With the film industry contributing an average of $70 million annually to the state economy, and growing, Maryland is one of the latest states to fall over itself to offer incentives to Hollywood.
In its last legislative session, they approved $6.875 million of its 2007 fiscal budget as incentive grants to lure producers to film in Maryland. It was an increase of over $3 million over the last fiscal year, but less than the proposed $8 million by Governor Robert L. Ehrlich.
Movies recently filmed in Maryland have included “The Visiting” with Nicole Kidman, “Step Up,” “Rocket Science,” “Syriana,” “Wedding Crashers” and “Triple X: State of the Union.”
What Maryland offers now is called an Employer Wage Rebate Program.
Under the program, production companies can claim a rebate of 50 percent of the first $25,000 in wages paid, per employee, while filming on location in Maryland. Employees earning $1 million or more are excluded, and rebates may not exceed $2 million per project. The rebate is distributed as a grant.
To qualify, productions must spend at least $500,000 in the state, and at least 50 percent of filming must take place in Maryland. In addition, the production must have nationwide distribution. The state also waives the 5 percent sales tax on items purchased for the films.
The question that still comes to mind for me when I read this is what is going to differentiate for the states when everybody offers incentives. It's not that far from becoming a reality where every state offers incentives and it will then be a commodity. Other than Hollywood, who wins?
It is my thought this is a concerted effort by production companies to bring down costs and have taxpayers flip the bill for it. All they have to do is shoot a movie that is based in a city, but use another city with current incentives in place, to get the one without it to create incentives to match it and create a frenzy of offers to bid down the costs. Evidently the strategy is working.
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