Film industry stakeholders spoke to Georgia lawmakers Wednesday about the benefits of the state's Film Tax Credit during the second day of meetings examining the tax incentives.
The incentives recently came under fire after state auditors found loopholes in the process and an overestimation of their impact. Speakers at Wednesday’s House Working Group on Creative Arts & Entertainment Committee meeting said the film tax credit has been a stronghold for the community.
Michael Akins, business agent for a local chapter of International Alliance of Theatrical Stage Employees, said the credit has allowed his chapter to grow and supplied the group's members with sustainable employment.
Akins told committee members that the film tax credits have stimulated a 1,300 percent growth in his membership. The union chapter has grown from 400 members in 2008 with $8 million in wages to more than 5,000 members with $300 million in wages in 2019, most of whom are Georgia residents, Akins said.
“That money is staying here. Those wages are staying here,” he said. “It’s being generated here in the state.”
Last month, state auditors released two audit reports citing more than a dozen discrepancies in the state’s film tax credit program. Enacted in 2005, Georgia’s film tax credit gives a 20 percent tax incentive to production companies that spend at least $500,000 on selected projects in the state. Companies that promote the state in their work get an additional 10 percent credit.
Auditors reported that Department of Economic Development officials who administer the program inflated the economic impact of the program by using calculation metrics that double the projections.
Yet Richard Baxter, associate vice president of Columbus State University’s Engagement & Economic Development for University Advancement, said the film industry has helped develop itself outside of the metro area of Atlanta into Columbus, Georgia, which generates an economic boom in his city.
The university has started a workforce of about 300 people to complete 10 projects over the next three years while production companies also stand to benefit from Columbus’ $5 million film fund.
“I can tell you that the tax credit is the seed that germinates, that moves the film industry out of Atlanta,” he said. “Without it, the small producers we’re looking at (that $3 million to $10 million film), they used that credit as a means to leverage investment in their production.”
State auditors also reported that the film tax incentives were issued to more than 80 ineligible productions, costing taxpayers $60 million. Auditors are calling for mandatory audits and stricter processes.
The committee also held a meeting Tuesday, where state officials responded to the auditor reports.
The Department of Economic Development in its initial response agreed with stronger review measures but said it is crippled by a lack of resources. Economic Development officials disagreed with the auditors' conclusions on the ineligible credits that were issued.
The House Working Group on Creative Arts & Entertainment Committee will continue to hear testimony in response to the audits after the General Assembly reconvenes Feb. 18.