2017-06-15 / Top News

Movies Move On

Killing Florida Tax benefits for film companies means states like Georgia are now reaping the economic benefits from production we once enjoyed

For state leaders who tout jobs and the economy first, the fumble appears huge.

In the last 36 months, Florida's refusal to offer tax incentives to more than 50 makers of movies and television shows who first contacted officials aiming to bring their business here has cost the Sunshine State as much as $875 million. That includes 140,000 nights of potential lost lodging in hotels and motels, and the loss of a $2.3 billion boost to the state’s gross product.

Instead, they went to California, Louisiana or Georgia, says John Lux, executive director of Film Florida, a nonprofit trade organization. There, money paid out in tax incentives brings in significantly more in spending, officials say.

“Anytime a (Hollywood or New York) studio or producer called a local Florida film producer and said, ‘Hey, we’d like to bring this project to your area and we know our needs, budgets and time frame,’ we’d have to get to the financial conversation. We don’t offer incentives anymore. But they could go to Georgia or New Orleans and get incentives.”

So they did. The makers of “Guardians of the Galaxy 2,” for example, which grossed $818 million at the box office since its opening last month, looked at Florida but went to Georgia.

Portions of “Iron Man 3,” above, were shot in Florida, taking advantage of previous year’s tax incentives the state offered. “Guardians of the Galaxy 2,” left, opted out of Florida, to shoot in Georgia, which offers excellent incentives — up to 30 percent — that benefit film companies and the state. 
COURTESY PHOTOS Portions of “Iron Man 3,” above, were shot in Florida, taking advantage of previous year’s tax incentives the state offered. “Guardians of the Galaxy 2,” left, opted out of Florida, to shoot in Georgia, which offers excellent incentives — up to 30 percent — that benefit film companies and the state. COURTESY PHOTOS Like 35 other states in the nation, the Peach State, in effect, pays filmmakers who choose to shoot there. The monetary incentives are so attractive that Georgia now surpasses California and New York in total number of productions, offering tax credits as high as 30 percent of cost for movies made in the state.

Florida, meanwhile — once number three with California and New York in attracting movies and TV — has almost given up on its film industry, according to critics of Gov. Rick Scott and Republican House Speaker Richard Corcoran, who have stiff-armed incentive spending, calling it “corporate welfare.”

Their austerity has saved taxpayers from forking over incentive money to filmmakers like Georgia does, critics acknowledge. But they’ve surrendered hundreds of millions in economic boosts to Florida businesses in the process, a largesse ultimately worth far more coming in than the incentives going out.

Florida Weekly takes a look at the numbers and the results of a Sunshine State surrender, as some would describe it — the surrender of TV and filmmaker recruitment that could help Florida workers and Florida businesses.

How it works

If filmmakers spend $1 million in Georgia, the state promises $300,000 in tax credits. On top of that, Georgia also offers some sales-tax exemptions: Makers of films, television productions, music videos or commercial advertising, for example, don’t have to pay any tax on tangible items they buy for production, or property they lease or buy.

The negative economic impact on Florida due to the lack of film incentives has been estimated at $2.3 billion. 
* would have shot in multiple counties The negative economic impact on Florida due to the lack of film incentives has been estimated at $2.3 billion. * would have shot in multiple counties So is this just giving away taxpayer money?

Put another way: Are Georgia officials so fond of Baby Groot (a little character in “Guardians” who uses only one word, “groot,” to communicate with everybody) they’ll pay anything? Are they trying to get their friends recruited as set extras so they can meet big stars?

The answer is “No.” Instead, it’s good business and a great economic move to provide incentives, insists Georgia Gov. Nathan Deal.

“Georgia’s film industry provides a significant impact on our state’s economy, employing thousands of Georgians while developing infrastructure and boosting small businesses,” he said in a recent release. “The film industry has created a home in Georgia, and I am committed to retaining this relationship by constructing a strong, film-ready workforce that will continue to help the industry thrive.”

