Rob-Peter-to-Pay-Paul, the Sequel: Paul on Steroids (with update)
Chuck Sheketoff
In 2003, the state set up the Oregon Production Investment Fund to subsidize film and video productions made in Oregon.
How, you might ask, does Oregon come up with the money to subsidize movie moguls? Sadly, the answer is a sequel to the situations described in End Oregon's Rob-Peter-to-Pay-Paul Funding Schemes. Only this time, Paul is on steroids.
Here’s how it works. For every $100 an individual or corporation donates to the Oregon Production Investment Fund, they get a tax credit out of the General Fund worth $111. Yes, you read it right. Those who donate get back more from the General Fund than they contribute to the earmarked special subsidy fund. Instead of paying taxes that support schools, health and human services and public safety, contributors earmark some money for the film subsidies and then take even more out of the General Fund.
It’s such a great deal for the individuals and corporations who contribute that all of the tax credits are sold out through tax year 2011, and the agency that doles out the subsidies to the movie moguls is asking the legislature to pass SB 621 so that they can issue 50 percent more tax credit subsidies.
Of course, there’s a real-life cost to these earmarks and tax credits. Oregon’s thriving film industry has not turned us into a Hollywood fantasyland, where machine-gun bullets never hit anyone, where you always find a parking space midday downtown right in front of the restaurant, and where the good guy always gets the girl.
The tax credits come straight out of Oregon’s General Fund — it’s money that might otherwise go to schools, public safety and health and human services.
Right now, the tax credit that supports the Oregon Production Investment Fund is draining the General Fund to the tune of $5 million each year, the annual cap on the program.
The Governor and his Office of Film and Video, however, are pushing to expand the amount of credits they can issue by 50 percent, to $7.5 million a year (PDF).
If SB 621 passes, each biennium the Oregon Production Investment Fund will collect $13.5 million from wealthy Oregonians, all of which is earmarked to subsidize film and television companies. Meanwhile, the tax credits will drain the General Fund of $15 million, with about $14 million of that (about 94 percent) going to the wealthiest 5 percent of income earners in Oregon.
Subsidizing the film and TV industry may be good for Oregon and its economy, but the tax credit funding scheme that enriches primarily Oregon’s wealthiest households makes no economic sense.
Instead of passing SB 621 and spending $15 million each biennium on tax credits for the wealthy, it would be much more efficient for the legislature to appropriate $13.5 million to the Oregon Film and Video Office for them to dole out to moviemakers. The $1.5 million in savings that otherwise would go to wealthy individuals and corporations through the tax credit scheme could then be invested in Oregon by buying back some of the budget cuts.
The problem with that common sense approach, of course, is that a proposal to spend taxpayer dollars subsidizing Hollywood filmmakers probably wouldn’t fare very well in the Ways and Means budget prioritization process. Not when it’s matched up against an education budget that cuts school days and increases higher education tuition or against a human services budget that denies day care and job training assistance to low-income families with children.
The proponents of the tax credit think it’s a great deal for Oregon and our economy and have an expensive consultant’s report (PDF) telling them what they wanted to hear to prove it. Yet, they’d rather hide their spending in the intricacies of the tax code than compete head-to-head for General Fund dollars with other public services.
Regrettably, even though Oregonians are going to see public services reduced because the economic crisis has wreaked havoc on state revenues, the Oregon Senate Finance and Revenue Committee yesterday voted in favor of the SB 621 expansion. The three Democrats on the committee voted in favor of the expansion, while the two Republicans voted “no.”
Maybe I took Mr. Smith Goes to Washington too seriously, but I’m optimistic that the full legislature will recognize SB 621 as economic folly and not only refuse to expand the Hollywood subsidy scheme but instead give it the curtain call it deserves.
Reality News Update: Oregonians are not the only saps out there
This may be small comfort, but Oregon is not alone in sacrificing education and other key services to line the pockets of Hollywood.
Check out yesterday’s AP story States give Hollywood a fortune in tax
Breaks (PDF), which begins:
Many states that are cutting spending on schools, roads and other basics have been lavishing hundreds of millions of dollars in incentives on Hollywood studios to lure TV and movie productions — this, despite scant evidence that taxpayers come out ahead on such deals.
This Mad-Max race to the bottom must stop. We need federal legislation to stop the beggar-thy-neighbor-with-tax-subsidies strategy or governors and state legislatures to get their priorities in order and stop offering the cookie jar for these temporary jobs that don't pay for themselves.
Chuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org
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Jun 2, '09
Great post! It's not like I have a ton of readers, but I'm sending my faithful dozen. I hope you're right and that it's curtains for SB 621.
Cheers!
Jun 2, '09
Dear god, I agree with Mr Sheketoff.
