EDITORIAL
New movie tax break could build workforce
Among the more interesting ideas floating at the Legislature this year is one designed to kick-start a healthy local film and television industry.
The measure, which has received preliminary committee approvals, is modeled directly after the experience of Canada. More than 15 years ago, Canadian authorities decided to mount an aggressive campaign to build a domestic movie, television and commercial film industry. Generous tax credits of up to 22 percent (national and provincial) were offered to production companies that hired Canadians for film work.
The idea was that more than mere tax breaks, producers were looking for a skilled workforce that could perform the "below-the-line" work ranging from camera and sound through electrical, special effects, laboratory and other support services.
Canada's experience (helped in no small measure by the currency exchange rate, which is quite favorable to American companies) has been positive. There has been a surge in Canada-based productions as the support capacity has grown. Tax subsidies have shifted from giving direct breaks for wage and salary costs to more sophisticated tax incentives aimed at ensuring that the newly trained and available domestic workforce will be employed.
The Hawai'i version of this idea would offer tax credits of "up to" 22 percent of the cost of wages and salaries incurred in the state. The credit scheme would "drop dead" in 2005 under the current version.
This plan is different in philosophy and scope that existing tax credit plans aimed at filmmakers and television. The current system is based primarily on the idea that films made in Hawai'i can promote Hawai'i, and thus are worth some kind of give-back. For instance, filmmakers today can recoup their 4 percent excise taxes if they somehow mention or feature Hawai'i in their production.
This latest plan focuses instead on building up a workforce for what could be a viable and attractive new industry. The short-term cost, of course, would be that the bulk of taxes a production might have paid will be lost. If it was clear that Hawai'i was just as attractive a locale for films or commercials as, say, Vancouver, then there would be little reason to give up the tax revenue.
But clearly today that's not the case. We are not overwhelmed with people wanting to film here, and don't have the workforce to support them if they did come.
This idea has the potential to build a substantial local filmmaking workforce. The rule-making aspect of this will become critical, because if it is nothing more than give-back for productions that bring all their workers in from Hollywood, we gain very little.
It must be clear that Hawai'i is willing to help movie, television and commercial filmmakers who are, in turn, willing to help build up a vital and sustainable film workforce.
We've been dazzled and disappointed by Hollywood promises before; this will work if it truly builds up an industry that belongs to, and stays in, the Islands.
