CHARLESTON, W.Va. — After debate lasting almost two hours — and after mentioning almost every film or television show that ever had a West Virginia connection — delegates voted to discontinue the state film tax credit.
“This is our first fiscally-impactive bill for the budget. If we go at this pace, we’ll be here until July 1,” Finance Chairman Eric Nelson, R-Kanawha, said in his closing remarks on the bill.
The bill passed the House of Delegates 54-42 early Friday afternoon. It had already passed the Senate earlier in the week.
This was actually the second day in a row for delegates to debate film tax credits while the bill was on a passage vote. After a lengthy and vigorous discussion on Thursday, House leaders proposed laying over the bill for a final vote today.
Republicans described the $5 million annual cap on film tax credits as being an important building block in the state budget that could now be used for other priorities.
They also said the tax credit has not delivered enough bang for the buck.
Democrats contended the film tax credit could be improved, that it has had a positive economic stimulus effect and that its results have a positive effect on the branding of the state.
“We struggle attracting people to our state. We struggle with money all the time,” said Delegate Shawn Fluharty, D-Ohio.
“It blows my mind that we’re getting rid of something that we know provides a net gain. I just don’t understand the philosophy.”
Fluharty concluded, “I do know that if we were nominated for an Oscar here, it would be for best comedic performance.”
Delegate Larry Rowe, D-Kanawha, urged his fellow lawmakers to not just focus on numbers but to consider broader values.
“I think it’s a statement that we have a commitment to the arts in West Virginia; we have a commitment to film making,” Rowe said.
Republicans said the state has to manage its money wisely. They said the tax credits have not done enough to stir film or economic activity.
“If you applied that $5 million in some other realm of state government, that would return probably more in economic benefit to the state as opposed to this,” said Majority Leader Daryl Cowles, R-Morgan, referring to the annual cap.
The West Virginia Film Industry Investment Act was established in 2007 to encourage economic development through motion picture and other commercial film and audio projects.
The act allows eligible film production companies to receive nonrefundable tax credits for direct and postproduction expenditures made in West Virginia or incurred with a West Virginia vendor. The credits also may be transferrable.
The House took up and rejected a similar bill last year to eliminate the film tax credit.The Legislature did eliminate the Film Tax Office, folding in its responsibilities with the Division of Tourism.
State Tourism Director Chelsea Ruby has spoken before several committees this year, describing acceptance of doing away with the credit. She has described it as a “race to the bottom,” saying such credits are only paying off with states like Georgia that are willing to put forth significant resources.
Ruby has said the state can pursue other ways to promote the film industry in West Virginia, as opportunities present themselves.
During last month’s interim meetings, the Legislative Auditor’s staff recommended doing away with the credits. “The film tax credit has produced minimal economic benefit to West Virginia,” the Legislative Auditor’s report concluded.
The economic impact of the film tax credit program has been about $8.6 million over its 10-year existence, or less than $1 million annually on average, auditors wrote.
Furthermore, auditors wrote, right now West Virginia lacks a strong incentive program, a skilled workforce, and the infrastructure needed to attract large film productions.
MORE: Read the report about the West Virginia film tax credit.
House Minority Leader Tim Miley, D-Harrison, in remarks on the floor today suggested tweaking, narrowing and modifying the film tax credit.
“I don’t understand why we wouldn’t want to continue to attract people into our state if we’re still getting a positive return on investment,” he said.