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Incentives for film, TV productions may be in jeopardy again
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Sunday, 01 December 2013 20:20

Incentives for film, TV productions may be in jeopardy againIncentives for film, TV productions may be in jeopardy again Will Larry Hogan be the politician who takes down Frank Underwood? Frank Underwood might be the most powerful leader in the world on "House of Cards," but his fate could be determined in coming days by a small group of Maryland politicians led by Gov.-elect Larry Hogan. The dust has hardly settled from last year's bruising battle over the amount of tax incentives the state would give "House of Cards" to keep the Kevin Spacey drama filming here, and already the Netflix series is back in the cost-cutting cross hairs. Two real-life political developments have the film and TV production community here deeply worried that Maryland and "House of Cards" could be parting ways for good after filming of Season 3 ends next month. First is a Department of Legislative Services report that says the state is only getting a 10-cent return on every dollar given in tax credits to film and TV producers who make their movies and shows here.

There is a hearing Tuesday in Annapolis on the report, which recommends that the state stop funding the tax incentive program as of July 1, 2016, when it is scheduled to end. That would likely mean the end of the marriage between Maryland and "House of Cards" — as well as HBO's "Veep. " "Cards" has filmed much of its first three seasons in Baltimore and in Harford County (including renting space from The Baltimore Sun and Tribune Media), while "Veep" has largely been shot in Howard County. It would also reduce to near zero the chance of any major TV series being made in the state in the near future.

The second and most important change: the election of Hogan. The Republican businessman ran and won an unexpected victory in large part on promises to cut state spending and reduce taxes even as Maryland deficits mount. The pressure will be on him from day one to make good on his promises, and "House of Cards" and "Veep" are looking like a fast and high-visibility way for him to do that. Jed Dietz, director of the Maryland Film Festival and a board member of the Maryland Film Industry Coalition, which advocates on behalf of incentives, acknowledges how bad the report makes the program seem. "This is by far the worst report DLS has ever given this program," Dietz said.

"It's less than half. It used to be in the 22- to 25-cents range [return on the dollar]," he continued. "But now, all of a sudden, it has come out and somebody has just decided, probably sincerely, that these kinds of programs don't work and, therefore, they should be slashed.

I mean, if you really believe that study, that would be your only conclusion." That's certainly what The Washington Post concluded in an editorial published Nov. 20. "Maryland Gov.-Elect Larry Hogan (R), who campaigned on a platform promising extensive but gauzily defined spending cuts has just been handed a small gift by the state's nonpartisan legislative analysts," the editorial said.

"In a new report, they concluded that for every dollar in tax credits that Maryland has lavished on film and TV productions — $62.5 million over the past three years, most of it to HBO's 'Veep' and the Netflix production 'House of Cards — state and local governments have reaped just 10 cents in tax revenue. "If there's a fatter target for Mr. Hogan's budget-cutters, we don't know what it is," the editorial said.

Talk about painting a bull's-eye on a program's back. But as bad as things might be looking as the public conversation begins with Tuesday's hearing, there are several voices in favor of the incentives that have gone overlooked.

One of them belongs to Anirban Basu, chairman and CEO of Sage Policy Group, a Baltimore-based economic and policy consulting group. The idea of ceasing production in Baltimore is terrible for the city's cultural growth. While House of Cards and Veep are not set in Baltimore, as Zurawik states, they help to show Baltimore in a light that not many people expect. These shows may not bring in very much revenue per.