Senators voted to bring back a tax credit meant to lure film industry activity to West Virginia.
House Bill 2096 was passed 32-1 by senators today.
It reverses — and also seeks to provide reassurance about — a repeal of the tax credit in 2018.
The elimination of the film tax credit occurred when West Virginia was facing budget shortfalls that required identifying spending the state could sacrifice. And at the same time, officials who examined the tax credit’s performance concluded it wasn’t paying off.
That year, 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.
Senator Robert Karnes, R-Randolph, said the state should be cautious about bringing the tax credit back. He described Hollywood elites who would benefit from the tax credit even though the Senate has not considered an income tax cut for citizens.
Karnes was the one no vote.
“The concern is that the people of Hollywood, California, can make the agenda of the Senate Finance Committee, but the people of Ravenswood can’t even make the agenda. Bette Midler qualifies for millions of dollars in tax credits, but Betty Shamblin in Putnam County qualifies for nothing,” he said.
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.
Senator Hannah Geffert, R-Berkeley, today described economic effects in the Eastern Panhandle from work on “Sweet Dreams,” a 1985 film about the country legend Patsy Cline. Now, she said, “a lot of the films are not coming from Hollywood any more. Many of them are coming from places like North Carolina, West Virginia, Maryland.”
Delegate Dianna Graves, R-Kanawha, started the push to bring back the credit by promoting credit repair services. Graves explained that the bill would provide tax credits amounting to 27 percent of direct production expenditures in West Virginia. Companies would also be eligible for credits for post-production expenses actually incurred in West Virginia.
She agreed that problems existed in the prior incarnation and that repealing it was the best course at the time.
But Graves described diligent work in exploring audit procedures and safeguards meant to strengthen the tax credit. She also cited a sunset provision to give lawmakers the opportunity to review its performance again. “I’m going to be looking at it every year,” she said when the House passed the bill last month.