Lights, Camera, Subsidies: Legislature Debates Increasing Film Incentives
Republicans have accused Democrats of trying to turn Virginia into the next California. But there’s bipartisan support for bringing a little bit of Hollywood to the Commonwealth in the form of film subsidies.
Lawmakers in the Senate have already voted to increase those incentives, while a similar bill died in the House.
Skeptics say there's little evidence the subsidies are a good investment; a 2017 report by the General Assembly's research wing recommended lawmakers consider scrapping the program entirely.
Still. the impacts of Virginia's film program are uniquely visible compared to other state programs.
Squint, and you can see Virginia in dozens of TV shows and movies. From 1987’s “Dirty Dancing” to the 2011 Animal Planet show “Finding Bigfoot,” Virginia has served as a backdrop to decades of big screen drama.
Bringing contemporary production projects requires relationships and cash, according to Andy Edmunds, director of the Virginia Film Office.
“The phone will not ring if you do not offer some type of incentive,” Edmunds said. “There’s an old saying: it’s show business, not show-fun.”
Edmunds’ office has given out around $55 million in tax credits and grants to bring filmmakers here over the last five years. That’s chump change compared to Georgia, which handed out $800 million in tax credits in 2017 alone, and pales in comparison to other titans like New York ( $621 million in 2017 ) or neighbors like North Carolina, which has a $31 million annual cap.
Edmunds says he’s currently trying to get the makers of the Tom Hanks-produced HBO series “Factory Man” -- based on a book set in Virginia -- to film in the Commonwealth.
“We do not want that show to go to Georgia,” he said. “But in order to attract that show, we will need more fuel in the engine.”
Governor Ralph Northam’s budget calls for more than doubling the amount of grants that the state gives to filmmakers, up to $6.5 million a year.
Separately, the Senate passed a bill that would extend the sunset date on the credit until 2025.
Sen. Scott Surrovell (D-Fairfax) was one of only four members of the chamber - and the only Democrat - to vote against the bill.
“I just don't see how giving millions of dollars to Hollywood billionaires or billionaire companies is really a way to create economic development,” Surrovell said. “If I had $10 million to invest in a distressed area of the state, I'd prefer to invest in bringing a factory in or bringing an employer that's going to stay and create long-term jobs instead of just supporting the hotel or the food industry or something.”
That includes a 2017 report from the legislature’s research wing, the Joint Legislative Audit & Review Commission (JLARC). Their findings showed Virginia’s subsidies offered a “negligible” return on the state’s investment, creating about 100 new jobs a year between 2012 and 2016.
JLARC recommended the General Assembly consider cutting the program or altering it to focus on feature films, which it said offered better economic boost. Edmunds said the office adopted some recommendations, including a scoring system to evaluate films. But he said TV series, especially ones filming multiple seasons, offered much higher returns.
Adam Rennhoff, an economist at Middle Tennessee State University who co-authored a paper published last year on state film subsidies, said several states have struck their program in recent years.
“The results have not shown a whole lot of benefit, at least in terms of classical return-on-investment types of calculations,” Rennhofff said.
Rennhoff and Mark Owens, an associate professor of economics at Penn State University, used a “back-of-the-envelope” calculation to estimate each new job created by Virginia’s credit cost the state almost $20,000.
Still, the researchers said the subsidies do succeed at attracting productions that would not otherwise come to the state.
“A state like Virginia has a lot of characteristics that are desirable to movie producers,” Owens said, citing the geographic diversity.
Those filming locations can also boost tourism and name recognition, according to Edmunds with the Film Office. He said those are factors that studies haven’t fully accounted for in past studies.
“People still go and plan their vacation to go visit Mountain Lake resort in Giles County, Virginia because “Dirty Dancing” was filmed there,” Edmunds said.
Some filmmakers who receive the incentives also agree to create tourism ads or sponsored content for the state tourism office.
A 2018 episode of ABC’s “The Bachelorette” that was filmed in Richmond, for example, featured Gov. Northam on the stairs of the Capitol in a mock “Becca-lection 2018.”
Edmunds says that Capitol Square is one of the most popular filming locations in the state. Lawmakers are only there for a few more weeks. They’ll soon have to decide their price tag for bringing Hollywood to their doorstep.
Correction: An earlier version of this story misstated Sen. Louise Lucas' bill. The original bill would have increased the cap on film incentive tax credits, but that section was removed in committee meetings.