This is disturbing for multiple reasons, but the big two: 1) Why the heck are movies such a big deal? They are in (maybe for a scene) and then gone. No perm jobs for all that tax money. 2) It is a back door on budgeting. We can take out 111% of each dollar out of the general fund without a vote or legislative action - To make movies!?!?!?
Jun 3, '09
Looks like a typical Portland scheme to enrich the few at the expense of the many. And just the same they have a report that says it makes sense. The PDC Urban Renewal schemes make this look like chump change but I am glad to see Chuck recognizing this.
6:21 a.m.
Jun 3, '09
Steve, of course the legislature voted to do this -- this is a tax credit - a tax expenditure. They will have to vote again when its sunset comes due (it is being extended by a bill moving through the legislature), and will be voting to affirm the credit when they vote on SB 621.
Jun 3, '09
OK, then the Legislature was complicit in this bit of chicanery. Thank you for bringing it up anyways.
Jun 3, '09
Ugh. Normally, I'm all for supporting the arts, but...tough times. Priorities. See my comments about prisons; they're important, but our schools and human services need the funding more.
Jun 3, '09
This is identical to the Portland stadium debate. Can we at least agree that the hacks use a whole different calculus?
It'll be rehashed in less than a month when Sam gets recalled, and we hear all the "Portland has to have one" logic.
Jun 3, '09
Dude, did you even SEE Coraline? That was an amazing film. In 3-D, no less!
Perhaps our kids can go live in weird houses with awesome circus performers in their extra days off school thanks to budget cuts.
Maybe we can have a Circus Performer Tax Credit.
Jun 3, '09
It was painful to watch the Democrats vote for this crazy measure in committee yesterday, while the Republicans were wise enough to say no. The Governor wants it, so everyone in the Legislature fell in line...where is the separation of powers?
Jun 3, '09
You are completely off base on this. As you note, the legislature would claw back direct funding of the Film and Video Office, as they did with the Oregon Cultural Trust endowment, in lieu of managing a proper reserve fund.
Without those subsidies which many other states provide, films would not be made here.
A study by the Moore School of Business found that $1.00 invested by the state in film production subsidy produced $1.30 in direct income (which is taxed) or $3.68 in local supplier sales. So the $.11 cost of the tax credit becomes $.19 or $3.57, with a payback immediately, not over years. In New York subsidies pay back twice the investment. That is why states have these programs, it is a good investment that pays back in a way that can be and is measured. Cut it off for 2 years and you have destroyed an industry.
I know many of the people who are directly employed as local film crew. They are working poor. As itinerant workers, they are not eligible for unemployment. I don't know one with health care. But some have used their crew experience to build their own film businesses that hire employees.
Oregon would be a grim state if 100% of the budget was dedicated to schools, prisons, social services and road building.
"Movie moguls" pure is Rove-ian rhetoric, thanks Frank Luntz. Most films loose millions. Notably, Oregon made films. For instance, Body of Evidence lost over $18 million (1993 dollars) for its maker "moguls", but the Oregon crews were paid.
Dismissing a study which does not support your thesis as "telling them what they wanted to hear" is what I would expect to hear from uneducated critics who believe "government can do no right".
The AP article is filled with hard data supporting subsidies and opinions without data opposing them which do not apply to Oregon's tax credit form of funding.
Frankly, I expect more from Blue Oregon.
Jun 3, '09
Bob Wilcox:
The study you cite gets its information from the film producers themselves and the state's film commission. I would have to take these numbers with a healthy pinch of sale. Do you think they might fudge the numbers just a little in order to make the case for the subsidies that directly benefit them?
On the subject of subsidies in general, I just finished The great American jobs scam : corporate tax dodging and the myth of job creation by Greg LeRoy. It's a quick read and pretty devastating to the idea that subsidies spur economic development.
On the subject of subsidies for stadiums, convention centers and convention center hotels, google Heywood Sanders. He's an economist who has done a lot of research into these subsidies and his research is pretty unequivocal that they provide no benefits to the community.
2:38 p.m.
Jun 3, '09
Chuck,
It seems to me that your argument is that the state would capture as taxes 100% of the revenue that comes in as "donations" to the fund, plus the 11% increment of nominally foregone revenue.
Forgive me for being skeptical about that, but I am.
That view assumes that the individuals and corporations in question simply figure out their tax liability, and then pay part of that into this fund, a sort of self-directed dedicated purpose taxation, reducing the liability by that much, plus the 11% increment on the "donated" amount.
It also assumes that absent donation, the liability would remain fixed.
However, I would guess that in fact some of that money would either be put into tax-free investments or used in ways that generated at least tax deductions, if not other forms of credits.
