Please, Rep. Barnhart, don't let this jobs bill fade to black.

By Blaine Palmer of Portland, Oregon. Blaine is a member of the Screen Actors Guild, AFL-CIO.

Open on: a newspaper spinning toward the camera. Voice Over: As the Oregonian reported yesterday, the growth in Oregon's film scene depends on bringing in investment from Hollywood (like Willie Sutton said, that's where the money is).

Cut to: crowds of people lining up for work.

The very successful Oregon Production Investment Fund (OPIF) has helped attract that Hollywood money to the Beaver state. A report from the Governor's Office of Film & Television shows that out-of-state spending in Oregon increased by 117% from 2005 to 2007, representing over $41.3M in direct spending for the state. With unemployment at over 12% in the Portland area who would want to stand in the way of a proven program to create jobs?

Cut to: Representative Phil Barnhart.

SB 621, an increase to the OPIF that would help bring more productions to Oregon passed the Oregon Senate on June 9. Since stories about bi-partisanship are big box office these days, I'll mention that it picked up four Republican votes. It was immediately sent over to the House and referred to the Revenue Committee that Representative Barnhart chairs.

Tick. Tick. Tick. Since the 9th of June, nothing has happened and Representative Barnhart has still not scheduled a hearing. Why would a Democratic representative stand in the way of a bill that would create family-wage jobs (many of them union jobs) in the midst of a recession? Ask Representative Barnhart.

More production jobs are waiting in the wings. Producers of additional films and a CBS television series are considering bringing their work here, but waiting to see if Oregon is willing to make the commitment to film incentives. They have the option of taking their productions to British Columbia which offers an unlimited incentive. The economic analysis report shows that besides creating jobs, the tax revenue generated by OPIF exceeds the amount given as an incentive. Shouldn't that make this a no-brainer? Ask Representative Barnhart.

If you read the reports and are still not convinced, just look around: film production is putting people to work, and contrary to our image of the movie business, most of the jobs are blue collar jobs: drivers, caterers, lighting technicians. I have worked in the film industry in Oregon for the last eleven years and have never seen so many of my colleagues getting work.

Why shouldn't we invest in a proven method of job creation? This bill should not be killed behind closed doors. The only way it can get a fair hearing is if you Ask Representative Barnhart.

The clock is ticking. The Revenue Committee needs to schedule on hearing on SB621, and fast. The family-wage jobs of Oregonians are hanging in the balance.

Fade Out?

Comments

  • Lana Veenker (unverified)
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    I totally agree. I have personally met with a producer and director who want to bring another TV series here in the fall, and they're just waiting to see what our Legislature does with SB621.

    Since "Leverage" wraps in September and we currently have no more incentive funds available through the end of the year, if this bill doesn't pass, this could mean no more film or TV work for my company until 2010.

    Vancouver BC is making a FORTUNE off the two "Twilight" sequels that we lost to Canada because their programs are more competitive than ours. Not only in terms of production dollars, but tourism dollars. This was a huge loss to our economy. They would have spent and generated MILLIONS in Oregon.

    Ask your legislators: Why not support a BLOOMING, green industry that is actually HIRING during a time of over 12% unemployment???

  • Kurt Chapman (unverified)
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    Anyone producing a show that needs the metropolitan look of the Northwest can use Seattle, Tacoma, Portland or Vancouver, BC. right now for a variety of reasons, BC wins out hands down. If this bill helps steer entertainment dollars to our state what could be wrong?

  • Blaine Palmer (unverified)
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    Anyone producing a show that needs the metropolitan look of the Northwest

    Kurt -- and not just that. I got an extra call last month for a shot meant to be in a Nebraska parking lot. Oregon can look like a lot of different places.

  • Frank DiMarco (unverified)
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    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.

    Frank DiMarco DiMarco Images P.O. Box 14184 Portland OR 97293-0184 U.S.A. Tel. 503.236.3736 Cell. 503.358.8119 Email: [email protected] Web: http://www.dimarcoimages.com ONLINE GALLERY: http://www.dimarcogallery.com Blog: http://blog.frankdimarco.com

  • (Show?)

    Given that Phil Barnhart isn't against jobs, I'm nearly certain there is another side to this story. Like - how much does this actually cost?

    I'm perfectly happy having the state "buy a job" that builds infrastructure. Once the bridge-builders are done, the fact that we have 30 years worth of bond payments to make is mitigated by the money the public saves in gas using that bridge.

    But getting into a bidding war over making movies sounds like yet another "starve the schools to build a stadium" type of deal. I'm not for it unless you can show there are significant positive externalities involved - positive externalities that are actually unique, real, and not pipe dreams made by the people getting the government largess.

    But I'm open to persuasion. Give me facts and studies. Persuade me.

  • Blaine Palmer (unverified)
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    Give me facts and studies. Persuade me.

