SHREVEPORT, La. (KTAL/KMSS) – The Louisiana Legislature is hearing testimony as committees determine whether or not certain changes to the state's tax code should move to debates and eventually a vote as requested by Governor Jeff Landry.
On Thursday, the House Ways and Means Committee met to hear from legislatures about their proposed changes or potential elimination of certain taxes as drafted in several bills. During the discussion of HB1, Jason Waggenspack, President of Film Louisiana, Trey Burvant, creator and VP of Studio Operations at Secondline Studios, and Jan Moller, Director of Invest in Louisiana, were present to voice opposition to a portion of the bill that seeks to cut the state's film tax credits.
Louisiana's film tax program was created through a bi-partisan piece of legislation drafted by Congressman Steve Scalise and Former Congressman Cedric Richmond in 2002 when they both served in the Louisiana Legislature.
Waggenspack shared a little bit of Louisiana's more than 100-year history of filmmaking, including the production of Tarzan of the Apes, made in Morgan City, to highlight the more than 3,000 film projects made in Louisiana over the years.
Since the creation of the film tax program more than 40 states have used Louisiana as an example to create similar tax programs that encourage filmmaking, including neighboring Arkansas, Mississippi, and Texas; as well as 40 countries. The program pushed Louisiana into a space to call itself Hollywood South and moved it to the nation's top five film production locations.
"We bring in a billion dollars annually in sales to the state of Louisiana; over $360 million of that is Louisiana local payroll," Waggenspack said. "So if you look at it like this $180 million in our tax credit program that goes out $360 million goes directly to Louisiana residents and over 600 million dollars in sales on top of that comes to the state of Louisiana, it is the definition of economic development."
Waggenspack shared how those film dollars have translated into the growth and expansion of digital media programs in Louisiana schools. Films can also directly impact tourism as movie watchers seek to visit places they may not even know exist.
An example of this is the 2017 movie Girls' Trip, which grossed just shy of $141 million at the box office.
The film was shot on location in New Orleans and centered around a trip to the annual and very real Essence Music Festival. The comedy's wild box office success opened the door for an unexpected re-energizing of the festival and led to groups of women to New Orleans for July 4 weekend to enjoy the music festival and embark on "girls' trips" of their own.
Although the three men disagree with changes to the credit that would directly impact the film industry, they agree that tax reform is needed; however, cutting some corporate taxes while reducing or eliminating taxes for other industries is where they seemed to most object.
Burvant highlighted the high paying jobs afforded to those in the film industry saying, "The average wage of a film worker is between $65-68K per year and that's not including pension, health, and benefits." He went on to highlight the infrastructure investment made by expanding film production facilities, vehicle fleets and other brick and mortar needs of the industry.
Moller covered the nuts and bolts of Louisiana's tax code explaining how stability in the tax code is what's needed to move forward toward a more simplified means of tax collection. Highlighting that yearly deficits will be experience if the legislation moves forward as written and cuts in the budget will have to be made in subsequent sessions.
"If everybody gets a tax cut in this plan then what you're doing is cutting the amount of revenue available in the state for services," Moller said.
He went on to explain that while taxes are factored into decision-making by corporations and families seeking to relocate, they also consider quality schools, infrastructure, safe communities and good amenities - "the things we buy with our tax dollars."
Louisiana Representative Mandie Landry from New Orleans raised several questions about how locals benefit from the industry Waggenspack responded by listing a total of 1,500 jobs on created on a production that do not involve being a big-name Hollywood actor.
Landry mentioned that many of her colleagues incorrectly associate the film industry as an exclusive benefit to the metro New Orleans area. However, she quickly noted that sales taxes, payroll taxes and purchases come directly to the state. The highlighting of educational opportunities provided by Film Prize, created here in Shreveport, was also meant to drive the statewide benefit of the film industry.
Movie making is a plan then hurry up and wait endeavor that involves many moving pieces. Studios are usually preparing years in advance to determine the feasibility of films and a state that once incentivized creative works and is now considering axing the major benefit of filmmaking in Louisiana rather than California or another state puts those projections in peril.
"Trey and I hear from studios quite often that are looking for projects and trying to figure out their plan two, three years in advance. So if we're looking at something that is going to be unstable they're not understanding what the credit is going to be in those years subsequent they're obviously going to look elsewhere," Waggenspack said.
Another net benefit is the size venue required to create motion pictures and television series'. Production studios often come in and revamp abandoned warehouse and retail spaces.
Raising the issue of economic development in Shreveport through the venture between Curtis "50 Cent" Jackson's G-Unit Studios and the city of Shreveport.
"Shreveport looks like they're about to really bump up their film industry up there which I didn't know about until recently," Landry said. She then asked the panel to speak about how the industry and appeal of the credits were a driving factor in 50 Cent's purchase of the former Millineum Studios. Which also relieves the city of annual maintenance and upkeep costs of the facility.
Waggenspack responded by explaining some of the plans for Jackson's studio, the adjacent land and overall plan to revitalize downtown Shreveport which would make the city home to the second-largest African-American-owned studio in the country behind Tyler Perry Studios in Atlanta.
"We've already been chatting with their group over there and they're looking to really ramp up in the beginning of the next year and start some full productions there which were really excited about," Waggenspack said.
Watch the full Ways and Means Committee Meeting here.
