R.I. Film Office seeks tax credit study

(Corrected, Feb. 15)
The R.I. Film & Television Office won’t let the tax credit for film and television production in Rhode Island go without a fight.
Gov. Donald L. Carcieri has proposed saving about $1.9 million next fiscal year by eliminating the tax credit.
To counter the proposed cut, Steven Feinberg, director of the R.I. Film & Television Office, says his agency is working with an economist to provide a comprehensive study demonstrating the full economic impact of the film and TV tax credit. He declined to name of the economist with whom the agency is working.
In November, Feinberg undertook a mail survey seeking information on direct and indirect returns in order, he said at that time, to prepare what he labeled a “comprehensive study” of the total economic impact of the controversial credit. The goal was to produce evidence to remove a legislative cap on expenditures to make the tax credit more appealing to attract film companies to produce movies in Rhode Island. However, the mail survey did not produce the data that Feinberg hoped it would.
Now, with the entire tax credit on the budget chopping block, Feinberg said last week that the agency was “doing its homework, so we can tell the full story.” The results of the more complete study will be publicized, according to Feinberg. “We’re doing our due diligence.”
According to Feinberg, previous economic studies – such as one by the Poverty Institute at Rhode Island College, which found that state revenue in fiscal 2009 was reduced by $10.1 million as a result of the film tax credit – were incomplete. He says they did not take into account indirect benefits from ancillary businesses not directly involved in a film project – from flower purchases, to hotel rooms, lumber purchased at a local lumber yard to build sets and revenue from meal and beverages taxes.
For instance, Mark Brown, general manager at the Westin Providence, owned and operated by The Procaccianti Group, said that last year, film production in Rhode Island resulted in the booking of 1,000 rooms for two months. “A thousand rooms is a nice boost,” he said. In addition, it created great publicity for the hotel, because the film community tends to be very close-knit, Brown said. The guests, he continued, “were also regular patrons, using the spa, the restaurant, the meeting rooms,” generating more revenue.
The film and TV tax credit, Brown said, “is a good thing for everyone. The guests are here in Providence spending money at lots of other venues as well.”
If the tax credit is not renewed by the General Assembly, Feinberg predicted that it will create significant job losses.
“A lot of creative Rhode Islanders who are working in film, TV and radio production will flee the state,” he said. “People who are involved in computer animation and special effects are going to leave.”
Further, the potential training ground for students to work in the film industry will be gone for students at Brown University, Rhode Island School of Design, University of Rhode Island and Johnson & Wales University. “The fastest growing major at URI is film,” he said.
The Carcieri administration says eliminating the tax credit for film production represents a shift in priorities to reflect its new-found focus on earmarking money for tax credits and other initiatives that it claims are a more effective way to create jobs.
However critics say that the cut, coupled with a proposed $700,000 cut to the grants program at the Rhode Island State Council on the Arts, is short-sighted and amounts to an attack on the arts – and shows a lack of understanding about the critical role of economic engine that the arts play in Rhode Island.
“It’s a matter of seeing the tax credit as a long-term investment in our future, instead of a short-term, quick fix in a budget,” said Lisa Carnevale, executive director of Rhode Island Citizens for the Arts. •
An earlier version of this story gave an incorrect affiliation for Lisa Carnevale.