State also to buy back credits at 85%
By CAROLE HORST
July 16, 2009
Louisiana is keeping the good times rolling with a 5% hike in its transferable production credit to 30% — upping the ante in the competitive production incentive market.
New to the program is a state buyback of the credits at 85% of their face value — in effect, “the state has created a floor of 85¢ on the dollar,” said Micha Haley, deputy director of the New Orleans Office of Film & Video City, a strategic measure that will substantially increase the amount of the money that filmmakers get when selling the credits. Haley said that not only does the buyback program give Louisiana a huge boost over competing states, but that the entertainment industry has specifically asked for that component.
Before July 1, Louisiana offered a 25% incentive with a local spend of $300,000 plus 10% for local labor; the new law keeps that same ratio: 30% for production with 5% for local labor.
The production tax incentives were backed by Gov. Bobby Jindal, who signed the bill July 9 along with several others intended to boost everything from the entertainment industry to sound recording to digital media to hybrid cars.
But it was not all smooth sailing, given that states have been pounded by the recession and are desperate to make budgets work. Haley said that Jindal’s team went over the program’s numbers and was convinced. Indeed, in 2008, the film biz was responsible for an estimated $230 million in direct economic impact on the New Orleans area.
To date in 2009, New Orleans has seen more than $100 million in direct economic impact. “These numbers speak powerfully for themselves,” said Haley. “Our program works, it’s reliable … (and the) turnaround time is as soon as two to three months,” he said.
To attract more long-term investment, the new law also stabilizes the program by making the incentives permanent.