SCOTT SCOTT The consequences of such thinking are evident on the bottom line: The film industry generated an economic impact of more than $7 billion during fiscal year 2016, including $2.02 billion in direct spending, Georgia officials say — the result of 245 feature-film and television productions made in the state.

Shooting in Fayetteville, Cartersville and Atlanta, “Guardians of the Galaxy 2,” just by itself, employed nearly 1,400 local crew and extras, spent more than $4 million at local hotels for room nights, and spent more than $30 million at local Georgia companies for catering, makeup, construction supplies, set decorations, car rentals and more, says Emily Murray, a spokeswoman at the Georgia Department of Economic Development. The company also spent more than $75 million in actual production costs in Georgia.

DEAL DEAL Florida, on the other hand, has offered no tax incentives since 2014 (the state still gives a sales tax break to companies that produce film or television here), and has budgeted none for the coming year, says Mr. Lux. That’s a sharp departure from the past, when the state used tax incentives o attract such films as “Dolphin Tale” and “Iron Man 3.”

“Between 2004 and 2016, Florida had various programs to entice film, television and digital media companies and projects to Florida,” says Kelly Paige, outgoing president of Film Florida, and owner of Level Talent Group, a Tampa-based booking agency. Her company has booked actors into prominent roles such as Tigris in “The Hunger Games” Franchise, a “Seal Team SIX” member for the A&E production, and roles on “Bloodline” and the current Netflix hit, “13 Reasons Why.”

“Bloodline,” filmed and set in the Keys, generated $9.4 million in state and local revenue and $30 million in production spending to the area. 
COURTESY PHOTOS “Bloodline,” filmed and set in the Keys, generated $9.4 million in state and local revenue and $30 million in production spending to the area. COURTESY PHOTOS “Since 2004, for every $1 the state of Florida invested in an incentive program for the film, television and digital media industry, more than $5 was spent in the state by those projects,” she says. “If someone asked you for $1 but gave you back $5 would you take that deal?”

The answer, of course, is “Yes.”

That’s why most bigger film companies won’t even consider rolling film in a state that offers no incentives, according to those in the business.

For about three years since Florida’s incentive money ran out, pickings here have been meager, especially because Georgia or Louisiana locations can be made to look like Florida.

The HBO series “Ballers” recently pulled out of Florida and moved to California as incentives died. The HBO series “Ballers” recently pulled out of Florida and moved to California as incentives died. “Currently, like it or not, tax incentives are part of the equation for productions to make choices about where to film,” says Maggie McCarty, a member of the Paradise Coast Film Commission in Naples. “Not offering them takes Florida out of the competition. The economic benefits are documented and it is also the inclusion of Florida-based products in an overreaching marketing and branding plan that money can’t buy.”

Florida once lit up its local sets thanks to funding. Beginning in 2010, the Florida Entertainment Industry Financial Incentive Program offered $296 million in tax credits over a six-year period (although the money ran out in 2014) attracting both box office biggies and the trickle-down industry to the state’s sunny shores. During that time Florida hosted such productions as “Burn Notice,” “The Glades,” “Bloodlines,” “Graceland,” “Ballers,” “Magic Mike,” “Rock of Ages,” “Iron Man 3” and “Dolphin Tale,” to name just a few.

The movie “Dolphin Tale” was shot in Florida.The movie “Dolphin Tale” was shot in Florida.
The incentive brought millions to Florida in jobs averaging $74,000 a year, according to the state’s Office of Film and Entertainment, citing figures in an annual report — significantly more than the state salary average of $46,000.

Between 2010 and 2016, the Department of Economic Opportunity certified 303 productions for tax credits, estimating they spent $1.28 billion in Florida. More than $744 million in wages were associated with those productions, creating about 117, 400 Florida jobs, the report said.

