Wisconsin, Film, and Film Tax Incentives

We’re considering opening a MKE Production Rental office in Thailand.  Kyle is not pleased.

This is a call to all the Wisconsin lawmakers out there who want to take credit for creating jobs. You’re doing it wrong.  At the end of the day Friday, the Wisconsin legislature put the nails in the coffin of the film tax incentives, and shut the door on dozens, if not hundreds, of entrepreneurs who took a chance on Wisconsin becoming a state that is friendly toward film.

Over the last seven years, businesses like RDI Stages and Tilt Media rode the wave of enthusiasm and made huge capital investments to build studio space.  Smaller companies like us could count on a few extra customers from out-of-state, who would rather rent equipment locally than pay an airline all the extra baggage fees. The idea was so simple, it was approved quickly, with bi-partisan support.

The slide into ambivalence has been a slow process.  The film office closed in 2005.  The tax incentives began in 2008.  They were capped (or perhaps we should say “crippled”) in 2009, with an annual state limit of $500,000.  Then they added a $500 fee just to apply for the incentives.  Film Wisconsin added a per-project cap of just $100,000.  Small-sized projects (under $500,000 or so total budget) had the hurdle set too high.  And large-scale multimillion dollar productions saw too little return after the cap.  Film Wisconsin drifted from its original aim of being an advocate for local production, to being a private sales funnel for the few projects that still wandered in the front door.  Now, we’re left with an industry of unemployed employees, quiet offices filled with equipment, and the exodus of talented film and video makers to other states.

Film tax incentives made sense, and they still do.  The kerfuffle over accounting in 2009 muddied the waters, and shows that Wisconsinites want a clear picture of what they’re buying for their money.  I think that’s only fair, but it’s something that’s only going to happen when lawmakers do what they obviously should have done in the first place:  build a plan that makes sense, with simple administration, transparent accounting, and feedback from people in the film and video industry inside and outside Wisconsin.

Bringing back the film office sounds like a radical idea in this political climate, but can anyone argue that the experiment in public-private partnership that is Film Wisconsin has worked? Stamping one organization “Wisconsin-approved” isn’t the same as having an office that can answer questions, connect you with resources, and advocate for local workers, all without being motivated by private interests.  Film Wisconsin was a well-intentioned idea run by some of the most-vocal advocates for Wisconsin’s film industry, but it wasn’t the solution we needed. We need to admit it, fix it, and move on.

Wisconsin doesn’t need to be a copycat, we need to think Forward.  Creating a system that rewards local hiring, local buying, and local renting isn’t complicated. Writing it in a way that doesn’t leave taxpayers on the hook to pay Hollywood salaries only makes sense. And yes, a decade from now, if Wisconsin’s film and video industries are booming, let’s talk about scaling the program down. But please don’t invite all Wisconsin’s filmmakers to a party just to take the rug out from under us.  We’re entrepreneurs who are fighting to build a new industry in Wisconsin, just like the technology-driven and green industry sectors.  Any new business will fail 50% of the time even under the best circumstances.  We don’t need any help to make things harder.

As a filmmaker who learned almost everything I know in the state of Wisconsin, I’m left stunned.  Of course, I fully expect to be in Wisconsin next year, and MKE Production Rental will be there to help our customers and fellow filmmakers.  We hope that Wisconsin’s recovery eventually catches up with the rest of the country.  But in a fragile economy, in a bruised industry, with the tax laws tilting our customers into neighboring states, it’s time for lawmakers to stop talking about jobs and start making it easier for the skilled people that are already here to get back to work.

Posted by Jon Kline