    Steve Maurer -- an excellent question. From the two reports referenced above (http://ompa.org/events/news.htm and http://governor.oregon.gov/Gov/docs/SB621_Briefing.pdf

    For every million spent in Oregon by out-of-state productions, about $123,260 in state and local government revenues are generated. The Oregon Film and Video Office documents that productions that received the 10 million in incentives had a direct economic impact of $92, 107,885. Do the math: that $92 million brings back tax revenue of $11,353,218, more than a million dollars greater than the original tax credit. That’s tax revenue from the direct economic impact. Because of the multiplier effect of employees spending their extra income the tax revenue from the overall impact will be roughly twice the original state investment.

    The total incentive in SB 621 is 2.5 million per year.

  • LT (unverified)
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    "The total incentive in SB 621 is 2.5 million per year."

    Blaine, where do you want that money to come from? From some of the reserves that Ferrioli likes to call "slush funds"? From cuts to other programs?

    All tax expenditures (that's what it is, regardless of what you call it) must be paid for. Rep. Barnhart is doing an excellent job as chair. I'm guessing you may never have been in as stressful a position as chairs like Rep. Barnhart are in this year.

  • Blaine Palmer (unverified)
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    LT -- all tax expenditures must be paid for and a reasonable way to discuss the various merits of expenditures is to hold a hearing and/or have a floor debate.
    If Rep. Barnhart is opposed to this expenditure, why doesn't he hold a hearing and say so?

  • Scorcese (unverified)
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    Please help me, I'm confused. I thought Democrats were against tax cuts for the rich and out-of-state corporations.

  • Cafe Today (unverified)
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    Some people are a bit leery of approving another $2.5 million worth of tax credits that actually are worth 110% of that to any business that gives to the fund...

  • (Show?)

    Blaine, where do you want that money to come from?

    If Blaine's numbers are correct...

    Do the math: that $92 million brings back tax revenue of $11,353,218, more than a million dollars greater than the original tax credit.

    ...the the money doesn't need to come from anywhere - it's a revenue-positive program.

    I'm impressed that we're talking about actual tax revenues generated in this discussion. Too often, people muddy these discussions by noting the direct cost of a tax credit/deduction and then noting the overall economic benefit -- ignoring the actual cost to government budgets. Overall economic benefits are nice, but as long as there is a budgetary cost, we should examine what we're getting.

    But, if a program is actually revenue-positive, then there doesn't seem to be any budgetary argument against it.

  • Blaine Palmer (unverified)
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    Scorcese -- In an ideal world, everyone would come to Oregon to do business just because it's so cool. But like efforts to build our green jobs, providing measured incentives that build Oregon's economy and are ultimately revenue-neutral seem like a good investment.

    And if others disagree, why not hold a hearing to talk about it?

    BTW, loved The Departed.

  • Connie Crabtree (unverified)
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    For anyone who has questions about this bill, please read the post by Stan Roach on this link for the math on this: http://www.blueoregon.com/2009/06/robpetertopaypaul-the-sequel-paul-on-steroids.html

    Also, click on this link: http://mandatemedia.typepad.com/files/econw-orfilm-07.pdf

    This should be a no-brainer, I am just stunned that this bill didn't make it out of the revenue committee today. Shame on those who played "politics" on this.

  • (Show?)

    Blaine doesn't understand public finance return on investment. The state spends tax dollars on the subsidy and the amount of tax dollars estimated to return as a result of estimated economic activity is less than what we spent. Using Blaine's logic, he gives me $100, I then turn that into good investments and economic activity totaling $1,000, generating $50 in taxes to the state. He'd say "my $100 generated $1,000." Public finance return on investment says "my $100 tax dollars generated $50 tax dollars."

  • Blaine Palmer (unverified)
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    Chuck -- No, using my logic, I give you $50, generating economic activity totaling $10,000, generating $51 in taxes. Revenue-nuetral. Your earlier post suggested you dismissed the report without reading it carefully.

    Referring to the period when the state incentive was $5 million: "As shown on Table 13, when all of these effects are totaled, the analysis found that out-of-state production spending resulted in nearly $5.1 million in state and local government revenues in Oregon during 2007."

    The economic activity has value in and of itself, but the return on investment directly to the government justifies the expenditure.

  • rw (unverified)
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    Dear Lana: your post tells me what makes me sick about politics and business. It's streetwalker dynamics. So we stand on the corner in the pool of light and cluck, "C'mere boy-ooooo... I've got yer [fill in blank] right HERE!"...

    This sure ain't the Marriage thread....

  • (Show?)

    Chuck & Blaine --

    OK, so that's my point. At least we agree on the question -- ignoring the broader economic activity, did the tax credit cost the state budget money, or did it net positive revenues to the state budget?

    Now that we agree on the question, what's the actual answer?

    I find it very interesting that you're both touting the same ECO Northwest report for the answer. Guess I have some reading to do.

  • (Show?)

    Ahhhh, but first find me where ECONorthwest did a regression analysis or otherwise to show that the subsidy caused the economic activity. There are a number of factors in play as to why a company chooses to film in Oregon, making it wrong to give the tax credit-financed subsidy full credit for creating all the economic activity by out-of-state film production companies. They may have all taken advantage of the subsidy, that doesn't mean they all would not have chosen to come to Oregon without it. Even the Oregon Film and Video Office's website cites other reasons to come here. Are those unimportant? No. That's why the tax credit scheme can't get all the credit (excuse the pun) for the economic activity.