Don Johnson and Philip Michael Thomas starred in “Miami Vice,” shot in Florida in the ’80s, before the state initiated incentives. 
COURTESY PHOTOS Don Johnson and Philip Michael Thomas starred in “Miami Vice,” shot in Florida in the ’80s, before the state initiated incentives. COURTESY PHOTOS But there are additional intangibles that also pay off for the state, proponents of incentives say: the way the nation and overseas Florida-philes view us, for example — as not just hot, but also cool.

Television has long pictured a lifestyle that moves many to visit the Sunshine State. “Miami Vice,” which ran for five seasons from 1984 to 1989, epitomized the hot-but-super-cool allure of Florida in general, and Miami in particular.

After the show took to the small screen, the city’s stature was permanently altered in the eyes of many Americans and international visitors.

MCCARTY MCCARTY “ ‘Miami Vice’ is why South Beach is South Beach,” explains casting director Lori Wyman, who has worked to cast actors in South Florida productions for 30 years.

Once upon a time, she recalls, “Ocean Drive was filled with rocking chair after rocking chair of elderly folks watching a deserted beach.” But when “Miami Vice” presented hard-bodied men, sexy women and fast, expensive cars and boats against the backdrop of blue water and easy living, things changed. “South Beach went from God’s waiting room to God’s playground. Oh, and that was before anyone got any incentives.”

Perhaps this breathes some life into the argument that it is not the incentives but the appeal. And we have it, whether the bottom-line suggests any truth in that view. “Moonlight,” after all — the achingly beautiful Barry Jenkins story of a young man coming of age in the Liberty City section of Miami — was filmed there, without incentives.

WYMAN WYMAN And it won “Best Picture” at the 2016 Oscars.

But that’s the rare coin.

Last summer, the HBO series “Ballers,” starring Florida enthusiast Dwayne “The Rock” Johnson, suddenly pulled out of Florida and moved to California when the incentives dried up. Mr. Johnson has local ties, but it didn’t matter.

The loss of “Ballers” represents about $20 million per season that will be spent elsewhere, leaving an estimated 2,500 Floridians without work, according to statistics cited by the Florida Office of Film and Entertainment.

Officials there did not return emails or telephone calls asking for comments.

Another show, the popular Netflix series “Bloodline,” filmed and set in Key West, generated “$65 million in new travel spending, 1,738 jobs and $9.4 million in state and local tax revenue in addition to the $30 million in production spending,” over a three-year period, according to the Florida Keys & Key West Tourist Development Council. But the producers scrapped the show, a huge loss for the Keys and South Florida economy.

D. KOCH D. KOCH Part of the reason may have been the cost of filming in the pricey Keys, with no state incentives, say critics of the Florida austerity.

What all this means, in part, is that movies designed to show Florida settings have actually been shot in Georgia, including two 2017 releases, Ben Affleck’s “Live By Night” and “Gifted,” with Octavia Spencer and Chris Evans.

As a result, the state has lost about $650 million in film and TV expenditures since 2013, according to Augustin Corbel, a lawyer and chairman of the Florida Film and Entertainment Advisory from 2010 to 2016.

C. KOCH C. KOCH “If we’re looking for diversification we can’t just be lighting the exit signs for talent to leave our state,” says Mr. Corbel. “I’m an optimist, it’s not a lost cause. But I’m a realist — we have a long struggle to regain preeminence in the top three (with California and New York).”

Especially with such organizations as the Florida office of Americans for Prosperity, funded by the Kansas-based Koch brothers, resisting incentives. The organization has vigorously lobbied against taxpayer incentives for cinema and television in Florida, as well as other forms of “corporate welfare,” according to its spokesman, Andres Malave.

That strategy has been embraced by such influential legislators as House Speaker Richard Corcoran, a Pasco County Republican.

