Give careful study to film subsidies

Everyone likes a good movie, and at least one South Carolina legislator wants to keep the reels rolling on the production end.

The anticipated resurgence of filmmaking in South Carolina hasn’t emerged as some thought following the Hollywood writers' strike. State House Speaker Bobby Harrell, R-Charleston, wants to entice the industry by expanding wage rebates for in-state and out-of-state workers and to create an apprenticeship program for residents to gain experience in the industry.

In 2005, at least 36 states were in an intense competition for film-making revenue and adopted tax incentives to entice production companies. But the incentives introduced by South Carolina were altered in June 2007, according to Harrell, and it has diminished the state's competitive edge.

Seeking to ensure the state's return on investment and encourage the hiring of South Carolinians instead of out-of-state workers, the South Carolina Commerce Department's Coordinating Council for Economic Development changed incentives for wages and purchases. Wages for out-of-state workers averaged three times higher and total wages about five times higher: $7.3 million versus $35.5 million, a commerce spokesman told The (Charleston) Post and Courier.

Following approval of the 2005 incentive package, the state booked nine feature films, a television series and a TV pilot, Harrell said. Since the change, only one television pilot has been filmed here. Some blame the writers' strike.

We agree with the governor's office that it doesn't make a lot of sense to offer huge incentives to hire people from outside the state. If anyone needs a break, it would be South Carolinians. But Harrell cited a study released last month by the Moore School of Business at the University of South Carolina that analyzed seven productions made here during 2006 and 2007. The study found that every $1 spent on wage rebates brought $1.30 to the state and every $1 spent on supplier rebates generated $3.86, producing more than $25 million in economic activity.

The thing we'd like to see is how that translates into wages and increased quality of life for a South Carolina family. Another would be the residual effects movies and their stars have on attracting tourists to a community.

The legislature has offered some ill-advised incentives in recent years to well-heeled companies that some South Carolinians don't embrace. Those offered to Cabela's, an outdoor sporting goods chain, are an example. The package granted to Cabela's included a $2,500 per-job tax break every year for five years — amounting to $3.75 million. Cabela's also would receive up to 50 cents in rebates on every dollar generated in sales tax — which could total $1.4 million per year. Bass Pro Shops received similar incentives. Other retailers don't receive such treatment.

Harrell's ideas about creating crews and a supplier base are on target, and we would hope the filmmakers would hire them.

Creating a competitive edge is difficult, and it must have the right balance of incentives. Other states also are on the trail of the entertainment industry business. Everyone wants to create jobs, but lawmakers should take a close look at the return.