How Washington Fails in Filmmaking for Economic Development

Updated Feb. 4, 2012

Film-production workers, actors, and movie fans are suffering the same fate as many businesspeople in Washington state. They are sleepless in Seattle now that the Legislature has canceled its successful program of incentives for production studios in filmmaking.

In 2009, this space congratulated the state for offering a 30-percent tax incentive. During this year’s legislative session, I received almost daily updates from Washington Filmworks regarding its lobbying activities. I never dreamed the Legislature would kill the incentives. It was a stellar approach to economic development. This stunned me.

After all, the state has a troubled economy. Filmmaking creates jobs while enhancing the state’s image. Movies entertain and inspire moviegoers. And the incentives didn’t hurt the state’s treasury – canceling them would.

But effective in 2011, the Legislature killed the incentive program. You can almost envision planeloads of filmmakers flying over the state to make movies in Canada. Enlightened Vancouver still offers advantageous tax breaks to attract film projects. So does Oregon.

For economic development, it doesn’t take a study for me to realize the benefits of filmmaking to the state. Ostensibly, lawmakers see it differently. They think the state will benefit more from by providing incentives for startups in other industries.

Lawmakers fail to understand that the state would not lose anything by continuing the incentives and everything to gain. Published reports of Washington Filmworks’ data indicate some $5.4 million in incentives produced 23 projects last year and $18 million in spending. So consider the multiplier effects.

Nor do lawmakers understand a salient, intangible return on the investments.

Consider: The misery index in Washington is high. The morale among residents in many quarters of the state is low. However, the presence of a film crew on location inspires interest. Movie star sightings are invigorating for movie fans and TV watchers. It’s a mini-fantasy, a vacation from financial woes.

During a downturn in the late 1970s from my office window on Wilshire Blvd. in Los Angeles, I witnessed a most-astonishing site: Waves of excited people – thousands of office workers – flooded the street to watch Robert Wagner and Stefanie Powers act in front of cameras for an episode of the hit TV show, “Hart to Hart.”

Incalculable image value

It was 35 years ago this month as a radio news director, I covered an event that drew scores of reporters from all over the world to Rancho Mirage, Calif. Frank Sinatra was marrying Barbara Marx. All those reporters waited outside in scorching 118-degree weather for hours just to witness the wedding party of stars and dignitaries leave the ceremony. National media, including the NBC/NIS radio network, eagerly welcomed my freelance reports.

So for me today, any thought of revoking film tax incentives prompts me to react this way: “What a revolting development this is.”

You might recall it was the signature phrase of the character, Chester A. Riley in “The Life of Riley” in a radio show from 1944-1951 and TV show from 1949-1950 and 1953-1958. William Bendix acted as Chester Riley, whom I happily met and to whom I once served food as a teenage bus boy in Palm Springs.

My sense is that all states should keep the tax incentives in place. (Admittedly, I’m predisposed to understand the benefits. In addition to my journalism background, I’ve produced and voiced hundreds of TV commercials.)

For the first time in California’s history, state lawmakers approved a $500 million incentive plan starting in 2009. It included tax credits ranging from 20 to 25 percent. But even that was a bit paltry compared to other states. But California lawmakers knew they had to compete.

As a kid growing up in Palm Springs, it was common to see movie stars such as Mr. Bendix, Lucille Ball and Dean Martin. Although I come from a middle class family, Bob Hope and James Stewart maintained homes less than a block away. It was quite an experience watching Mr. Hope wash his Chrysler. Once, I nearly hyperventilated when he spoke to my brother and me when we were playing in the street after a rainstorm – sailing Popsicle sticks in a puddle.

Later, as an 11-year-old newspaper boy delivering The Desert Sun newspaper, my customers included impresario Billy Rose, comedian Jack Benny, and movie mogul Darryl Zanuck. Each month, it was fun standing outside waiting to be paid by Mr. Zanuck – he threw frequent pool parties with a bevy of starlets.

Serious business

Aside from the fun and glamour of filmmaking, it’s a serious business.

The Washington Filmworks’ program worked this way:

  • Washington Filmworks is a private non-profit that offered cash back in a 30 day-incentive.
  • Washington state businesspeople received business and occupation tax deductions and a source for passive income from their investments.
  • Productions were required to spend $500,000 for feature films, $300,000 for TV shows per episode, and $150,000 for commercials.
  • Filmmakers had to apply with a script, line item budget, proof of funding, a finance plan, and a producer’s letter of intent.
  • Washington Filmworks’ board would either approve or reject the project.

In addition, the Seattle Office of Film + Music offered $25 a day permits when using city owned property. The filmmakers were exempt from sales and use taxes on rental of production equipment, and sales tax on the purchase of production services, unless the production equipment was purchased.

But now, we are sleepless in Seattle for dubious reasons.

We are telling filmmakers we no longer welcome their business. It reminds me of a line in “Rocky IV” during Rocky Balboa’s patented comeback against a superior opponent. Sportscaster Barry Tompkins asserted: “It’s a question of who wants it most.”

In real life, Mr. Tompkins still works as a sportscaster. His line is apropos today. Washington state lawmakers are throwing in the towel. Let’s hope Washington Filmworks is more successful telling their story at the next legislative session.

From the Coach’s Corner, for more information on filmmaking see these helpful Web sites:

“A child of five would understand this. Send someone to fetch a child of five.”
Groucho Marx

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

Seattle business consultant Terry Corbell provides high-performance management services and strategies.