Arts & Entertainment

Budget impasse in Annapolis threatens thriving local TV industry

Tax CreditsPoliticsBusinessFinanceBusinessHouse of Cards (tv program)Annapolis

After four tough years, these are heady days in the world of Maryland TV and film production.

Last month, "Game Change," the Baltimore-made HBO docudrama on the 2008 presidential election, premiered to strong reviews and even stronger debate.

This week, "House of Cards," the $100 million Netflix political drama starring Kevin Spacey and Robin Wright, starts filming after three months and millions of dollars spent in pre-production on sets in Harford County and Baltimore.

And next Sunday, "VEEP," starring Julia Louis-Dreyfus and filmed in Columbia, debuts on HBO.

But all the jobs, money and excitement that Hollywood has brought to Maryland during the last year in could soon disappear amid all the finger-pointing and blame-gaming over the budget impasse in Annapolis.

An industry that was brought back from the dead after "The Wire" finished its run in 2007 hangs in the balance as everyone wonders what's going to happen — or not happen — next in terms of Maryland's "doomsday" budget mess.

Among the many matters that the legislators failed to address as they skulked out of Annapolis last week was Senate Bill 1066, which would raise the amount of money available for tax credits to Hollywood filmmakers from $7.5 million to $22.5 million a year — and would extend the program started last year to 2016. It is now scheduled to end in 2014.

"The production incentive program Maryland enacted last year was an instant success, attracting world-class projects," says E. Scott Johnson, chair of the Maryland Film Industry Coalition. But he says projects "will almost certainly leave Maryland for subsequent seasons" unless the new incentives are approved.

John Melfi, one of the executive producers on "House of Cards," says incentives are essential to his series filming in Maryland — an operation that is expected to spend $70 million here this year and next.

"Having the incentives available was a major factor in deciding to shoot 'House of Cards' in Maryland," he said Friday. "We wanted to shoot in Maryland because of the locations, crew and support that we were receiving, but if the necessary incentives were not available, we would have had to shoot Season One elsewhere."

While "VEEP" is guaranteed a second season of incentives, "House of Cards," which started six months later, is not. All of the money allocated in 2011 at the rate of $7.5 million a year is already spoken for. Without the increase from SB 1066, there is nothing left in the kitty to bring any TV or film producers to the state in coming years.

"Thousands of workers and businesses are anxiously waiting to hear the fate of SB1066," says Debbie Donaldson Dorsey, director of the Baltimore Film Office. "At this moment, we are simply on hold."

While gambling and the immediate funding future of such civic institutions as Baltimore's public schools have rightfully been the headline stories in the Annapolis budget breakdown, the fate of Maryland's TV and film industry is also important.

It certainly is representative of larger issues facing Maryland's economy in the way that in-state jobs and money spent at Maryland businesses could wind up in places like Pennsylvania, which is going out of its way to be more welcoming to Hollywood.

Maryland only has $7.5 million a year to offer in tax incentives to Hollywood producers; Pennsylvania has $60 million. New York has $420 million. North Carolina, Georgia and Louisiana have uncapped annual funds to bring producers to their states.

In 2010, Maryland had only $1 million in incentives, and critics of any tax break for Hollywood producers argued that in such tough economic times, there were more pressing financial matters for the state to spend its scarce dollars on.

But last year, Gov. Martin O'Malley, who had at one time seemed to agree with the critics, signed the bill that increased the incentives to $7.5 million a year and brought HBO to town with "Game Change and "VEEP."

And the state isn't actually "spending" money on the Hollywood productions that set up shop here — at least, not in the way that it does when it allocates funds to run an operation like Maryland Public Television, where the money goes pays to keep the lights on in Owings Mills.

Under the tax incentive program approved last year, companies like HBO come into the state and spend their millions in lumber, paint supplies, housing, salaries, rental cars, catering and renting buildings.

And then, after they have finished production on a season's worth of shows, they use their receipts for money spent in Maryland to create and present an independently audited account to the state. The Maryland Film Office then reviews that accounting and issues a tax credit at the rate of 27 cents on the dollar.

In some cases, it will take two to three years before any money goes out of the state coffers to HBO or Media Rights Capital, the production company making "House of Cards" for Netflix, even though they have been spending here since the day they arrived for pre-production and location scouting.

Talk about a near-instant economy-starting and job-providing program.

"Before this, I had to go out of town to find work, which is very disconcerting because there was no work here the last few years," said Fran Gerlach, a Baltimore resident and member of Local 487 of IAETSE, the union that represents painters, carpenters, electricians, set dressers, grips and wardrobe workers.

"But it wasn't happening before incentives, I can tell you that," she said in a recent interview during a break on the "House of Cards" soundstages in Joppa.

"'House of Cards' coming here means tens of thousands of dollars to us," says Bryan Koerber, owner of Budeke's Paints & Decorating, one of the Baltimore companies that has been a supplier for the production. "It keeps people employed. It keeps our trucks on the road. It keeps our products flowing."

All the spin out of Annapolis, as the various political players try to explain how we wound up with a "doomsday" budget that was never supposed to go into effect, sounds weak, tinny and even false by comparison, doesn't it?

david.zurawik@baltsun.com

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