Can extension of film tax credit program create movie magic in Louisiana?

Greg Hilburn
Lafayette Daily Advertiser
More than 100 people supporting a bill to extend Louisiana's film tax credit program packed the House Ways and Means Committee room Monday, May 24, 2021.

A bill designed to keep creating movie magic in Louisiana cleared another hurdle during its first state House hearing Monday, moving the measure one step closer to passage.

Senate Bill 173 by Republican Slidell Sen. Sharon Hewitt, which would extend Louisiana's annual $180 million film tax credit program for three years through 2028, advanced from the House Ways and Means Committee.

"This is an industry that requires a longer runway," said Hewitt, who has two movie and TV production studios in her southeastern Louisiana district. "It can take three or four years to begin production of a movie and three or four years before that to greenlight the project."

Hewitt's bill, which has already secured full Senate approval, will next be debated by the full House.

FILM INDUSTRY:Hollywood South sequel? Bill would extend Louisiana film tax credit program

Supporters of the Louisiana film tax credit program wore  lapel stickers showing their support in a House Ways and Means Committee hearing Monday, May 24, 2021.

Movie executives testified in previous debates that the industry is on the rise again in Louisiana with 15 current projects in the pipeline. 

Last week, Disney announced it would begin production on the $40 million live-action film "Crater" in June in Baton Rouge.

Streaming services like Netflix, Hulu, Apple and others are ramping up production in addition to traditional production from studios and networks, industry executives have testified.

Louisiana burst onto the movie and TV production scene in 2002 by offering lucrative — and unlimited — tax credits. But production plunged in 2015 when the Legislature capped the credits and instituted a convoluted process to cash them in.

Another tweak to the program in 2017 led to a resurgence in production.

Hewitt said $430 million was spent on production in 2020.

Hewitt's bill won't change the current annual cap of $180 million in available credits, but it would allow any unused credits to carry over to the following year, though there hasn't been a year in which all the credits weren't exhausted.

The measure cleared the committee without objection, but not without resistance from Republican Eunice Rep. Phillip DeVillier.

"I want to make it clear that we're setting priorities here," DeVillier said. "This is three times more than we're spending on roads and bridges (annually)." 

Critics of the program note a previous study that showed Louisiana recouped only 23 cents for every $1 credit, and Legislative Auditor Greg Albrect called that a "best-case scenario" during Monday's debate.

But officials from the state's economic development department said the overall economic impact outside of the direct return of taxes to the state is $6 for every $1 spent by the productions. They estimate the industry supports about 10,000 jobs.

Tourism officials from Lt. Gov. Billy Nungesser's office testified that 53% of visitors said something they saw about Louisiana in movies or on TV motivated their trip to the state.

"They are creating tons and tons of jobs," Hewitt said.

Greg Hilburn covers state politics for the USA TODAY Network of Louisiana. Follow him on Twitter @GregHilburn1