Looks like there is some good news for Iowa, whose “two for one” 50% production incentive was, briefly, the most generous incentive in the US. Sadly, the gravy train was short lived because the people in charge of running the Iowa film office had no idea what they were doing (and that’s being kind… if they did know, then they really are criminals). I covered the collapse of Iowa’s incentive HERE, and the lawsuits of angry filmmakers (ironically including some Canadian interests) upset with the state HERE.
So what is the good news? Apparently, it looks like they will owe less than feared to unfunded film projects that were trying to qualify for Iowa’s incentive. In fact, it’s a LOT less: instead of a maximum potential hit of $330.5 million (wow!), it’s now “around $200 million”:
The state’s potential revenue loss from tax credits owed moviemakers is shrinking, as investigators winnow a list of productions likely to survive enhanced scrutiny after scandal engulfed Iowa’s filmmaking incentive program.
The maximum amount of state-backed tax credits that could still be issued for film projects is around $200 million, new estimates from the Iowa’s attorney general’s office show. The state’s maximum theoretical liability was estimated to be about $330.5 million when the fledgling program crashed last year.
Sadly, Iowa still faces an unknown liability for various lawsuits over the botched program:
In addition, the state still could face lawsuits from moviemakers who say they lost money because of delays resulting from the state’s suspension of the film program or claim the state should make good on promises they perceive were made by fired Iowa Department of Economic Development workers, Thompson said.
The August 3 edition of the Des Moines Register did an excellent job giving a status update on the outstanding issues:
When Gov. Chet Culver suspended Iowa’s film incentives in September, 22 projects were in the process of completing filming and 158 projects worth $504.8 million in spending were registered to move forward.
Here’s the rough status of projects as of the end of last week:
- After an auditing process, the state recently approved two small, completed productions for tax credits, bringing to 24 the number completed. The total state tax-credit incentives issued since the program was overhauled is about $32 million.
- Fifty-nine projects once OK’d by the economic development office are no longer in the running for state tax credits, Thompson said. The state revoked registrations for the projects after filmmakers failed to respond to correspondence asking whether they still planned to move ahead.
- About 30 projects that were registered to move forward still don’t have contracts. Thompson said the state has notified those filmmakers that the state is ready to proceed with contracts. The maximum liability for tax credits for those is $55 million to $60 million, he said.
- About 45 projects have contracts to make films – and that’s where the brunt of the state’s liability still lies, to honor promises for extending tax credits. Eleven projects have been completed and have submitted forms seeking tax credits. The maximum estimated tax credits that could be issued is about $20 million, Thompson said. Another 20 to 25 of those could result in $120 million to $125 million maximum in tax credits issued.
Now, one might think that many in the state would feel some level of relief and a desire to put the whole matter behind them. And you would be wrong. On August 10, Iowa-based actor Gene L. Hamilton opined the following in the Des Moines Register:
Des Moines Register reporter Lee Rood is one of the few links we in the Iowa acting community have left. Her Aug. 3 article, “Liability for Film Credits Drops,” was most welcome and enlightening.
What a waste of jobs and permanent infrastructure when our present governor, Chet Culver, abruptly axed the Iowa film tax incentive program.
What a hardship for hundreds, perhaps thousands of Iowans, who benefited from movies being made here.
Who could blame the 59 movie producers for skedaddling out of Iowa, where agreements were broken by state officials, where an entire film program was killed because the state itself failed to man the film office sufficiently and then unfairly put the blame on the head of that film office, Tom Wheeler?
Although Thompson stated the Iowa film program’s three year suspension would be lifted next year, I can’t help but wonder how many, if any, of the moviemakers will want to risk returning to Iowa for fear of being burned yet again.
Let me just say that I am sympathetic to Hamilton, an Iowa resident who had the opportunity to act in at least one production that took advantage of the Iowa incentive (2010′s “The Crazies”). But in keeping some objectivity, given the very brief existence of the Iowa incentive, how is there a “permanent infrastructure” already, or one that is somehow dependent on the NON-permanent incentive? And is it really fair to say Culver “abruptly axed” the program? It seems rather prudent, given an unfunded liability (mismanaged or not) that could have cost the state $330 million for a single year. So who really bears the risk here? Iowa or filmmakers who have 44 other US jurisdictions to choose from?