    Read the studies by the New England Public Policy Center of the Federal Reserve Bank of Boston at http://www.bos.frb.org/economic/neppc/memos/2009/weiner011609.pdf and http://www.bos.frb.org/economic/neppc/memos/2009/weiner040209.pdf.

    More importantly, as I noted in my post today, Film Tax Credit: "too good to be true" . . . but is, if the program is a good as Blaine and other proponents say it is, then they should be willing to let it compete for state dollars with the rest of the public services Oregon provides by taking it out of the tax credit world and making it a line item in the budget and subject to the Ways and Means prioritization process. But my guess is that Blaine and other proponents don't have the guts to put it head-to-head with education, public safety and health and other human services, no matter what their ECONorthwest study and anecdotes masquerading as data may say.

  • (Show?)

    Kari,

    Just read the 2009-11 Tax Expenditure Report. It notes

    Therefore, using the annual direct production spending figures quoted above ($31 million per $5 million annual OPIF expenditure), $2.5 million is returned to the State Treasury via the production spending that the annual $5 million incentive fund attracts into Oregon, making the net annual cost $2.5 million.
    .

    It does not pay for itself.

  • (Show?)

    Chuck S. sez:

    "There are a number of factors in play as to why a company chooses to film in Oregon, making it wrong to give the tax credit-financed subsidy full credit for creating all the economic activity by out-of-state film production companies."

    This reasoning is partly wrong IMO, at the level of individual productions. What it says is that in itself the incentive isn't enough to induce company choice to film in Oregon. Assuming that's correct, it means that the incentive isn't a sufficient condition or causal factor to cause the location of the activity here.

    But if it is a necessary condition, it deserves full credit, as do all other necessary conditions or causal factors. That may seem weird, but it is true.

    Have all the necessary conditions, you have the location of the activity here. At the level of a given production take a necessary condition away you don't. 100% or 0%.

    A regression analysis that attributes proportion of causality across the industry (actually I'm not sure how you would do such an analysis) doesn't translate down to that level.

    Where I think Chuck may have more of a point is to ask what is the marginal gain of productions that the incentive creates that would not have located here anyway.

    I.e. there are some productions for which it is not a necessary condition, so the tax revenue derived from them & associated activity would have been there anyway.

    The revenues generated by those productions in principle should not be attributed to the incentives, only the revenue generated by productions that would not otherwise have located here. However I am not sure if it is possible to distinguish those categories in practice.

    <hr/>

    To Steve Maurer's good question, I guess one sub-question I have is whether, given enough productions in Oregon, will that lead to the creation of production infrastructure and permanent production-supporting businesses and uniquely or highly skilled production supporting workers, that would have a virtuous cycle effect of attracting productions independently of the incentive?

    I think there is a case to be made for industrial policies of that sort, particularly relating to employment intensive industries, which is one reason I'm not a simple free-trader. I'm not sure where the incentives in this bill fit in that picture, or whether Oregon has a chance in competing to build up such infrastructure and skilled labor resources. The big biotech plans of 10 years ago didn't really work out because Oregon couldn't compete, to the point where the quasi-privatized, corporatized OHSU (disclosure, I am a student there) relocated subtantial biotech activities to Florida.

    Is Oregon competitive in those terms? Could it be, realistically?

  • Robert Blanche (unverified)
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    Chuck S. is ignoring the fact that production has risen since the inception of the incentive. He pays no attention to the fact that there was plenty of production through 1999, when it dried up thanks to producers running to B.C. Was it just a coincidence that it returned with the incentive? Why didn't they just shoot here anyway? I guess Mr. S wants to find out and lose what we have indisputably gained.

    What is that nonsense about only attempting to count what is returned to the state treasury?
    "The money's not at the building and Loan...You're thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's in Joe's house; that's right next to yours. And in the Kennedy house, and Mrs. Macklin's house, and a hundred others." [George Bailey, It's a Wonderful Life]

    Say no to Mr. Potter, folks.

    And what is it that is not understood about a production spending a bunch of money in supplies and services--and the tax dollars by those who are earning it--that would not be spent here at all, while Chuck is only counting "50 tax dollars for 100 spent"? Bean counters never really count all the beans, or the benefits, they are too narrow in their thinking. There is so much spending and taxation of wages that is not accounted for and never will be; all that is counted are receipts spent by production, not all that is spent by individuals, both permanent and temporary residents of Oregon, and not the taxes they pay for increased earnings. It's just not possible.

    If 621 dies, we will also lose indigenous production to states with incentives, this is a certainty, not a scare tactic. There are productions just waiting to see what happens before they make a move.

    Not to mention that because of recent production, we are rebuilding the skilled workforce and assets it takes to further attract production, that is a correct note from earlier posts.

    621 is really a no-brainer...or at least a "Don't let your good brain get in the way."

    RB

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