Above: Emmy-winning Naples filmmaker John Scoular shoots the documentary “Paradise Reef” in Florida waters. At right: Southwest Florida filmmaker Tim Ritter frames a shot on set. Both vow to continue to shoot in the state despite lack of incentives. 
JOHN SCOULAR / COURTESY PHOTO Above: Emmy-winning Naples filmmaker John Scoular shoots the documentary “Paradise Reef” in Florida waters. At right: Southwest Florida filmmaker Tim Ritter frames a shot on set. Both vow to continue to shoot in the state despite lack of incentives. JOHN SCOULAR / COURTESY PHOTO “We were, by and large, the only organization in the state arguing against those incentives, and we’ve been doing it for the last four years,” Mr. Malave told Deadline magazine in an October story, “How The Power-Broker Koch Brothers Are Killing The Florida Film Business.”

Although he acknowledges that the film industry is an economic boon, Mr. Malave also argues that taxes should be used only for “education, in transportation, health care and things that are essential.”

“We have a great tax climate and tax-climate infrastructure (in Florida). What the rest of the country is doing is eliminating film programs because the return on investment hasn’t been there,” he argues.

Given the lucrative returns cited by officials on incentive programs for film and television in such states as Georgia, California and New York, the claim is untrue. Americans for Prosperity, however, also insists that it’s a matter of fairness.

“It doesn’t make sense to give one industry handouts over others,” Mr. Malave says. “Why shouldn’t, say, plumbers get that money?”

Although Americans for Prosperity has had considerable success lobbying against incentives in North Carolina and Florida, Mr. Malave offers only an oblique answer when asked about his organization’s activities in Georgia, which have appeared to be far less energetic.

“The chickens are going to come home to roost in Georgia,” he says.

RITTER RITTER In the Peach State, the Koch Industries company Georgia-Pacific, makers of such paper products as Angel Soft and Quilted Northern toilet paper, has received huge tax incentives, including $7.2 million in property tax breaks last fall in Atlanta where the company is headquartered.

Consequently the Americans for Prosperity criticism of incentives makes little sense to Florida indie filmmaker Tim Ritter, who also teaches film at the University of Central Florida.

“That seems kind of like bunk in general because state and national governments give all kinds of breaks to other sections of corporate America, all the time. It seems like they just don’t want to allow certain industries to take those winner spots,” he says.

“Aside from the obvious (economic impact), the cinema is also a major part of our culture and recent history. The entire world looks toward American films to help influence and shape their own ideas of the world we live in. Our cinema makes a huge impact on the day-to-day life of much of the world. That’s pretty amazing cultural capital.”

SCOULAR SCOULAR Cultural capital that can help Florida, too.

“When people visit Los Angeles, what are they going to want to see?” Mr. Ritter asks. “The glamor of Hollywood. Why not cultivate our own slice of cinematic tourism? I’ve heard tourism is a pretty big part of Florida’s economy.”

Lori Wyman, seizing on the notion, compares forms of corporate support from the state.

“If they give $10 million to build a prison system the state gets nothing back,” she notes. “If you give $10 million to a film you generally get $50 million of spending in the state.”

Ultimately, leaders won’t resist that bottom line appeal, even if they don’t like the movies or the art being made.

“While I am concerned,” Ms. Wyman says, “I think the film industry will come back. It may not be for years, but it will be back.”

Neither Ms. Wyman or Mr. Ritter plan to let the lack of state funding curtail their professional trajectories in Florida.

“I will continue in this state because my filmmaking does exist and always has existed outside of the industry,” Mr. Ritter said. “I’m about as independent as it gets, and my work is done on very small budgets. So I can make my work here on the cheap while teaching, which I love, and make that work. But if I ever wanted to make my living (solely) as a film or video professional again, I’d probably be casting a much wider net than just in this state.”

The lack of funding may not affect him, he adds, “but I know several professionals who have either moved out of Florida or left the industry altogether.”

Other artists struggle but endure, too.

John and Madeline Scoular left Hollywood after 17 years and relocated to Naples just before the turn of the decade.

They produce, direct and write feature films, documentaries and TV commercials, last year winning an Emmy Award for “Paradise Reef.” The independent documentary film is now appearing on PBS after screening at the 2017 Fort Myers Film Festival.