If such maneuvers were less than or equal to the 11% increment, the general fund would still net even or ahead. But if they were more than the 11%, the general fund would net less in total.
So this kind of credit (and I assume there are others) is at least partly a sort of backhanded tax compliance measure.
It could arguably make a kind of sense if the credited purpose is sufficiently important or valuable.
Rob Wilcox makes a kind of "valuable enough" argument based on return on investment that is not unlike the arguments in favor of the hospital/provider tax vis a vis leveraging federal money to pay for kids' health coverage & the OHP, or other kinds of common progressive arguments about net gains of social investments. I have no idea how good the study he cites is, but the kind of reasoning is not uncommon on the left & in the center.
The tricky bit comes in at the "important enough" point, because the costs here aren't just financial. They are also political and an in a way in political morality.
Such credits reduce the transparency of the taxation and budgeting process. They give some people in effect inequitable ability to direct expenditure of their taxes to preferred purposes as an incentive for compliance, and to protect those purposes from budget cuts, increasing the burden of cuts elsewhere.
To the extent that money is fungible and the purpose is important enough that the state would have funded it anyway, the inequity would disappear, though the transparency / opacity problem would remain.
But if the purpose isn't important enough, relative to others, that the state would spend the money on it anyway, this kind of credit gives the purpose of the dedicated fund extra insulation from budget cutting pressures, in an opaque way.
Although I and maybe thousands or tens or hundreds of thousands of my fellow citizens would prefer to fund other priorities with that $7.5 million, or even $6 million of it, we can't ensure that. E.g. say half the population of the state lives in the TriMet service are. $3 million could make a dent in the $23 million service cuts voted by the TriMet Board last week, or the next round that Fred Hansen virtually promised in December.
But wealthy interests who would prefer to fund movie-making subsidies over other uses among whtich the taxes they pay be divided, if they went straight to the general fund, can insure their preference for movie subsidies and protect the funding of that purpose.
To me the opacity and inequity are where the main objections lie.
<hr/>To go a bit off topic...
It does raise an interesting question about whether this kind of credit could be a tool to address school funding inequities, however. As you know pure property tax based funding of schools produces geographical inequities that have led to the shifting of much school funding to the state level for mitigation. But even so public schools in wealthy neighborhoods or cities are able to maintain advantage through private foundations in support of them.
Suppose the state were to create a kind of tax credit for donations to school foundations, or a fund for school foundations, that was restricted to schools in low income areas or cities? Would that purpose be important enough for justify the protection from cuts and the loss of transparency in taxation and budgeting?
Jun 18, '09
The Facts: The film and television industry is a bright spot for Oregon's economy. Millions of dollars in new production are creating family wage jobs, and Oregon businesses are profiting from the sale of their products and services to companies shooting in our state. According to a recent ECONorthwest report, "out-of-state" production was up 115% from 2005 to 2007. An increase of $2.5 million in the Oregon Production Investment Fund will bring in at least $60 million to the Oregon economy in 2009, as compared with $43 million without the expanded OPIF. Passage of Senate Bill 621 will mean "shutter ready" jobs for our casts and crews - and millions in economic activity for the people and businesses of Oregon. Key Findings • From 2002 to 2007, employment increased by 21% in Oregon’s film and television industry. • The average annual wage for full time film and television professionals is $53,118 - 34% higher than the 2007 statewide average. • Every $1 million in income generated in the film and television industry translates into $1.12 million in income for workers and business owners in Oregon. • ECONorthwest estimates $123,260 in tax revenue for every million dollars spent in Oregon. In the 2007-2009 biennium, this translates to $11,353,217. • Since the beginning of the OPIF program, the average Oregon budget of “out-of-state” projects has grown from $2.1 million to over $8 million. In addition, almost all of the participating projects have spent millions of dollars on Oregon resident health and pension benefits.
Economic Impact and ROI for the Oregon Production Investment Fund (OPIF) • Gross cost of tax credits for the 2007/2008 and 2008/2009 OPIF Incentive: $10,000,000 • Direct economic impact of productions that received incentives: $92,107,885 • Overall economic impact of productions that received incentives: $180,531,454 • ROI for direct economic impact: 9.2:1 • ROI for overall economic impact: 18:1
Folks this is really a no brainer. Urge your representatives to support SB621 to the benefit of our great state.
