Deleted Extras

Minnesota’s Film & Television Board faces a legislative re-write.

Like Hollywood, Minnesota’s relationship with the entertainment industry has seen a tumultuous career trajectory.  From being the ingenue of Midwestern locations in the 1990s, resulting in a bevy of films such as Fargo, Grumpy Old Men, The Mighty Ducks, to a discarded destination left in favor of Canada, Minnesota’s greatest entertainment legacy seemed to come more from the state’s exports (the Coen brothers; Diablo Cody) than production imports.

Left in Hollywood’s wake, two institutions survived – a small, but dedicated core of film and television technical professionals and the bureaucratic Minnesota Film and Television Board.  One group has created jobs; the other has lobbyists and now $10 million in tax incentives:

Six months after receiving a record $10 million to lure films to the state, the Minnesota Film & TV Board is under fire, with some legislators and industry insiders questioning whether it should exist at all.

Legislative Auditor Jim Nobles’ concerns about the board have escalated to a point where he plans to seek a formal examination of it next month, when the legislative session begins. If the evaluation is unfavorable, funding for the program known as “Snowbate,” and even the board’s future, could be in jeopardy….

“In addition to an audit, an evaluation is really needed to address broad policy questions,” Nobles said. “Should the state be involved in supporting the film industry? If yes, what would be the most effective approach, and who should be in charge of that effort?”

The fate of the “Snowbate” and the Film Board itself seems to be a movie stuck on an infinite loop.  In the mid 2000s, and as recently as 2010, the necessity and/or effectiveness of the Film Board was constantly being called into question, as few films chose Minnesota as their location – even those scripted as taking place in the state.  Leatherheads, New in Town, Juno, Jennifer’s Body, Contagion and Young Adult all take place in Minnesota and with the modest exception of a few scenes of Young Adult, none shot a second of footage in the state.  Other films, like Homefront or Gran Torino were rewritten to reflect moving the location to outside Minnesota.

The Film Board has countered that they do create jobs, suggesting numbers as high as 338 full-time positions in return for $3.3 million in subsidies.  But film and television work, by its nature, is not “full-time” but merely temporary.  And considering the increasingly broad definitions of the Snowbate guidelines to include advertising campaigns and web-based content, it would appear that all the Snowbate is accomplishing is subsidizing temporary Minnesota-based work, not bringing in funds or employment from out of state.

Minnesota isn’t the only state that’s reexamining whether or not film tax credits actually bring in revenue.  Indeed, the trend-line seems to be going the other direction:

…It’s hard to get a good handle on the exact impact of an in-state movie production. In most places, the only reports on movie-production revenue and jobs come from the state film office–or the movie industry itself. Objective studies are relatively hard to come by. And even where independent studies of film incentives do exist, the data can easily be interpreted in myriad ways.

Take Massachusetts, which has offered a 25 percent film incentive since 2006 and already has attracted numerous big-name projects and stars, including Tom Cruise, Cameron Diaz, Leonardo DiCaprio and Mel Gibson. The Bay State is one of only a couple that require an annual, independent report on how the incentives are performing. When the most recent report was released by the Department of Revenue in July 2009, tax-incentive opponents said it unequivocally showed the credits weren’t working. According to the report, the state paid out $113 million in movie tax credits in 2008, while filming in the state generated $17.5 million in new tax revenue and created about 1,100 full-time-equivalent jobs for state residents.

Lost in the discussion is why so many films were attracted to Minnesota in the first place – the filmmakers were from here.  Mighty Ducks‘ director Mark Steven Johnson is a Hastings native.  Joe Somebody‘s writer John Scott Shepherd worked in the Twin Cities.  Thin Ice‘s director Jill Sprecher is a Wisconsin/Minnesota native.  And the list of below-the-line production people from Minnesota in Hollywood – the casting directors, the location scouts – is extensive.  Relatively few economic incentives were required (or even existed) in the 1990s to encourage filmmakers.  The same appears true today.  The limits of the Snowbate didn’t seem to stop the Coen brothers from shooting 2009’s A Serious Man in their hometown of St. Louis Park.

Minnesota isn’t going to win a contest of who can subsidize more Hollywood fare for little (or no) economic return.  And if even a navy-blue political state like Massachusetts can realize that film tax credits only result in a state being taken advantage of like a young actress on a casting couch, Minnesota might be able to come to a similar conclusion.

7 thoughts on “Deleted Extras

  1. Noble’s job is to audit state government, to look over their books, to make sure they’re following accounting principles, to make sure the agency is accountable for its money. If the state is going to subsidize the film industry, he should audit them to ensure us they can keep track of the money.

    But it’s not his job to decide WHETHER to the state should subsidize the film industry. That’s the legislature’s job. He’s out of bounds.

    I agree we shouldn’t offer the subsidies. I object to him being to one to say it. Bureaucrat’s gotta know his limitations.

  2. We’ve already been extorted into giving far too much money to the “The Arts and Cultural Heritage Fund”. There’s never enough for these people.

  3. The libertarian in me says “why are we subsidizing big money from Hollywood”, but I’m not worried about a legislative auditor more or less repeating what he was told to investigate. He is, after all, responsible for getting data to the legislature to address important questions.

    And of course, as Hayek and Bastiat would tell us, the answer is “it doesn’t do much good”. Duh.

  4. Scott Hughes has stolen my solution. Wasn’t the clean water, land, and legacy amendment made just for such purposes? After all, how many wetlands do we really need? If we can subsidize Zygi, we should be able to do the same for Spielberg. It’s not like we’re using tax-payer’s money.

    Don’t forget to add “A Prairie Home Companion” to our list of noteworthy accomplishments. Wasn’t it fun to see Meryl Streep around town, “just like us”? Can’t put a price on that …

  5. Aren’t these subsidies the sort of ‘race to the bottom’ competition with other places that liberals hate? Or do they only hate it when the businesses attracted don’t hire liberal arts majors?

  6. I think the Bachelor Farmer restaurant would be a prime setting for the next Minnesota blockbuster (movie, not rental outlet, although I’d probably appreciate the latter more …)

  7. “Okay, ya’ sure you want ham with that omelette? That’ll be an extra fifty cents, y’know.”

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