Spend your summer with the St. Louis MCA!

"CODE RED" FOR THE MO FILM INDUSTRY...What MO Needs To Become Competitive Again

Recently, on a film set, I talked to two people who work in the Missouri film industry. One is a long-time veteran of the local industry who is moving to New Mexico; the other is a recent graduate who is moving to Louisiana. Why are they leaving? The answer is simple: Not enough work here.

The Missouri film industry is in grave danger. Competition among the states for feature film production is becoming more cutthroat -- especially in the Midwest. If the next governor and the MO legislature don't push for major new legislation next year, Missouri could lose tens of millions of dollars in economic development -- and the industry here could collapse. We could find ourselves back in the situation we were in just a few years ago, when we were lucky to get one feature film coming to the state every year or two.

A recent article in the "Wall Street Journal" illustrates just how competitive the business is becoming. Even California, which has never needed film tax incentives, is considering them, because so much production is going to other states. California is no longer worried about runaway production to Canada and Eastern Europe, because of the declining purchasing power of the U.S. dollar; they're worried about runaway production to Connecticut, Illinois, Wisconsin, Michigan, New York, and many other states. California is not worried about Missouri.

The tax credit for shooting a film in New York City was recently raised to 35% -- the same as Missouri's. If you were a film producer, would you choose to shoot your film in New York -- with its large, seasoned crew base, its easy access to any equipment you need, its large pool of professional actors, and its big soundstages ... or would you shoot your film in Missouri?

The solution is simple: If Missouri is to compete in this industry, we have to offer filmmakers a better deal than they can get anywhere else. That's the approach Wisconsin took when they passed their film tax incentive. That's the approach Michigan took this year. That's the approach Missouri needs to take NOW.

Back To 50% -- Or Even Higher!

Of utmost importance is getting the tax credit back up to 50%. In fact, Missouri needs to plan for future competition, so they may want to go even higher than 50%. Right now, even at a 50% tax credit, Missouri wouldn't competitive with Michigan and its 42% tax rebate, because Michigan gives filmmakers the money upfront, whereas Missouri gives it only after the production expenses have been audited and the tax credit has been sold.

For this reason, Missouri needs to push for something higher than 50%: first to plan for future competition; and second to put Missouri in a more competitive position in the present. While 50% (or higher) may sound high to some legislators, it's not unprecedented. Other tax credit programs in the state go as high as 70%. Hawaii has a 100% tax credit for high-technology firms, including companies providing infrastructure to the film industry. Missouri needs to think big.

An Unlimited Cap on Film Tax Credits

Second, Missouri needs a much higher cap. Currently, the cap is a paltry $4.5 million a year. That's not nearly enough to build an industry here. An unlimited cap -- as many states have -- would be best. However, Pennsylvania does well with a $75 million cap. We could go lower, but the lower we go the less chance we have of attracting major films. Any proposed legislation should start with asking for an unlimited cap -- and only go lower if the legislature plays hardball.

Make IL & KS Spending Count Towards MO Tax Credit

Third, expenses paid for crew, locations, and other expenses in nearby counties in Illinois and Kansas should be eligible for a Missouri tax credit. When a film shoots in Kansas City or St. Louis, they usually end up hiring people from Kansas or Illinois. They might want to use a location in one of those states. Unfortunately, these expenses don't count towards the Missouri tax credit. Productions are loathe to shoot in a region where a large chunk of their expenses won't count towards the tax credit. Missouri should try to get reciprocal arrangements with these states, so that any expenses paid to individuals or firms in certain nearby counties would get be eligible under each states' tax credit program.

There is much more that could be done to improve the dire situation here. But these three steps are essential. If we can get them, it would be a huge move in the right direction.

This would be a bold initiative. Sometimes it takes extreme measures to resuscitate a dying person -- and sometimes it takes extreme measures to resuscitate a dying industry. The Missouri film industry is dying. It is not healthy. It it were a hospital patient, it would be "Code Red." It's time to use administer CPR.

Mike Ketcher