Stan Roach President Film oregon Alliance
Jun 18, '09
I disagree strongly with your premise. I appreciate the work you do as a watchdog organization but you are simply wrong on this one. The Econorthwest report that you so out of hand dismiss as an "expensive consultant report telling us what we want to hear", was authored by no less an authority then Joe Cartright who is widely regarded as an expert on the Oregon economy. If you had read the report you would have seen that our states film economy is more than 50% generated by indigenous producers. That being the case Oregon still can use the help. Portland's economy has some of the highest unemployment in the nation. The film industry incentive will help keep local film operations that need no incentive a shot in the arm in this difficult environment as well as helping them for years to come. The film business relies on infrastructure the same way other industry's do. That infrastructure gets built stronger each time a Movie or TV show comes to the state. We grow human capital through the side by side mentoring of our LA based colleagues as well as build the equipment base. We all benefit from the terrific amounts of spending on lodging, supplies, restaurants and merchants of all stripes that come with this work. When they leave we are still clean (little pollution) and the better for it. I'd put Oregon's modest incentive programs up against any state government effort to build an economic base you can think of short of the University system. I think you may be over reacting due to some efforts to build bio fuel of high tech business that did not work as well. In our case incentives are only offered after the project is completed. The oregonians who's pay checks have been generated by the help pay back what the state offered in increased income taxes. Dollar for dollar compare it to any economic development effort.
I urge your readers to read the study and decide for themselves. As a tax payer and a film worker I think this one works! D. A. Cress
Jun 18, '09
I am a Portland based Camera Operator who makes a significant portion of my annual income working on productions (films, commercials) that come to Oregon from out of state. For example, I logged 61 days last year working on TWILIGHT. This year someone in Canada got my job because the decided not to shoot again in Oregon...better incentives elsewhere.
Film jobs are real family wage jobs. As a freelancer I don't have a benefits package, a 401k, or sick days coming from anywhere...I pay for all of that out of pocket. And I am happy to..I love what I do. But I rely on productions coming to Portland to create the demand for my skill set.
Someone in another post mentioned that SB621 is the same deal as the stadium proposal...it is not. The film industry does not require the state to fund large capital investments-that generally go WAY over budget and end up costing the tax payers a fortune. On the contrary, out of state production companys come to Oregon...employ a lot of Oregonians (who pay taxes that go into the state coffers), spend a lot of money on local business (who pay taxes that go into the state coffers) and they don't get any "incentive" or "rebate" until after their money is spent. The money they receive wouldn't be there in the first place if they didn't come to town....
...this is like a car dealer offering you $1000 back if you come buy a car at their specific dealership. Oregon is that dealership, and if we don't help support our local film industry-by supporting SB621 those out of town productions will go to Washington, Arizona, or Canada...along with all the money they spend and our jobs.
Also, at a time when the economy IS so slow, many productions are looking around for the best place to shoot their next project...lets bring that money, and those jobs to Oregon...let's help generate revenue for the state to help deal with our schools, our health care, our roads. Film jobs are GOOD FOR OREGON.
I encourage everyone reading this to do some of their own research and find out for themselves why they should support this bill.
Sincerely,
Jeff Feller
Jun 18, '09
text here
Jun 18, '09
So here's my take as the local film crew person who is continually cut out of work because the production companies bring in out of state workers, padding their bottom line with their housing and per diem costs and not leaving any of that per diem here because we have no sales tax on the goods they are spending their salaries on while they are here. I support the incentives, but unlike other states, they do not insure a certain percentage of local hires and if I don't work, the state makes no money off of me and my skills become diminished. And though I would love to see the indigenous film industry thrive and grow, it is not capable now of providing well paying jobs or even half the time, any kind of pay besides a free meal. And like Twilight, there are no guarantees that once they deplete our incentive fund, they will return here to film again. Currently I have been in contact with a director who wants to film a book by a local author, based almost totally in Portland and yet as of now, will only film about a week of exteriors here and film the rest in Memphis, as the incentives are better. The good photo ops are not enough to pass this bill. It has to be better than merely providing justification for the Film and Video Office's existence (an office that gladly posts on its website "Our borders are open, feel free to bring your own crew...." - boy does that warm the cockles of my heart and terrorize my growing list of creditor..), supporting the hotel and restaurant business, and telling me that I should abandon my career as film wardrobe person that I have carefully honed for more than 20 years and turn my house into a bed and breakfast for out of state crew persons. And I really do mean that it's about time to seriously consider a sales tax...I mean get over it already!!!!
Jun 18, '09
I am a Portland native and have owned a casting company here for the past 10 years. Since the first film incentives were put into place in 2005, my company's receipts have quadrupled. I have expanded my offices, purchased new equipment and hired additional staff.
In this economy, the only thing keeping us going are the productions that come to Oregon thanks to our film incentives. It is very shortsighted to not want to support the ONE industry that is booming and bringing family-wage jobs and tourism dollars to our state.
My company has hired over 1400 man days of extras and actors on "Leverage" in the past two months; over 150 extras per episode. For many who are unemployed, this is making the difference between paying their rents and getting evicted from their apartments.
Moreover, the actors and crew are earning union wages with health and pension benefits.
