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Friday, February 15, 2019  Spokane, Washington  Est. May 19, 1883
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News >  Business

Rebate for filmmakers turns out to be flop

Idaho’s film and video industry is still reeling from last week’s surprise defeat of a $1 million incentive package, the disappointment salted by the inadvertent absence of two legislators who had intended to vote for the measure.

That plot twist sank Senate Bill 1156 by a 35-34 vote in the House of Representatives. The bill had passed the Senate 23-12.

“Everyone thought that the votes were there,” says Rathdrum’s Russ Simons, one of five members of the Idaho Film Industry Advisory Committee.

The $1 million would have rebated companies for salaries paid Idaho residents involved in every aspect of film and video production, from photography to sound to wardrobe to special effects. Rent and leasing expenditures also qualified.

A single production would have been eligible for up to $500,000 in rebates, but no more than 20 percent of total production costs. Backers projected an economic impact up to $36 million.

If that seems a stretch, Utah claims a 15-to-1 rate of return last year on its 10 percent tax rebate.

Idaho’s $1 million come-on had been set aside last year for nurse and truck driver training, but no one applied for the funds. The legislation defeated last week would have redirected the money to film production.

The rebates were supposed to be the second and more important step toward bringing Idaho closer to parity with neighboring states also trying to get Hollywood’s attention. Most states offer some assistance, but the national and provincial governments of Canada have set the pace. British Columbia has been particularly aggressive and successful.

Washington has set aside a fund of as much as $3.5 million a year donated by companies that can use the contribution as a credit against their business and occupation tax payments. The funds will cover 20 percent of production costs, up to $1 million per project. North by Northwest Productions, of Spokane, last month received the first grant, for $150,000.

Idaho got started last year by enacting a 5 percent sales tax rebate, a concession Simons says was intended to show the state wanted to be a player, if only a bit one.

So far, no one has taken advantage of the concession, says Peg Owens, of the Idaho Film Bureau. She says many production companies organize to make a single film. They rent or lease most equipment, so the sales tax rebate has little value. Labor costs, on the other hand, represent the bulk of a production budget. That’s where the rebate fund would have helped. But won’t, at least not for another year.

Legislators who voted against the rebate said helping Hollywood was way down the state’s list of priorities and, anyway, Idaho’s scenery sells itself. Rep. Bob Nonini, R-Coeur d’Alene, told an Associated Press reporter the producers of “Dante’s Peak” and “Heaven’s Gate” came to North Idaho without state financial enticements.

Monday, he said he wants to see whether Utah and New Mexico incentives work before endorsing an Idaho version.

Owens notes “Peak,” released in 1997, and “Gate,” released in 1980, predated widespread state and provincial adoption of incentive packages. The game has changed.

When producers call, she says, “Before they even ask about locations, they ask about incentives. The fact is, location isn’t it anymore. They go where they can stretch their dollars.”

And legislators’ resentment of Hollywood and its over-the-top personalities is misplaced, Owens adds.

“There are rich producers and there are truck drivers,” she says. “We want to employ more of the truck drivers.”

Owens says renewed education efforts may convince reluctant lawmakers that it takes more than a pretty face to catch Hollywood’s eye. If Idaho does not flash some cash, the state may end up on the cutting room floor before a single camera rolls.

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