The debacle regarding film tax credits at the recent legislative session could potentially cause Maryland to lose one of the finest TV programs around today, and all because of misunderstanding of an industry and reliance on failed history.
"House of Cards," the Netflix series starring Kevin Spacey, has been filmed in Maryland for each of its first two seasons, mostly in Baltimore City and Harford County. But a failed negotiation between the House and Senate this legislative session left the show in limbo when $3.5 million in tax incentives were left out of a final bill subsidizing the film industry.
States across the country provide massive tax credits to film companies, hoping it will encourage them to shoot there — in a more realistic environment than a set built in Los Angeles — and to bring their film crews, as well as to hire locally. And since a film crew shoots for months at a time, they often move here. Even Kevin Spacey has a home here, according to Gerard E. Evans, an Annapolis-based lobbyist for Netflix. Mr. Spacey "loves Maryland, he's got a house here," Mr. Evans told The Washington Post.
This helps grow the tax base and supports local businesses as well, and it should be a no brainer for legislators to want to fund. In fact the economic impact for "House of Cards" according to the Department of Business and Economic Development has been $138 million for fiscal year 2012, with 2,200 Marylanders hired for the show, including extras, caterers, drivers and others. In addition, the critical success of the show — it was nominated for last year's Best Drama at the Emmy Awards, among other accolades — has led to increased interest in Maryland from its being spotlighted in the show, including recognizable locales in Baltimore and Annapolis (including the House of Delegates chamber).
The breakdown in the bill came after Montgomery County Del. Bill Frick inexplicably proposed — and the House inexplicably passed — an amendment to the House version of the bill allowing the legislature to seize "House of Cards" production assets through use of eminent domain if it took tax credits and then left the state.
Mr. Frick's amendment was similar to the same failed tactic that finally triggered Colts owner Robert Irsay's move the of team out of Maryland in the middle of the night in 1984. When the Senate passed a similar eminent domain bill, Irsay's lawyer, Michael Chernoff, compared the move to putting a "gun to his head." Though Irsay had been shopping the team for months before, this was clearly the last straw.
The Senate got the House to drop the eminent domain provision, but House negotiators insisted on another odious condition that would have allowed the state to take back tax credits pledged to a production that eventually leaves the state. As a result, support for "House of Cards" came up $3.5 million short when the legislature adjourned.
With $15 million in tax incentives approved now, "Cards" still has some strong legislative support, but it may not be enough. The entire tax credit for HBO's "Veep" was only $3.4 million in its first season, so the $3.5 million difference in the allotment "Cards" was seeking could be decisive.
Maryland House legislators should have looked back at history before passing Mr. Frick's awful amendment or insisting on the clawback provision. Or they could have simply turned on ESPN. A film production is, after all, like a free agent looking for a team to play on. The free agent may deliver a lot fans, jersey sales and interest in a team, but he needs to be compensated appropriately to sign a deal — even if it is just a matter of a team re-signing its own free agent.
The Senate understood that $138 million in economic impact was worth paying the right price. Mr. Frick and the House did not. They may be looking at an empty stadium next season with only themselves to blame for it.
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