Trying to Keep the Movies From Moving

Saying that runaway production is not just a Hollywood problem but a national one, six congressmen Wednesday vowed to support legislation to encourage filmmakers to stay in the United States, instead of leaving for cheaper locales such as Canada and Mexico.

Led by Rep. Mark Foley (R-Fla.), chairman of the Republican Caucus’ Entertainment Industry Task Force, the representatives held a forum at a hotel here to discuss potential measures ranging from tax incentives to trade tariffs.

The most concrete proposal was offered by Rep. Jerry Weller (R-Ill.), who has co-written a measure to provide a tax rebate up to $4,000 for each worker on lower-budget productions shot domestically.

Weller, who called himself the “Blues Brother” congressman because parts of that movie were shot in his Chicago district, suggested the bill would have the best chance of passing if it is attached to a larger bill raising the minimum wage. That bill is slated for consideration this spring.

The crucial step will be persuading Congress that runaway production hurts the U.S. economy as a whole, he said.

“So many people out there wrongly think that this is a Hollywood issue,” Weller said. “It’s not. It’s a Chicago issue. It’s a Texas issue. It’s a New York issue. It’s a national issue.”

Also at the forum were Reps. Howard L. Berman (D-Mission Hills), Gary A. Condit (D-Ceres), Howard P. “Buck” McKeon (R-Santa Clarita) and James E. Rogan (R-Glendale). About 30 people representing different niches of the entertainment industry attended.

Participants said the runaway production issue is national in scope because every state faces stiff competition from Canada, which heavily subsidizes its growing film industry. American producers who choose to film north of the border receive substantial tax breaks and benefit from lower-value Canadian currency and cheaper labor.

In 1998, between $573 million (the Canadian estimate) and $2.8 billion (the U.S. estimate) of filming skipped off to Canada.

At the forum Wednesday, the six congressmen indulged in a hefty dose of Canada bashing.

“We’re all for free and fair trade, but what Canada is doing isn’t fair and we have to do something to level the playing field,” Foley said.

Berman also has strong words on the matter.

“If we sit around and watch them lure more and more production away with subsidies without doing anything, we’re real patsies,” Berman said.

The congressmen said they planned to pressure U.S. trade delegates to confront their Canadian counterparts about film subsidies. A more radical response could be slapping a tariff on films shot outside the U.S., something that several industry representatives advocated at the forum.

Under the North American Free Trade Agreement, the film industry is exempt from free-trade guidelines because it is classified as a cultural industry.

As a result, a movie filmed in Canada starring Dennis Rodman and set in Chicago was recently labeled Canadian cultural content, which is ridiculous, Weller said.

Officials in Canada’s film industry, however, defended the practice.

“What we’re doing is not unfair,” Rob Egan, the president of the film commission in British Columbia, said in a telephone interview. British Columbia has seen its production revenues rise from $12 million in 1978 to $1 billion in 1998.

“That exemption allows our emerging cultural industries to compete in a huge market,” Egan said.

Egan added that Canadians typically make up 10% of the North American market and should be encouraged to make some movies themselves.

Another idea the House members discussed at the forum was using their influence to encourage the Small Business Administration to provide American filmmakers with loans to entice them to film at home.

Runaway production emerged as a major concern last summer, with out-of-work grips, gaffers and other crew members marching down Hollywood Boulevard demanding government action. But it’s not clear how severe the problem is, because even though there has been a dip in local production this year, there are still thousands more production jobs now than five years ago.

Several state legislators have tried to get bills passed that would give producers tax credits for shooting productions in California, but Gov. Gray Davis has yet to sign those bills.

Still, local politicians are encouraged by the rising national attention to the problem.

“We have a $30-billion industry that is disappearing in front of our eyes,” said Assemblyman Scott Wildman (D-Los Angeles), who has been pushing for tax rebates. “This is a national issue, and it’s encouraging to see Congress mobilize around what we started.”

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Local production days in decline

The number of days committed to the rpoduction of feature films, commercials, television and music videos in L.A. County has fallen off in recent years.

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Source: Entertainment Industry Development Corp.