"Crowley", the CBS Film that shot here starring Harrison Ford, has generated over $400K in Oregon state income tax from its employees. "Leverage" has generated nearly $250K from its employees since April...and the series shoots here through mid-September.
This is NOT including vendors and suppliers like my company, nor money spent at hotels, restaurants, rental car companies, payroll companies, hardware stores, antique shops, etc. Only employees.
This program pays for itself and more.
Jun 18, '09
Movie moguls have nothing to do with why many of us in the film community need this bill to pass. It means jobs for us working stiffs. Jobs that will allow us to pay taxes and have money to spend in our communities. We are competing with other countries like Canada for jobs. The Canadian government pays these studios to bring their jobs to their countries. If we play tough, we loose, better to give tax breaks for work we get (they have to prove they hired us BEFORE THEY GET THE TAX BREAK! ) THAN TO GET NO WORK AT ALL. Where's the sense in that? If we don't give them a tax break, then they will go somewhere else, just like corporations do, or football teams, all the same.
Jun 19, '09
Mr. Sheketoff, I have to say that I think your characterization of the Oregon Production Investment Fund is flawed from the start. You characterize the program as a give-away to "movie moguls" and "wealthy donors," and never take into the account the revenue out-of-state production generates every year, and, MOST importantly, the jobs this industry provides to average Oregonians. That's right, average Oregonians - not just actors like myself, camera operators or casting agents, but the employees of car rental companies, cell phone vendors, hardware stores, restaurants, hotels, and any number of businesses that benefit from the industry being here.
It's been a common practice over the past many years to offer tax incentives to the high tech, auto, and energy industries in the hopes that they will relocate their business to Oregon communities, and provide jobs for our citizens. The film industry is a multi-billion dollar per year industry; why, exactly, is it such a bad idea to use the same tactics to woo that industry to our state? It's obviously been working - employment in this industry has gone up by 21% since the OPIF was enacted. Is it such a bad thing to continue to build that employment rate?
I can see that other posters have already quoted the numbers, so I won't re-hash them; in closing, though, please allow me to quote just a couple more:
Oregon's unemployment rate is 12.4%.
An average episode of the TV series Leverage, currently shooting in Portland, hires at least 100 extras - many of whom are unemployed at the time of their hiring.
Those are real jobs that would not be here if it wasn't for the OPIF. More jobs come with an increase to the OPIF. It's simply a question of where we put our priorities - I think it's wise to invest in jobs for the people who live here, don't you?
Jun 19, '09
The fear-based language used in this article is regrettable. This is not Hollywood shaking down the local school system for its lunch money. This is not Harrison Ford coming to town to shut down the music program at your child's elementary school. The roads will not crumble. Libraries will continue to operate.
This bill is based 100% around job creation, so it should be compared to similar bills. Not temporary jobs, as it was oddly worded here, but good union jobs. Rental houses stay open year round. Local commercial houses have full time staff. The show Leverage is employing people long term, with the possibility of another season just down the road. These are locals, many with families who are supported exclusively with income from "temporary" film jobs, who pay property and income taxes.
The unemployment rate in Oregon, as stated above, is 12.4%. To attack an industry that has shown itself to be one of the few self-sustainable growth industries in the state is a critical mistake. I know first hand how much money is turned back into the local economy. Tens of thousands of dollars to the tourism industry and millions of dollars in Oregon citizen payroll (which, again, is heavily taxed). The big Hollywood moguls and donors who come into the state? They also pay state income taxes. Name actors and wealthy producers who are paid as loanout corporations as opposed to individuals have to register with the Oregon Secretary of State before their payroll can be processed.
How are these jobs any more temporary than elected state officials? Than campaign directors? Than appointed heads of local non-profits?
To maliciously target a bill that has a major impact on the families of hundreds of working Oregonians on the ugly accusation that it is somehow robbing our children and our police officers is wrong. This bill MUST pass before these employees are forced to move out of state and look elsewhere for work. Please keep these jobs in Oregon. We need it.
I urge you all to take note of two links. First, an article from the Oregonian with a slant on the job creation capabilities of this bill:
http://www.oregonlive.com/movies/index.ssf/2009/06/leverage_brings_lights_cameras.html
Second, the Oregon Media Production Guide. Take a moment to look through the list of small businesses, small business owners, and skilled Oregon men and women who rely on the passage of 621 to survive.
http://www.sourceoregon.com/directory
I appreciate your passion for the process, but this is clearly not an either/or situation.
Jun 19, '09
The OPIF puts money directly into the Oregon economy by attracting companies that create jobs for local workers, and spend money in our stores. No money goes out of the OPIF until AFTER Oregon has reaped the bennefits.
I am an actor. More productions coming to Oregon means more jobs in Oregon.
