Posted on: Saturday, February 5, 2005
No word yet on 'Lost' tax credits
By Sean Hao
Advertiser Staff Writer
State lawmakers were in no rush this week to push through a bigger package of tax breaks for movie and television production, despite threats the popular television series "Lost" might leave Hawai'i.
Last month officials for ABC's "Lost" announced the show is considering shooting elsewhere because of Hawai'i's high cost. Producers want more tax breaks to offset an estimated $500,000 lost on the creation of each episode.
State film officials hope the Legislature will take action before March, when the producers of "Lost" said they will make their decision on where to shoot the show's second season. But both the Senate and House this week deferred decisions that would have advanced industry incentives through the legislative process.
While there appears to be broad support for providing the industry additional incentives, such legislation won't be fast-tracked, said Rep. Glenn Wakai, D-31st (Salt Lake, Tripler), vice chairman of the Economic Development & Business Concerns Committee.
"They're trying to persuade us to do something to try to provide reassurance to 'Lost,' " he said. However, passing a law "is a time-consuming process."
Historically, most of the bills passed by the Legislature are sent to the governor starting in late April.
Among the proposed TV and film industry incentives are bills pushed by Gov. Linda Lingle that would raise the current 4 percent production tax credit to 15 percent on O'ahu and 20 percent on the Neighbor Islands.
Donne Dawson, state film commissioner, has said the 4 percent production credit is not competitive with incentives offered by other communities, particularly when the high cost of filming in Hawai'i is taken into account.
The credits would be capped at $7 million a year per project under a bill that is similar to one introduced last year that died in the waning hours of the session because lawmakers couldn't find room in the budget. Thanks to a healthy economy and strong tax collections, money appears to be less of an issue this year.
Charissa Gilmore, vice president of media relations for "Lost" producer Touchstone Television, would not comment on any time frame for deciding where to shoot the second season. However, Ted Liu, director for the Department of Business, Economic Development and Tourism, said he was disappointed the process isn't moving along at a faster pace.
"The film studios and production companies all have a timetable," said Liu, whose agency oversees the state film office. "They have to make decisions.
"I'd like for things to happen faster, but it's not really up to me. It's up to the legislative process that we have."
It's believed "Lost" spends $1.5 million to $2 million or more per episode, while generating about 200 full- and part-time jobs. Just how much the state provides the show in the form of tax breaks is not available to the public.
"Lost" is claiming both the existing 4 percent tax credit on qualifying expenses and 100 percent tax credit on investments under the state's Act 215 technology incentive program.
The debate over incentives that could help keep "Lost" comes at a time when "North Shore," which also is shot locally, is on hiatus. A third TV show — "Hawaii" — was canceled last year.
Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.
