More and more films and television shows are being produced in Connecticut, earning the state the nickname "Hollywood East." But now, a children's advocacy group is calling into question the tax credit that makes filming in the state so attractive.
Representatives of Connecticut Voices for Children said they've looked at the numbers and state subsidies for the entertainment industry are a money-losing proposition for the state.
Instead of sparking a homegrown entertainment industry in Connecticut, the tax credits have largely been subsidizing out-of-state personnel and businesses, they said, citing data from the Connecticut Commission on Culture and Tourism.
Only 11 percent of the $113.2 million of state revenues lost through the “film tax credit” subsidized production expenses that were classified by CCCT as “actual Connecticut expenditures,” the group said.
The film tax credit has attracted many new productions to Connecticut.
With a new movie studio complex looking to set up shop in South Windsor, to big budget films like "Revolutionary Road" and "Rachel Getting Married" being filmed in state, to television shows like "Deal or No Deal" moving in to Waterford, there's a lot of support for these tax credits.
In February, hundreds came to testify at the Legislative Office Building in Hartford to ask the state to keep the credits, so they can keep their jobs.
Gov. M. Jodi Rell has proposed a cap on the credits, which advocacy group Connecticut Voices for Children, agrees is needed. The group is calling for either an elimination of the film tax credits or caps to limit revenue the state would lose through the credits.
“Connecticut has been hoodwinked by the entertainment industry into paying for 30 percent of their production costs. But the glitz and glamour of this industry shouldn’t blind us to the fact that these tax credits are big money losers for the state,” Shelley Geballe, a fellow at Connecticut Voices for Children and author of the report, said.
They are disputing that the film tax credit "pays for itself" by attracting more business to the state through production and the resulting economic activity. And they say, many times, the tax credit ends up covering the costs of production done in other states.
Connecticut Voices suggests limiting tax credits by:
Requiring that only in-state production costs can count toward the credit.
Establishing a monetary cap on the amount the state can lose through the film tax credits.
Eliminating the ability of entertainment companies to sell the tax credits when they have little or no Connecticut tax liability.
“Connecticut’s current film tax credit system makes no fiscal or economic sense,” said Jamey Bell, Executive Director of Connecticut Voices for Children. “These common sense reforms will help to limit any further damage to our state budget.”