Jun 19, '09
I am an OREGON film worker for over twenty years. SB 621 supports OREGON workers, vendors, hotels, and even my mortgage and car payments to a local credit union! It BUILDS the type of creative industry that is the future of the American economy.
Why would a Republican be anti-business in Oregon?
Because its show business? Gov. Kulongoski supports this legislation and I stand with TED!
Jun 19, '09
I too am in the entertainment industry as an actress and acting coach for over 20 years.
ALL the comments posted to this point I agree with. SB 621 is like a blood transfusion to Oregon. Keep her life line going! ITS WORKING!
Jun 19, '09
I relocated to Oregon two years ago from San Francisco. I worked there for nearly 10 years with one of the leading post-production companies in the industry, until the day it closed its doors for good.
When I initially arrived I thought I had a solid position lined up with a major animation studio, but had to shift my strategy when the position evaporated. Since then I've established my own business and have been able to take on work for Nike, Oregon Lottery and other local clients.
But my long-term goal is to provide post-production services for film and television productions that choose to shoot here in Oregon. Without this kind of incentive program I will have to compete for limited opportunities generated locally, or chase down productions made out-of-state.
I have two children under the age of 5, so I am clearly interested in the amount of financing to be directed for our schools. However an out-of-work father is a detriment to children. I know this legislation will continue to foster the growth of our industry here in Oregon, and much like tourism will draw in more money than what the state puts in. And if moviemaking were such a gold mine to Hollywood producers there would be productions shooting here year-round. But that is not the case, is it?
Jun 19, '09
Mr. Sheketoff,
Having been a part of this Industry for over 20 years, I can only echo what some of my co-workers and friends have already said here about the flawed logic in your objection to funding the OPIF. The real figures of the positive impact to Oregon’s economy have been stated already, so I will not rehash them, but have to ask if you actually read the “Economic Impact Analysis of the Oregon Film and Video Industry in 2007” before you wrote it off as hype?
I would also like to correct part of the excellent response by Rob Wilcox. While many of us are freelance workers, our paychecks go through payroll service companies that DO withhold both State & Federal unemployment taxes and all other taxes any employer/employee would pay. We do not get any personal tax breaks.
I have earned a living wage working with people I love in an industry that is hardly “glamorous”. Workdays are a minimum of 10 1/2 hrs. It is physically and mentally demanding work and I can hear my co-workers laughing at the 10 1/2 hr. figure. My days are rarely under 16 hours, at least 3 of which are unpaid prep hours as is true of many departments. We are out in the elements regardless of weather and often have to travel long distances to and from location. If you do not have the highest work ethic, you are weeded out.
As an Oregon resident for over 50 years, my employment in this industry enabled me to buy a home, put my daughters through college and purchase my own health insurance. I have watched my co-workers do the same. We are not a bunch of wealthy “Hollywood” types. Hollywood would love to have their business back. We are people who work long days in a GREEN industry. We are “temporary” only in the context that we move from project to project.
OPIF is vital to the further growth of this valuable industry. I hope you will take another look at the facts that have been presented here by those of us who depend on this work to support our families. This does not compare to soccer stadiums, hotels, it does not effect schools or libraries. I also expect more from Blue Oregon than this.
Jun 19, '09
There's a bigger issue here that members of our govt are clearly not taking into serious consideration; This incentive has but one core benefit and purpose - to creates jobs. We must place our entire focus on the jobs topic or the incentive issue will never be argued appropriately or resolved with true consideration of the benefits to Oregonians. Simply put, if earnest focus were placed on attracting more production work to Oregon, our state could be a major competitor in this industry, and that translates into money in our resident's pockets, which builds greater economic stability.
The term 'incentive", by definition, means a positive motivational influence or the means of increasing output, but the current approach is "What does the state get back for what it puts in?", but we need to shift our perspective to "What does it cost vs how does it benefits the residents of our state over time?" Politicians are not giving great consideration to residents with the current perspective. If this were an incentive that promoted growth for companies like for Nike, Intel or HP - industries better understood with feet firmly planted in Oregon, we can assume there would be little if no struggle for this fund to survive and grow.
There is a second misstep in the perspective presented here and that's referring to the incentive recipients as "Hollywood Moguls". This idea suggests that rich film executives come to Oregon and take our money, but give nothing in return. This seems a martyr's perspective with little understanding of the benefit this fund gives to our residents. It suggests we're somehow being taken advantage of and stripped of our school and public funds, when the opposite is true - Oregonians greatly benefit from the outside money being spent in our state - how can we not? But if you aren't convinced, please read the reports, because we're forgetting that the majority of money spent on physical production is employing real people. We must acknowledge that this an extremely important benefit, especially now. We must also consider the alternative - If the incentive goes away, and or decreases, there are literally hundreds, if not thousands, of households in Oregon greatly impacted. We have to ask ourselves, how is this good for our state and residents? We must also ignore the skewed perspective of Hollywood that's been suggested here, and keep to the topic of jobs.
