“It’s business. [The production company] is trying to get the most they can get for their company and to make it productive for them to be here and advantageous so I can’t say I blame them,” said state Senator Nancy Jacobs, R-Cecil/Hartford.
The Netflix thriller, House of Cards, has yet to start its third season. However, Frank Underwood, played by actor Kevin Spacey, looks to pull some of his usual tactics to shmooze the Maryland State Legislature. He wants the state of Maryland to extend tax credits, from $11 million to $18.5 million, for production companies that film in the state. Because of the tax credits, the House of Cards producers have filmed the show primarily in Baltimore and in Annapolis: surprisingly, not in Washington, DC, where the show takes place on-screen.
To date, Maryland has reimbursed the company for a chunk of its production expenses after each season it has filmed in the state. The show got $11 million in tax credits after the first season, and it will receive nearly $15 million for this season’s production.
The show’s production company, Media Rights Capital, now threatens to move filming from Maryland to elsewhere outside the state. Letters from the production company to state officials stated “give us millions more dollars in tax credits, or we will break down our stage, sets and offices and set up in another state.”
States offer business tax credits, like those to film production companies, to help raise more revenue for themselves. For example, Captain America just opened in movie theaters across the country. Though most of the movie filmed appeared to be in Washington, DC, the producers filmed most if it in Cleveland, Ohio. The state has a hefty tax incentive program for film producers; it offers up to a 35 percent credit for productions that film there.
The indirect impact of film productions can be large since people who work on movies or TV shows will spend money at grocery stores, restaurants, and other places in the state where they film, a Louisiana study noted.
Unlike in the series, Mr. Underwood’s current wheelin’ and dealin’ did not prove to be fruitful this time. With only fifteen minutes left in the 2014 legislating session, the Maryland State House chose to give only $15 million in incentives to film production companies to film in the state, $3.5 million short of what House of Cards asked the state to pass.
In recent years, Maryland has given close to $40 million to TV and movie producers who film in the state; most of this money has gone toward House of Cards filming each year. However, legislatures now ask where they draw the line on giving away more tax revenue each year for these credits.
“This just keeps getting bigger and bigger” Del. Eric G. Luedtke (D-Montgomery), who until now has supported film tax credits, said at a hearing on the issue last Friday. “And my question is: When does it stop?”
On the other hand, Senator Roger Manno asked his colleagues: “Why mess with a program that is blowing the doors off every economic indicator?” He seems to have borrowed that talking point from Kevin Spacey (plays Underwood), who visited an Annapolis wine bar in March to whip votes for the larger tax credit.
State officials, like Senator Manno, have noted that the show has created over 6000 jobs, and that it has brought in over $250 million into the state economy.
As Frank Underwood once put it: “Power is a lot like real estate. It’s all about location, location, location.” Will Frank and Media Rights Capital push their agenda further and move out of Maryland? The State has made its move, and now it is Frank and company’s turn to move their chess pieces again.
What do you think the state of Maryland should have done?
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