I can feel it! Can you? I’m speaking to those of us in the industry that have directed their energy to establishing film incentives that have the “teeth” necessary to draw the production business away from the competition elsewhere and bring it to New England.

Bobby Farrelly, who testified at Rhode Islands Film Incentive hearing and publisher Carol Patton discuss the need for incentive legislation in New England.  An IMAGINE Photo.

Michael Walbrecht,VP of Studio and Production Affairs,Warner Brothers Entertainment, Steve Feinberg. Director of RI Film and Television Office, and Russ Nissen, MBT, CPA, Executive Director of Feature Reporting, Twentieth Century Fox on the day of Rhode Island's Incentive Bill hearings. Photo by Lew Place.

While all New England States are rethinking their tactics for luring the industry to their state, Rhode Island, Massachusetts, Maine, and Vermont have pending legislation that has had hearings intended to better enable their states to compete for the business. Both Connecticut and New Hampshire are in the legislation planning stage. This region hasn’t been getting its fair share of the business, much less our unfair share (meaning more than most), which we so richly deserve considering our natural and native resources and our abundance of creative talent and ingenious technology.

The competition for the production business and the incentives offered by many countries and nearly 40 States to lure the “biz” is an ever changing landscape. New  Mexico has recently redoubled its efforts because the results have been so positive for the state (from $8 to $80 million in one year). They have upped their $7.5 million loan guarantee program to $15 million per production, and have expanded their Tax Rebate program to include post production, video games and film technologies. NM also creates cash flow for the production by offering 80% of the estimated tax rebate upfront, thereby creating cash flow for the early stages of production. They have also created a Job Creation effort by offering a 50% Wage Reimbursement for on-the-job-training used to upgrade existing crew and new union members.

Why the flurry of activity? Incentives work. It is important to understand that the entertainment industry is our nation’s number one, chief export. $400 billion that once was spent in the U.S. is now going to Canada and foreign shores. New England has been out of the loop for 3 years now, losing hundreds of millions of dollars every year. Studios have told us; don’t come back until you have something to offer us.

The two key words the Motion Picture Studios and Major Producers want to hear from us are “bankable incentives.” It is important to understand fully that decisions as to where a film will be shot are made by committee with only budget considerations in mind. That would be a committee of lots of accountants!  Not the stars, not the A-List Director (unless you’re a Clint Eastwood or Martin Scorsese), not even the Producer, but the committee with lots of accountants who look for the best bottom line opportunity and those “bankable incentives.”

 “Bankable incentives” means soft money from incentives that is available right away and tax credits and production credits that are recoverable by non-resident taxpayers through the sale, transfer, or conversion of such credits. In Louisiana, the sale and transfer of incentive tax credits has created a whole new industry to manage those sales and transfers. This burgeoning business is so good they take it upon themselves to encourage the production business to come to Louisiana thereby providing an additional marketing arm for the state, “marketing” being the operative word. It’s good for business.

So the key is to level the playing field so we can compete, initiate the aggressive and proactive marketing, and then rely on our superior resources, talents, and great customer service (one-stop shopping). As the business comes, and it will if incentivized, the infrastructure will follow, our talented people will return, and our future will be much brighter.

Rhode Island had its legislative hearing last month. I attended, as did many others from Boston, Dona Sommers, Executive Director of AFTRA/SAG, and Chris O’Donnell, Business Manager of IATSE 481. House Speaker William J. Murphy, D-West Warwick, and Senate President Joseph A. Montalbano, D-North Providence, have sponsored identical bills providing an incentive package closely approximating Louisiana’s incentives. Murphy took the unusual move of testifying before the Committee in support of the bill. He said this is an untapped economic initiative that the state should seize.

Michael Corrente, Bobby Farrelly, and Blake Masters (Creator of “The Brotherhood”) also testified in behalf of the importance of film production incentives. “If you pass them, they will come,” Corrente told members of the House Finance Committee. The Providence Journal printed on April 8, 2005 that the “Farrelly brothers told the state in October that if this bill passes, they will film their new movie “The Three Stooges’ in Rhode Island.” They had planned to film in Louisiana because of tax breaks there.” Additionally, a host of films projects are checking in each week to see if the legislation has passed yet.

Steve Feinberg, director of the state's film and television office, went to Los Angeles and met with every studio and asked this question, “What does Rhode Island need to offer you to get you to come to our state to make movies?”  Armed with those answers, the legislation was fashioned and is in the process of passing, hopefully within the next 4 -5 weeks, perhaps less. An important part of this legislation is that it is retroactive to January 1, 2005. The Speaker and the Senate President’s identical bills are expected to pass in Rhode  Island.

In Massachusetts, the situation is a little bit different as there are competing film production incentive bills from the House and the Senate. IMAGINE examined these bills early on and came out in support of H 3823 as amended. The bill was filed by Rep. Thomas O’Brien (D) Kingston at the request of Academy Award winning actor Chris Cooper and his writer-actor wife Marianne Leone Cooper, both of whom were present to testify in behalf of the bill at the Massachusetts State House on May 10th. The bill is co-sponsored by Rep Brian P. Wallace (D) South Boston, Rep. Robert K. Coughlin (D) Dedham, Rep. James B. Leary, (D) Worcester, James A. MacDonld. The Bill had a great hearing expedited by Representative John Binienda, Chairman of the Joint Committee on Revenue.