To emphasize, let's look at a single dollar paid to Joe the production assistant from an out-of-town production. First, Joe will first pay taxes on that dollar and potentially spend the rest on his mortgage, property taxes, food, automotive, his children, etc. And if he's able, he'll put some money away and grow it for future spending in OR. When the production wraps, the filmmakers receive back a percentage of the dollar they gave Joe and go home happy with the experience, money saved and they either refer others to come here to work, or return themselves with other productions. Worst case, we never hear from them again, but Joe remains here and further develops his skill set by participating in more productions that pay his bills and support a growing industry. In the long term, Joe's family lives on these funds and the incentive drives more and more productions to OR, because of the professional crews here like Joe, the talented cast, amazing locations and of course the refunds offered.
Joe is not a Mogul; he's a family man and so are the other people who make a living in Oregon on film and video projects. And we must consider all the other expenses the film incurs in OR that the fund only partially refunds, such as transportation, hotels, dining and general living. Over time, Joe and his family do well for themselves here, as does the industry. This being said, shouldn't we find more ways to support growth and generate jobs in Oregon for people like Joe? Isn't it the responsibility of our government to support and incentivise the advancement of industries that benefit our economy and create work? Clearly, the emphasis on jobs has been misplaced.
Now let's imagine the upside of supporting the expansion of the film incentive fund that would draw more and larger productions here, effectively dumping millions upon millions of dollars into our economy. Even if it cost the state money, which it does not when all is said and done, we're better off financially, better positioned for growth, better employed for family stability and we create a better place for people to live.
Although we are giving the "Moguls" 16% return on employment costs, let's not forget the other 84% spent on employment that stays here. And let's change our perspective - Let's rethink the incentive as not to the benefit of the "Moguls", but an incentive for Oregonians to live, work and thrive here. Now that's good for Oregon and we must support that!
Jun 19, '09
Wake up people!
My comments remain the same, my outlook is always posiitive and in the year 2009 when I expected to be sitting on the couch I am rolling with film work. Rolling yes! As owner of Sparkztranzport a private specialized trucking company for the film business, built by the film business and supported and maintained proud by the Oregon film business!!!
I am now working on doubling my companies size. Why? Because film crews love this place and I hear it everyday. I have not driven my truck for almost a year, everyone else drives it and I will create more positions as I double down within the next month.
Meanwhile my other function MPS/HD Production an early adopter in HD continues to grow here in Lake Oswego bringing in money from companies like PPG, Proctor and Gamble, Grass Valley, Thomson SA, Fujinon, Harris, and a list of other advertisers and content users.
I have read all the nay sayers. Makes for good drama. Do they make over 100k a year with films? Many of us can and we will pay our taxes, buy homes and continue to spend in Oregon at local stores and services.
My plan is to keep building and turning profit back into the states infrastucture for film support. The way I see it... its like having rich, really rich tourists come here drop a lot of money and leave.
Becoming more green hiring more people locally and paying more money, do the people of Oregon really want to turn thier backs on this. Even if it were minimum wage (AND ITS NOT) its a knock off the 12% unemployement.
As for my other film working friends they do this because they love thier work. Many artists others just super strong, built tough get it done personalities.
No cry babies here, we will continue to grow. All of us have seen worse times than this. Why are so many other states setting up programs like Oregon? Can they all be wrong? They see the same dollar signs you should.
Oregon has a great reputation and it too continues to grow!
Nuff said push this bill through. We all have work to do.
Sparky Sparkztranzport MPS/HD
Jun 19, '09
I couldn't disagree more with Mr. Sheketoff's analysis of pending OPIF legislation. Here's why. Oregon cannot afford not to have incentives to bring well-paying, green production jobs to the state. Yesterday I worked as an extra on "Leverage," not my normal job of production still photographer in the industry, but still a paycheck, and on the set I saw that at least 80% of the production crew were doing jobs that would not be available had the OPIF not lured "Leverage" to Oregon (with the help, by the way, of Governor Kulongoski, who made personal phone calls to help bring the show here). Look, this is a simple equation and the result is for the overall good of Oregon's economy. The money comes back. It is that easy to understand. The money we make working on these productions we spend at Fred Meyer, the Farmer's Market, downtown businesses, Powell's bookstores, Pro Photo Supply, locally-owned businesses, and the list goes on and on. With all due respect to Mr. Sheketoff's acumen, he's got this one wrong. The legislature needs to pass SB 621 now and more than ever in these challenging economic times.
