Oregon film industry supporters mob capital to keep tax incentives

Funds help build production companies, but critics call breaks ‘inefficient’

A flash mob of supporters for Oregon’s growing film and video industry is expected on the steps of the state Capitol Tuesday afternoon to support legislation that helps lure movies, television series and commercial productions to the state.

About 200 people could gather in Salem starting at about 3 p.m. to celebrate Oregon’s film industry and to push lawmakers to adopt House Bill 2167, which boosts tax incentives for out-of-state movie and TV production companies doing business here.

It’s an important financial lifeline for hundreds of skilled jobs in an industry that often can be cruelly cyclical, leaving production people unemployed for big chunks of a year.

“Economically, it is a big deal,” says Kathleen Lopez, chairwoman of the Oregon Media Production Association’s government affairs and business development committee. “If we don’t have this kind of incentive, this business will go away and you will have in this state what we had for many years, and that is a brain drain.”

Inefficient breaks for the wealthy HB 2167, awaiting action in the House Transportation and Economic Development Committee, increases annual tax credits for film production companies from $7.5 million to $20 million a year and extends those credits until Jan. 1, 2018. It also increases the maximum reimbursement for hiring local employees from 10 percent to 20 percent.

Click here to read House Bill 2167.

Another part of the measure continues a $500,000 Production Investment Fund to help local filmmakers, often small companies struggling to make their own films.

While HB 2167 is getting a lot of support from all kinds of groups, including business, labor and local governments, critics of the incentives say they are inefficient and ill advised as the state weighs chopping some vital services.

An early February report by the Oregon Center for Public Policy think tank found that the film production tax incentives “only enrich a fortunate few at the expense of other state spending priorities.”

The report also called for direct subsidies to local film productions as a more efficient way to boost employment and help state filmmakers.

“By and large it is the wealthy who take advantage of the film tax credit scheme,” according to “Reel Inefficiency,” the center’s Feb. 8 report on HB 2167. “Out of the approximately 1.6 million Oregon taxpayers in 2008, just 245 of them claimed the credit. Two-thirds of those claiming the credit — 161 of the 245 — belonged to the wealthiest 5 percent of taxpayers. Only 17 taxpayers who claimed the credit were from low- to middle-income households. Those 161 taxpayers from the top 5 percent of the income scale reaped 87 percent of the tax credits claimed.”

Supporters say the measure isn’t just about dollars and cents. It’s also about out-of-state companies coming here and helping to build Oregon’s film and video industry, Lopez says. As more film companies work in Oregon and hire local crews, the more people have an opportunity to learn the industry and then stay here to make their own movies, TV shows and commercials, she says.

“They hire actors, support personnel and vendors, and it makes a huge impact,” she says.

Talented people stay here During two hearings in early February, film and video industry officials, labor unions and others urged lawmakers to adopt the measure, which Gov. John Kitzhaber added to his 2011-13 budget proposal.

Vince Porter, executive director of the Oregon Film and Video Office, told the committee that since 2007, outside production companies had spent about $178.5 million in the state. With more TV and movie projects being filmed here, Porter says that total could be pushed to $275 million spent in Oregon in the past four years.

One big example is the TNT television series “Leverage,” which has filmed in Oregon for three years, with work starting on its new season this month. Porter says the series by Dean Devlin’s Electric Entertainment hired during its third season 471 local people — crew members, vendors and others — who worked 204,938 hours. The company also spent $350,000 on local actors and extras.

Other production companies are following Devlin’s lead, Porter says. HBO is filming a mini-series here, NBC is shooting a television pilot program “Grimm” in the Portland area this month and a feature film “Gone” begins production in April. IFC’s wacky, isn’t-Portland-weird sketch show “Portlandia” with Fred Armisen and Carrie Brownstein also is due back for a second season. Devlin is bringing another possible TV show to the area, with production of “Brain Trust” filming a pilot in Portland.

All that comes despite the fact that Oregon spends relatively little to lure those companies, Porter says. Dozens of other states and Canada entice film and video companies with bigger subsidies, tax breaks and sometimes lower costs, he says.

But Lopez says companies come here because the state has a vibrant film industry, with reliable crews and good locations. Even with the tax incentives, “we’re barely able to compete as it is,” she says.

“Yes, it is a location- and story-driven business. But those are the old days. Now it’s all about the dollars,” Lopez adds.

“We’ve grown because of the larger projects that come here bringing these talented people in who love it here and they stay.”

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