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Senators urged to support increase in film tax credits

For L. Bryan Koerber, president of Baltimore's Budeke's Paints & Decorating Inc., losing film projects like Netflix's "House of Cards" to another state would be devastating. Not fatal, perhaps, but devastating.

"The impact on us is huge," Koerber told the Senate Budget and Taxation Committee on Thursday in Annapolis, during a hearing on a proposal to authorize $18.5 million in tax credits during the coming fiscal year for movie and television production in Maryland. Supplying paint and paint supplies to both "House of Cards" and HBO's "Veep" for the past two years has enabled his company to purchase new equipment and preserve jobs, he said, as well as award his employees a wage increase for the first time since 2009.

"A production company may spend tens of thousands of dollars for paint, varnish, brushes, ladders and specialty products," he told the committee. "Projects like these keep our people working, our trucks on the road and product flowing into the marketplace."

Koerber was one of about 15 people to speak to the committee in favor of the bill, which would increase the authorization from the $11 million being considered by the House and keep it more in line with the $25 million approved for the current fiscal year. The money would be used to offer rebates to production companies that film in the state and use Maryland products and labor.

No one spoke in opposition to the proposal. Some 50 supporters crowded into the hearing room, most sporting stick-on tags that read "Film = MD Jobs."

Such credits and other incentives are common throughout the country, as states look to attract major film and TV projects and the money they can pump into local economies. Forty-two states offer some sort of incentive, according to information provided by Cast & Crew Entertainment Services, a provider of payroll services to the entertainment industry.

Film production in Maryland over the past two years, including "House of Cards," "Veep" and a handful of feature films, has had a $400 million impact on the state's economy, said E. Scott Johnson, chair of the Maryland Film Industry Coalition, an alliance of private- and public-sector groups and individuals that supports filming in the state. "House of Cards" alone, he noted, has contributed $286 million to the economy and purchased goods from more than 1,800 Maryland vendors through the two seasons it has filmed in the state.

"They are hiring thousands of workers and supporting thousands of small businesses," he said.

The makers of "House of Cards," which has filmed much of its first two seasons at sites in Harford County and Baltimore, including renting space in the Baltimore Sun building, have sent conflicting signals over its future in Maryland. In a February interview with The Sun, star and executive producer Kevin Spacey said that the series would be returning to the area to film its third season. However, a letter sent to state officials from Media Rights Capital, the Beverly Hills, Calif., company producing the show, said its was putting off work on the third season until it could be assured that sufficient tax credits would be approved.

"House of Cards" received $11.6 million in tax credits for its first season, and could receive up to $15 million for its second once all the paperwork is done (TV series can qualify for a rebate of up to 27 percent of eligible expenses). Supporters of the bill fear the $11 million proposed authorization for the coming fiscal year would not be enough to keep "House of Cards" filming in Maryland.

Committee Chair Edward J. Kasemeyer, a Howard County Democrat and the bill's sponsor, asked what would happen to Maryland's reputation within the film industry if the state drastically lowered the money available for tax credits and "House of Cards" moved to another state.

Nothing good, Johnson said. Such a move, he said, would suggest to other projects that "if you move your production to Maryland, you can't count on Maryland being there for you."

The committee did dodge a major bullet yesterday, however. The last person to sign up to speak on the bill had been Frank Underwood, the ruthless, murdering pol played by Spacey on "House of Cards." Fortunately for all concerned, he failed to appear before the committee when his name was called.

chris.kaltenbach@baltsun.com

 

 

 

Copyright © 2015, The Baltimore Sun
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