Jun 19, '09
I'm rather put aback by the quaint attitude here. I'm originally from Chicago. That city bent over backwards to retain and draw in the film and television industry because of the huge revenue brought to the city.
Many states compete for these dollars. Portland is a natural shooting location. This is not temporary work by any means. One project after another can begin and end here employing thousands. Not just actors and technicians, but also caterers, teamsters, retail clothing stores for wardrobe, direct funds to the city for location access, and the list goes on and on.
It's time to view Portland as a major player on the national stage and this industry will give us a huge leg up towards rewarding our self confidence and self determination.
Jun 19, '09
Thank you all for the discussion. I feel as though everything I would have said has been said and more eloquently than I would have.
So, I, too, would simply like to throw my weight behind SB621. The growth of the film industry in Portland (and Oregon) has been positive for everyone. It's continue growth will be an enormous stimulus to the entire economy in Portland - let alone the direct impact it has on the workers in the industry (the overwhelming majority of whom are in no way moguls or, in many cases, even middle class).
Jun 20, '09
Please do not dismiss SB 621. I am another Oregon film worker who has been supporting my family for 20 years in this business. In my department (Transportation) alone I oversee many hundreds of thousands of dollars spent locally by individual productions.
This money does not just linger in Portland. As production companies learn about our beaches, mountains and high desert, we find ourselves traveling to smaller communities where money is spent with local vendors.
I agree with Mr. Cress that if we are able to keep these shows coming, our crew base and infrastructure will develop to the point that these shows will not feel the need to bring in crew from elsewhere. In any case, those that do come in spend a LOT of their wage & per diem money here. Not surprisingly, many buy property here.
SB 621 is simply a logical improvement to an already effective means of drawing jobs and money to Oregon.
Jun 20, '09
As reference, Oklahoma just passed an incentive with a 35% rebate plus a 12% rural development rebate for a total of 45%. One OR film has already gone to OK and several have gone to WA this summer because of better incentives. We too are now considering shooting our feature out of state because Oregon is not competitive enough. But we can be sure Oklahoma will attract million of dollars to their state and create hundreds of jobs while growing an industry from their new incentive. Even more attractive - Oklahoma's base line budget requirement is only $75k, while ours is $750k. This alone prohibits most small films, derived from outside or within the state, from embracing our fund. So we now find ourselves fighting to keep alive the small fund we have, and we're making it difficult to nurture the developing OR film business from within with these restrictions.
Oregon sits directly above California, yet our govt's inability to embrace this massive neighboring industry and support its growth here is of great concern and very short sighted. How is voting against this incentive good for our state, our residents and our troubled economy?
Jun 22, '09
I am earnestly shocked that this bill is even being disputed! The number of jobs created and money circulated IN OREGON from these incentives far out weigh the incentives given. As a WORKING actress IN PORTLAND I rely on these productions that seek out our beautiful state!!! This isn't a tax break for Hollywood - this is a sure fire way to sustain and create more living-wage jobs for OREGONIANS.
Jun 22, '09
I'm yet another "working stiff" who's urging everyone to throw their weight behind SB621. Two percent of stage actors, and five to six percent of film actors dont need "day jobs". Personally I do not know anyone in either of those catagories. In Oregon there arent any "day jobs" to be had,( mine was one of over two hundred resumes received for a single part time server/bartender position in a restaurant in my neighborhood).My question to all who claim that SB621 is a "tax breaks for the rich" bill is: Would you rather I remain on unemployment (as I have been since being laid off last October)? OR would you rather have me working for a decent wage? "Tax breaks for the rich" ??? Do you have any idea what/who you are speaking of? I hold an BFA from one of the top schools in the country (Cornish College) for my feild (Acting), have been onstage for over forty years, and STILL have never made more than $20,000 in a year in my life...EVER. Oregon is 53rd on the list for N.E.A. grant money. Lets do something to support those among us who dare to dream, and SUPPORT SB 621. Thank You Andrew Hickman
Jun 25, '09
Just last Friday, Oregon lost another big TV series ("Life Unexpected" by CBS for the CW Channel) to Vancouver, BC.
Why?
Because SB621 had not yet passed, so producers pulled the plug and went to Vancouver BC.
I had already met with the producer and director of this series and, by all indications, they were set to hire me, if the production were to shoot here.
Now someone in Canada has my job.
Not to mention the hundreds of actors, crew and vendors, and thousands of background performers whom the series also would have hired.
Nor the restaurants, hotels, caterers, rental car companies, legal services, payroll companies and other businesses that would have benefited.
Nor the tourism dollars it would have generated.
Nor the blooming, green, creative industry of the future for our state that it would have supported.
Get with the program, people! Film is hiring! Who else is doing that in THIS economy???