Gov. Bobby Jindal’s new tax plan proposal is causing concern in film industry circles across Louisiana, and some of those affiliated with the film industry fear the possible changes will devastate the industry.
The part of Jindal’s plan that raises eyebrows in the film industry include possible changes to Louisiana’s Motion Picture Investor Tax Credit. The tax credits have lured in various film companies to the state in the past, and Louisiana has in turn benefitted drastically as a result, said Executive Director of the Louisiana Film and Entertainment Association David Tatman.
Jindal’s tax proposal would place a $1 million cap on “star talent,” which refers to the amount an actor can be paid by production companies and then applied as an expense for tax credits, Tatman said. There is currently no cap on actors’ salaries.
“This would have a phenomenal impact on our industry,” Tatman said. “It will make Louisiana less attractive to do larger productions.”
Tatman expressed concerns that film industry leaders will move out of Louisiana and take their business elsewhere.
“Georgia, for example, would be a state that would become much more attractive than Louisiana, if this were to pass,” he said. “In the past, other states have tried to do similar things like New Mexico and Michigan, and they made changes to their program, and Louisiana has actually benefitted from it because that means the productions and much of the activity moved to Louisiana.”
Tatman said the tax proposal would have a tremendous impact on what has grown into a large industry in the state.
“Right now we estimate there’s somewhere around 14,000 people working in the [film] industry in Louisiana,” he said. “According to our numbers, we are close to or past the seafood industry in terms of the number of jobs that are produced in the state. That’s pretty significant, as [Louisiana is] one of the largest seafood producers in the country.”
The tax plan would have a dramatic effect on companies such as the Baton Rouge-based Celtic Media Centre, which is the largest studio facility in the state, said Director of Studio Operations Patrick Mulhearn.
“It would be devastating to us in particular because we tend to get these really big movies that have big stars in them,” he said.
Though the film industry would be directly affected, Tatman said the Louisiana economy will take a hit as well.
“Then there’s the other part of this that trickles through the economy and that is it’s not just actors, or lighting people or sound recording – it’s plumbers, it’s electricians, it’s caterers, it’s hotels, it’s restaurants,” he said.
Mulhearn said he and his colleagues are optimistic the Jindal administration and LED will compromise on the issue.
“I would think that they’re going to take a harder look at it I’m sure, I would be shocked if there isn’t some sort of compromise that happens between now and the end of the session,” he said.
The LFEA is currently working with the administration to ensure changes made will not negatively impact the state’s film industry, Tatman said.
“We are working with them, we will continue to work with them and the legislature to make sure that whatever we do, whatever changes are made to the program, that it doesn’t put Louisiana at a competitive disadvantage with other states,” he said.
According to a Nola.com article, Louisiana Economic Development secretary Stephen Moret said the Jindal administration is committed to the film industry and the proposal would have “a negligible impact” on many of the productions.
“We will continue to work closely with the industry on potential tweaks to our proposal in order to do what is best for Louisiana’s economy,” Moret said according to the article.
According to Mulhearn, the tax credits and exemptions that companies receive in Louisiana prohibit money from going into the state treasury. The portion the film industry prohibits is miniscule, he said.
“Where film falls on the scale of everything that’s out there, it’s really less than 2.4 percent of an impact… where all the money that’s not coming into the state treasury, the film industry is only responsible for less than 2.4 percent of that,” he said.