Publisher Carol Patton, Finish Editorial COO Don Packer, South Boston’s Senator Jack Hart, Chairman of both the Economic Development and the Tourism Committee, and IMAGINE’s Government Relations Consultant Ed Rae meet after the hearing for H 3823 at the Massachusetts State House. An IMAGINE Photo.

Everyone in this photo testified for H 3823. Dorothy Aufiero, Chris Cooper, Marianne Leone Cooper, Representatives Thomas O'Brien and Brian Wallace. An IMAGINE Photo

The bill clearly has the support of the industry over the competing bill. The competing bill is not scheduled for a hearing as we go to print, though is thought to have some support.

H 3823 as amended is also modeled after the Louisiana Law, and why not; Louisiana’s production dollars soared in 3 years from $45 million to $230 million to $350 million per year and still growing!

Representative Brian Wallace’s testimony received a resounding and standing ovation as he built his impassioned plea for the bill’s passage to the Joint Committee on Revenue. I’ve never seen Brian Wallace nervous, but he confessed to it as he took the stand right in front of where Chris Cooper was sitting, he noted that the presence of Mr. Cooper put extra pressure on him. When Chris Cooper took the stand in support of his wife Marianne’s testimony, he said. ”to the gentleman who said he was a little intimidated by my presence, you have no idea how intimidated I feel. The response was laughter and warmth for both intimidated participants.

Thomas Petrolatum, Speaker Protem, testified for the bill showing the committee leadership support.

Don Stirling, Executive Director of the Massachusetts Sports and Entertainment Commission spoke to taking the word “business” in show business more seriously. Disney’s Mary Ann Hughes explained how Disney builds its budgets and selects its locations solely on serving the project’s bottom line, which means they have frequently selected Louisiana lately, rolling productions one after the other so they don’t lose their crews to other anxious moviemakers. Director Sam Weisman addressed wanting to live and work in Massachusetts and the other talented people who are like him and want to come home. Marianne Cooper got an excellent response from the Committee and the gallery when in her best Massachusetts accent she said, “Massachusetts is just too ‘SMAHT’ not to have this bill.” The newly formed Massachusetts Production Coalition president Joe Maiella asked that the bill be passed for the people standing in the back of the room referring to everyone who work on camera and behind the scenes, in other words those who do the work.

House Bill 3823 can level the playing field so that Massachusetts can compete. We need to get it passed, with the “teeth” of it intact and get it activated as quickly as possible. This bill (as amended) specifically names the Massachusetts Sports and Entertainment Commission as its sole service provider, passage of this bill would go along way in clearing up the ambiguity of which office is the real office that represents the Commonwealth. This clarity is paramount or studios and major producers will not come here. Security for bringing millions of dollars to a state requires that the imprimatur and the underpinning of the state be clearly defined and visible, like a guarantee.

There is opposition and competition for this bill, which offers uncertain scenarios even though it gathered good support from testifying legislators and the industry at its hearing, there is no guarantee this bill will pass. The support of the House Speaker and the Senate President is helpful, but remember film incentives present a brave new world of uncharted waters for the Commonwealth. Incentives are complicated. This is the time to make certain the amendments to the bill serve the industry and match the competition. This is the time to work everyday to be certain every legislator is educated about the bill and the economic impact it will have on the state. Every week talented and savvy artists and technicians leave our borders to move to NYC and LA where they will pay their taxes to the states of New York and California. They want to work here and will return when the work comes.

Earlier this year the State of Vermont commissioned an Economic Impact Study and they have received their preliminary report. Currently the proposal under consideration in the Vermont legislature is a credit on withholding liability equal to 10% of total payroll. To qualify the individual film project would require having a total payroll of not less than $750,000. The official title of the proposal is S.165. sec 10 32 VSA 5929b as amended.

The key to this proposal is that unless and until such production came to the state, there would be no cost to the state.

Vermont already has a sales and use tax exemption in place, and breaks on hotel taxes for qualifying productions. There is also a provision in the Vermont tax code that restricts the tax liability of leading actors to the rate payable in their home state.

In January 2005, the Vermont Economic Development Agency (VEDA) instituted the Film Assistance Program, offering loan guarantees for certain film productions. The 10% tax credit mentioned above is currently being considered by the State Senate -- the matter is still under deliberation, but Vermont may have more to report in the weeks to come.

Maine’s initiative emulates more its neighbors to the North. Certified productions would receive a 100% rebate of Maine taxes paid on the wages of non-Maine residents. Certified productions would receive a rebate of 200% of Maine taxes paid on wages to Maine residents, accumulative during a 12 month period. This would expand hiring of Mainers and Maine’s in-state production industry. The incentive program was crafted with Maine Revenue Services to insure that it is workable and effective. The Maine Film Office, The Maine Film Commission and the Maine Film & Video Association are all in support of the bill.

It’s in the air. The time to act is now. IMAGINE will have an update for you in our combined June/July issue and the results in our August issue.

We have a great issue for you this month. I especially wish to welcome the emergence of the Massachusetts Production Coalition (MPC). It promises a most welcomed professional support for the industry and it looks like it is off to good start. You can read the story on page 9. In this issue we pay homage to Cinematographer greats Gordon Willis and Brian Heller, our cover story. We are planning our summer festival schedule; some of the previews are in this issue. W hope to see each and every one of you in Newport, Nantucket, P-Town, Plymouth, Waterville, Martha’s Vineyard, Woods Hole, Providence, and more! Go Red Sox!