December 3, 2010

"Body of Proof" Flips Paiva-Weed on tax credits

Marc Comtois

The upcoming, filmed in Rhode Island, ABC show Body of Proof (starring Dana Delaney and Jeri Ryan) was feted at the State House today. Both Delaney and Ryan extolled the virtues of the Ocean State while executive producer Matt Gross explained that it was the tax credits that brought the production to Rhode Island:

"Having produced ten feature films and 200 hours of television all over the United States and out of the country, I can tell you this has been my best experience to date," said executive producer Matt Gross. "The state supports the needs of production like no other I have ever been to."

Gross credited the film and television production tax incentive -- which provides a 25 percent transferable credit for all related spending in Rhode Island -- with drawing the project to Rhode Island.

According to the ProJo report, "The tax breaks cost the state nearly $10.1 million in fiscal year 2009, for example, according to the state Budget Office." Of course, that's "cost the state" insofar as you accept the faulty premise that the production would have come to RI without the tax incentive in the first place! In reality, the filming has generated both revenue and a convert:
The production has generated more than $30 million of revenue in Rhode Island and has led to the creation of about 170 (temporary) full-time jobs, said State senate president Teresa Paiva Weed...."I was one of the skeptics when the film tax credits came out ... but have come ... to be a real believer because we now know that it works," said Paiva Weed. "A recent study showed that the film tax credit generates $8 for every $1 of investment from our state. And I don't think there's a better investment that also builds on our tourism industry."
Hm. I guess the proof was in the "Body." (Sorry, couldn't resist). Too bad our political readers can't extrapolate from here and realize what would happen if you made broad-based, business friendly tax incentives instead of just ones that appeal to this or that niche.

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Let's see... 10.1 million dollars divided by 170 jobs is about $60,000 per job. With job creation plans like this, we're just 4.1 billion dollars away from (temporary) full employment!

Who the heck does the actuary work on these programs?!

Posted by: mangeek at December 3, 2010 6:10 PM

The RI Historic Tax credit which was touted first in nation and a model for the country was for every $1 spent in credit was returning $5 in state-wide economic activity including putting properties back on the tax rolls, creating jobs and affordable housing however the community alarmists in the state caused Smith Hill to scale back the program causing projects to be canceled and business to move out of state. Somehow Smith Hill ended up lumping the film tax credit with the historic tax credit as money given away with no real state-wide benefit.

According to the Motion Picture Association of America the average one-day on-location shooting delivers approximately $225,000.00 to the local economy a day.

In 2008 Rhode Island had 12 movies and 9 TV shows employing 1,494 direct jobs bringing in $57.2 million in wages.

In 2008 Hawaii had 9 movies and 9 TV shows employing 2,998 direct jobs bringing in $96.2 million in wages.

Hawaii is nicknamed “Hollywood’s tropical backlot”. The Hawaii film tax credit is 15% on Island of Oahu and 20% on all other islands however all the movie/TV sound stages are located on Oahu with a new 22 acre Kapolei Studios being constructed consisting of 4 each 18,000 sq ft TV/movie sound stages and a 60,000 sq ft support building/offices and backlot plus Walt Disney Co. is completing a new 800 room themed hotel/resort/spa/convention center adjacent to Kapolei and moving 2 cruise ships to the Pacific Ocean.

Jan 12, 2011 Island of Oahu again is featured on ABC TV as South American jungle in the new medical series “Off the Map” with a pretty exciting cast line up. ABC’s hit TV program “Lost” which ended this year was filmed entirely on Oahu. NBC TV “Hawaii Five-0” is currently filmed on Oahu in Honolulu and Waikiki Beach; so is NBC TV “The Event” and A&E “Dog: The Bounty Hunter”.

News release with photos and bios of TV stars in ABC TV “Off the Map” airing Jan. 12, 2011:

Some feature movies to be released in 2011 and 2012 recently filmed 2010 in Hawaii and on Oahu are “Get A Job”, “Soul Surfer”, “The Descendants”, “Just Go With It”, “Rise of the Apes”, “Pirates of the Caribbean 4: On Stranger Tides”, “Battleship” (based on Hasbro’s classic Naval combat game) and “Journey 2: The Mysterious Island”.

Posted by: Ken at December 3, 2010 7:56 PM


The $10.1 million was the State of RI tax credit for fiscal year 2009 for all movies and TV shows filmed in RI and has limited relationship to the current production of ABC TV’s “Body of Proof” unless filming started within fiscal year 2009.

In the article it quotes ABC TV “Body of Proof” production has spent an “estimated $30 million” filming in RI and creating 170 temporary full time positions which means the average daily cost of filming on location $225,000.00 is spread across all daily operational costs of operations and filming, per diem, food, security, rental, transportation, wages and salaries to RI local economy.

Posted by: Ken at December 3, 2010 10:07 PM

I'm not sold on the value of these business 'tax credits', or the historic tax credits, for that matter.

The fiscal conservative in me doesn't buy the idea that raising taxes by $10.1 million is worth having $57 million in (partial) additional wages on the books (unless those wages are taxed at 16%, which they certainly aren't in Rhode Island). It's easy to drop a huge chunk of loot in the economy and show impressive dollar figures for it, but the news never seems to investigate the return-on-investment of these programs.

I'm all for government doing what it's supposed to do, and there are cases where I think it should even do more (municipal composting, anyone?), but this is just tinkering in the realm of commerce, manipulating the landscape in favor of some businesses and people at the expense of those that have already found what works.

As for historic tax credits, I like the idea of keeping and retrofitting our most important historical buildings, but from what I've seen, the program gives developers money up-front with virtually no accountability for completing the projects.

I'm inclined to agree with Justin here, I think that if the film tax credit disappeared and was replaced with across-the-board tax relief, it would likely do more good; but in a way that's not quite as easy to package in a press release and add to the portfolio of achievements for the next election.

Posted by: mangeek at December 4, 2010 12:15 AM


What most all people did not understand is that unlike the film tax credit the historic tax credit was only given after the developer finished the project meaning it was a rebate of funds paid to the State of RI which the State of RI could have short term invested to gain interest while the project was ongoing. There was no real funds coming out of the state coffers as the tax credit funds were the developers monies that was paid up front to the state.

The $10.1 million was the total tax credit afforded the film industry in fiscal year 2009 or use the stated formula of $1 brings in $8 so the $10.1 million tax credit would equal $80.8 million spent in RI during 2009 not in 2008.

The reported $57.1 million was paid in wages only during 2008. Average daily cost is $225,000.00 minus wages a day for on-site filming. We don’t know how many days the film industry filmed in RI for the 12 movies and 9 TV shows during 2008 but it would have to be greater than the $57.1 million paid in wages and I’m willing to guess closer to $1 billion into State of RI economy from those 12 movies and 9 TV shows.

The film tax credit is doing what it suppose to do attracting the film industry to RI however there is no marketing and support once the film industry gets to RI. Besides if you look at the hotel, car rental and restaurant meal taxes it is $5 cheaper a day in my state based on those taxes alone!

RI has to get control of its tax structure.

Posted by: Ken at December 4, 2010 1:55 AM
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