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Old Tucson Studios is part of an effort by Arizona’s film community to encourage Arizona lawmakers to enhance Arizona’s Motion Picture (MOPIC-SB 1409) Tax Credit Incentive program which is aimed at attracting film and television projects to Arizona. Following is an editorial by Old Tucson Studios CEO Pete Mangelsdorf. For additional information, check out the Tax Incentive Video on You Tube that features interviews with people who own businesses that have benefited economically in the past from film and video projects shot here in Arizona and the website www.azfilmandmedia.org.
ARIZONA FILM IS DYING ON THE VINE!
Through tax credit incentives and other carrots, Governor Jan Brewer is doing everything she can to attract industries like solar to Arizona. Governor Brewer should apply the same tactics and urgency with the Motion Pictures Production Tax Incentives Program or MOPIC. Because of its diverse beauty, proximity to Los Angeles, and experienced crews, the television and film and television industry once flocked to Arizona, bringing high-paying jobs and trickle down economic booms wherever it set up shop. However, the financing of television and movies has dramatically changed since that era. Today, for the most part, production companies, even big Studios, primarily fund movies through private investment. To supplement private equity, producers turn to tax credits and other forms of incentives offered from state to state. Selection of a location is almost always predicated on going where the most lucrative credits are.
Over 40 States offer these incentives and we are losing out badly to States such as New Mexico and Michigan. There are misperceptions at the state capital about our current and inadequate program. These misperceptions stem in part from a Department of Commerce economic impact study (DOCs oversees the MOPIC program) that dramatically underestimated the real economic impact of our industry here in Arizona. In response, the Arizona Production Association, the state’s most prestigious trade organization, commissioned a study in 2009 which looked more deeply at the economic impact and found that the DOC’s program analysis only represented the economic impact of those film projects that applied for and were approved for tax credits. But when examining the entirety of film production in Arizona, the new study found that the economic impact is far more significant. The overall industry has an economic multiplier of 3.2, meaning that for every $1.00 spent by the film industry, another $2.21 is generated in additional spending. To compare the state’s analysis with the APA’s study please go to www.azproduction.com, click “Resources” and find “Independent Review of MOPIC Tax Incentive Program.”
No state program is implemented without challenges but make no mistake, this MOPIC program produces good, high- paying jobs with no negative impact on the environment, just the kind of jobs we want in our state. Beefing up the MOPIC program would bring stimulus to local economies thereby increasing the long term tax base for our state that we all know is flat broke. Helping the film industry here is no bailout similar to the one the Federal Reserve gave banks. These improvements will lead to immediate job creation and bring millions of dollars to local economies throughout the state. This is not an elitist program as most of the job creation is directed at “below the line” film workers who do the “heavy lifting” of productions such as lighting and electrical work.
At Old Tucson Studios, we get serious looks from major studios and production companies every month but many of them pass because they just cannot justify filming here when the incentives are so much better in other States. Bear in mind, producers see no tax credits until they employ Arizonans and spend a very significant amount of money in hotels, restaurants, stores, on construction materials and other products and services. In this severe Recession, the Governor has reached out to other industries to build here in Arizona so why not film? Since its program’s inception, New Mexico has built several brick and mortar studios, bringing real jobs that stay in New Mexico and increase tax revenue for years.
The Arizona MOPIC program is set to expire in 2010. We cannot let this happen. To make this program more competitive, the legislature needs to extend the program five years, lower the employee residency qualification from 50% to 25% (out of state crew and talent pay Arizona payroll taxes while working here and their wages can’t be used as a qualifying spend towards a Tax Credit), and finally, craft a reasonable time line for the Arizona Departments of Commerce and Revenue to complete the post approval process. If as a state, we can muster the courage to do these three things, Arizona would see immediate economic rewards in the form of jobs and stimulus to local economies. We cannot afford to say “no” to an improved MOPIC program. Contact your State Legislator now and let them know what they have to do to make this program work for all Arizonans.
Pete Mangelsdorf
CEO
Old Tucson Studios
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