Correction: A previous version of this story indicated that California's lottery system has driven film production to other states; however, the film tax credit lottery ended in 2015.
An increasing number of films are being shot in Northeast Ohio, but local film industry advocates say the state needs to expand its tax credit program or risk losing future productions and the economic benefits that come with them.
“In the last year-and-a-half, we’ve lost well over a billion dollars of direct spend in Cleveland," says Ivan Schwarz, CEO of the Cleveland Film Commission. “These aren’t movies that have come here to scout, and we’ve put them down as ‘lost’ because they chose someplace else. These are people we’ve had relationships with that want to come here. And I think we’ve just lost another big one that really wanted to come here because our cap is low.”
Ohio's cap for a tax credit is $5 million per production. Overall, the state gives away a total of $20 million in credits each year to get filmmakers to shoot in Ohio.
Bills in the Statehouse would expand that to at least $75 million.
Greg Lawson is an analyst with The Buckeye Institute, a public policy think-tank based in Columbus. He says the industry should be funded by private money, not public.
“It’s almost like a sugar high because it creates very temporary boost, maybe, to the local economy at best. But most of the folks who come in and do these film aren’t usually from the state. And it goes away very quickly. ... If you look at things from groups like the non-partisan Tax Foundation, they rarely pay for themselves. We think that the way to prosperity is to have real big and fundamental tax reforms so that it’s competitive for everybody.”
But the Cleveland Film Commission believes expanding the credit will attract productions and a permanent base of crew members. Louise Rosner has produced dozens of films, including the first two “Hunger Games” movies and, most recently, “The Big Short.” She’s worked all over the country, but never in Ohio.
“Georgia was one of the first places to install a tax credit. So, over [the] years, a lot of crew from Los Angeles – because obviously, nothing gets made in California anymore – have migrated to Louisiana and migrated to Atlanta. So, you’re getting tip-top crew that have moved to Atlanta and then also trained other crew that were coming up. So that’s why their tax credit program works so well.
“You don’t make the decision solely based on one thing -- you make it based on several things -- but a large part of it is based on the tax credit. Otherwise, many more movies would be made in California.”
California has a lottery system for film tax credits, which is one reason productions began moving to places like Vancouver in the 1990s. Michigan, on the other hand, just wound down its tax credit program last summer after years of hosting movies such as "Transformers" and "Batman v. Superman." Rosner is blunt about what happened next.
"I think the tax credit left, and so did the films."
Director Joe Russo
grew up in Cleveland, and he’s directed several films here with his brother.
"We keep pushing to bring work here. We sat with Ivan while we were making ‘Captain America: Civil War’ and we were conspiring how to get soundstages built and (how to) get an incentive pushed through so we can bring all of 'Avengers
: Infinity War.’ That's two movies that are shooting for an incredible sum of money that would have been here for well over a year. And we just couldn't get it done in time.”
A new industry
Republican State Sen. Frank LaRose has seen a number of productions in his district in Northeast Ohio.
He says he supports bills which would expand the credit program.
“When we can help create a new industry in the state, and we can do so with a very clear [demonstrable] return on investment, then that makes sense. And we should continue to review it periodically to make sure that it continues to make sense.
"If we can get to the point that Ohio has a thriving film industry – never be as big as southern California, but it could be a legitimate industry that employs Ohioans -- if it gets to that point, it won’t need a tax credit anymore and you can start to phase that out.”
The Cleveland Film Commission’s Ivan Schwarz says expanding the tax credit now will make Ohio a player on par with Georgia and Louisiana.
“We have to decide either we want to be in this industry, and create jobs and have people move here by the thousands, or do we just want to dabble?”
As for the economic benefits, a recent Cleveland State University
study found that every dollar of tax credit generates $2 of local spending by film productions.
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