“Whatever the legislature decides to do with tax incentives has no bearing on Scoular Image,” says Mr. Scoular. “We have to shoot to feed our four children. We’ve made three feature films, two of them in Florida without incentives. And we will continue to do what we have to do to keep the lights on.”

That can mean uncomfortable travel, given the children and the demands.

“I’ve been hired to shoot in New Orleans, at Martha’s Vineyard and back in Hollywood,” he notes. “But our bread and butter is filming in the beautiful state of Florida. Especially where we live — there ain’t a bad shot to be had.”

Like many others who looked to get some of the money when it was available, Mr. Scoular says the incentives weren’t meant to attract smaller filmmakers to start with.

“In my humble opinion the incentives were set up for Hollywood films and TV production to bring their films to Florida, not for local Florida-based production companies.”

If you build it, he argues, Hollywood will come with such TV shows and films as “Glades,” and “Burn Notice.”

The way it worked, when it worked, was with limited tax incentives, he says. The big companies got most of the benefits, and everybody else had to get in line.

“Big Hollywood productions hired locals for the small jobs,” Mr. Scoular explains. “Creative types are just not going to be hired on a project whose genesis began in another state. Directors and principal actors rarely got hired on those jobs.”

So who did get hired when the incentives fueled business here?

“Grips, make-up artists, transportation companies, and extras,” he says.

“It was good for a select few. I think when the incentives ended there was a backlog of productions waiting to utilize the credits. And Hollywood left. No dinner, no movie, no goodbye note!”

Other artists have remained here as well.

“I’d move to Atlanta in a second if I could,” says Flip Minott, a multi-award-winning cinematographer with extensive credits and film experience in and out of Florida. “It is an abomination. We used to be third in the country.”

“The loss of state tax credit incentives has certainly been felt in every area across Florida that serves film, television and other entertainment production,” says Jeanne Corcoran, director of Sarasota County’s Film and Entertainment Office.

Which is why a few local governments, including hers, are offering their own incentives.

“We’ve seen the budgets for gross spending, by projects, continue to drop. By providing a cash rebate program for production and post production, Sarasota County has helped us keep the volume of productions fairly steady,” she says.

Graham Winick, the film and event production manager for the city of Miami Beach, is also working on some incentives, helping Film Florida develop a proposal called the Education Retention Bill.

The bill would offer as much as a 20 percent reimbursement to films and TV projects generated by graduates of a Florida University. But that incentive comes with a cap.

“In a nutshell, it offers a modest incentive of up to $500,000 for film, TV or digital media that hires Florida film and digital college alumni in four key roles,” Mr. Winick says. “(It) encourages alums to come back and hire other alums.”

The future

Many hope the governor and state legislators will reconsider offering incentives to television and film producers.

“We have been looking at a number of options over the last year. Our industry’s top priority is to collaborate with legislators to find common ground and hopefully find a solution,” Kelly Paige says. “Solutions aren’t found by just saying no, solutions are found by working together because we all have the same goal — to do what’s best for our state.”

Some, like filmmaker Scoular, point out “they have no problem raising taxes on stuff or finding ways to pay. Remember a 50 percent cigarette tax that was supposed to go towards health care? And the lottery is supposed to pay for education? Yet my kids’ public school has fundraisers all year to cover their financial shortcomings. They do OK with toll roads, bridges, airport and hotel taxes, though.”

Mr. Scoular has spent a lot of time thinking about the issues.

“If you can get them to think creatively, the film community might have a shot in getting something new and fresh, where everybody wins. I do, however, find it funny that you have organizations out there asking me to join them and pay them $500 a year so they can lobby Tallahassee so I can get tax credits.” ¦

— Florida Weekly writer Roger Williams contributed to this report. Eric Raddatz is the presentation editor at Florida Weekly, and founder of the Naples and Fort Myers Film Festivals.

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