accompany the stars and bright lights. But even months after the cast and crew left the state, it is unclear exactly what benefits ""Public Enemies"" and the film tax incentive in general have brought to the area.
Gov. Jim Doyle appears dissatisfied with this lack of noticeable benefits. In his most recent budget proposal, Doyle set forth to eliminate the state's film tax incentive, which currently provides a 25 percent return in tax credits to film projects that shoot in Wisconsin. Instead of the tax credit, Doyle suggests replacing the current incentive with a flat $500,000 grant for projects that meet the criteria. Such a change has been opposed by the state Assembly's Joint Finance Committee, which informally voted in favor of keeping the tax credit system.
It appears that the most recent statistics on the film tax incentive indicate Doyle may have the right idea. This past Tuesday, a state study was released showing that it costs approximately 20 times as much to create jobs through the incentive compared with other state job-creation initiatives. At a time when government assistance to private enterprise is receiving more scrutiny than ever before, it seems hard to justify the film tax incentive as a cost-efficient way to create jobs in today's struggling economy.
In addition, the money that movie productions bring into the state has come into question, most notably through state Department of Commerce estimates that last year's production of ""Public Enemies"" claimed a $4.6 million tax credit from the state despite only spending a total of $5 million. For a net gain of barely half a million dollars, the tax incentive hardly seems worth the effort. Even the tax credit's effectiveness at drawing moviemakers to Wisconsin has come into question, as other states in the region—such as Michigan—that offer greater tax credits lure away filmmakers seeking a Midwestern setting.
Granted, there are other, more indirect benefits that need to be considered. For one, movies can bring increased notoriety to the state, resulting in greater tourism dollars. The artistic benefit also has some merit, as the tax credit is incredibly beneficial to independent filmmakers in Wisconsin—including local Hollywood hopefuls looking to break into the business.
However, with the issues facing the state budget and the economy, it is hard to justify any tax credit that has not produced concrete benefits for Wisconsin. Until an incentive is constructed that does otherwise, Doyle's plan to table the current film tax incentive and adopt a flat return seems to be the most practical option. If Wisconsin wants job creation and economic benefit, Hollywood is not the place to look.
