Today the Legislature passed a budget that included major changes to the tax credit program. Governor Rell has made it clear that she will veto the budget and these modifications. This means that we still have time to convince Lawmakers not to make some of the proposed changes.
Given the current budget deficit, some changes to the program were expected, and there has been an ongoing dialogue with members of the legislature about tweaks that would make the program more efficient without compromising the growth of the industry. Compared to the efforts of some to completely eliminate the program, we have done well in keeping the credit largely intact – BUT WE MUST ADDRESS TWO MAJOR CONCERNS.
A few of the changes proposed have the potential to be devastating, particular to independent and smaller budgeted productions. We must fight hard and send the message that these changes will hamper growth without providing the state with the intended efficiency gains.
Most alarming to members of Connecticut’s burgeoning entertainment industry is the increase in the minimum spend requirement from $50,000 to $1 million. Many in-state production companies have thrived under the current program, ramping up production considerably with the help of the credits. A $1 million minimum spend would seriously hamper our efforts to grow this industry.
Another alarming change is a requirement that BOTH 50% of production AND 50% of post-production must be done in-state. This requirement would make it nearly impossible for the larger motion pictures to be produced in CT, while also halting growth of post facilities that have expanded here in CT over the past few years. We have recommended that the language read 50% of production OR 50% of post-production.
CPC representatives have been in contact with members of the legislature and the Governor's office in an effort to get these changes reversed and there does appear to be some movement to this end. Following is a breakdown of some of the changes in the current legislative bill being presented to the Governor:
1. Moves administration of the incentive program from the Commission on Culture and Tourism (CCT) to the Department of Economic and Community Development (DECD).
2. Moves the date from Jan 1, 2012 to Jan. 1, 2010 for the requirement that only in-state expenditures qualify for the credit. This requirement will spur the growth of more infrastructure and assure that the state is getting the benefit of these expenditures.
3. Raises minimum spend eligibility for tax credit from $50,000 to $1 million.
4. Requires company conduct at least 50% of principal photography and 50% of postproduction within the state.
5. Makes the infrastructure tax credit a flat 20 percent and increases the minimum qualifying expenditure to $5 million.
Again, CPC has been in ongoing talks with members of the legislature. They do seem to be listening and want to make sure that they get this right. PLEASE SHARE YOUR THOUGHTS WITH US. We will compile comments and deliver them to key legislators - and PLEASE contact members of the legislature directly with your concerns. Thank you.