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Hollywood Handouts

Dwayne Johnson at a castle in Hong Kong Disneyland
Dwayne Johnson in 2009. Photo by Flickr user Stewart C.

Watching films and TV shows is one of my favorite things to do, and my adopted home state of Florida is my favorite place to do it.

I especially enjoy seeing scenes shot in familiar locales. There are many in glamourous locations like Miami Beach, but other productions take advantage of the blue waters in the Keys or the deep pine forests and moss-draped oaks in the northern part of the state.

Unfortunately, I won’t be seeing much of Florida in new releases anytime soon.

The Florida Entertainment Incentive Program, which was established in 2010, created a pool of $296 million in tax credits for film and TV productions that based at least 60 percent of their cast and crew in Florida. The program successfully attracted attention – so much attention that what was designed as a five-year plan ran out of money in three. Over 300 projects, including HBO’s “Ballers” and Netflix’s “Bloodline,” took advantage of both the incentives and the deep bench of experienced crew and support staff local to the region. As recently as 2006, Florida ranked behind only California and New York in the number of film productions in the state.

The Florida Legislature has not chosen to renew funding for the program, however. As one Florida film commissioner told The Hollywood Reporter, lawmakers in the state aren’t eager to give “Hollywood handouts,” banking on the state’s other advantages to continue to attract film and TV business.

The results are already becoming obvious. “Ballers” is relocating production to California, despite the fact that star Dwayne Johnson has expressed a desire to work near his Fort Lauderdale home as much as possible. “Bloodline” is wrapping its final season in March. Several high-profile films set entirely or partially in Florida, including Johnson’s upcoming “Baywatch” reboot, will film only a few days in the state, completing shooting elsewhere. Neighboring Georgia has been happy to pick up Florida’s lost business, to the tune of $650 million according to Michelle Hillery, president of Film Florida, a nonprofit industry association.

I have a personal interest in seeing the film and television industry thrive in Florida. One of my daughters works in television and her boyfriend is in film and TV as well. They live in Brooklyn right now, but I have been preparing myself for a possible future move if their careers take them to the West Coast or elsewhere. I would like nothing better than for “elsewhere” to be the Sunshine State.

But talent in their field is fleeing Florida, which is a shame, because generally speaking, the state’s tax and business climates are just as attractive as its sunshine and frost-challenged weather forecasts. Yet even filmmakers who might prefer to shoot in Florida face pushback from investors who don’t want to establish a project’s base location in a state that offers no incentives.

Barry Jenkins, the Oscar-nominated director of “Moonlight,” told the Miami Herald that he was glad he had stuck to his convictions and made his film in Miami despite the objections of his producers. But he also said that it was a trade-off, pointing out that “if we’d had those tax incentives, the movie could be even a little bit stronger aesthetically than it is.”

The Florida Legislature’s Office of Economic and Demographic Research conducted a study that found the state received just 43 cents back per dollar awarded in tax incentives, a nearly $170 million loss on the 2010 program. However, film industry advocates point out this figure only reflects money the government received back in the form of tax receipts, ignoring broader economic impacts on the communities where film and TV productions set up shop. The Florida Office of Film and Entertainment reported that the program added $4.1 billion to the gross state product and created more than 170,000 jobs.

The industry makes a valid point when it estimates that each dollar spent on production in the state likely returns much more to Floridians in the big picture – especially when you consider the incidental benefits to the state’s massive tourism industry. A 2015 study found that the first season of “Bloodline” alone created $95.4 million in combined production and tourist spending in the community where it filmed.

The problem is that not all Floridians, or even most of them, benefit from this increased spending. We don’t have a state income tax, so the salaries earned by everyone from stars to stylists do not directly contribute to the state treasury. And I have trouble justifying the idea of asking a landscaper in Lakeland or a dentist in Daytona Beach to subsidize film productions that, for the most part, happen far away from their towns.

The Florida Legislature has had four years to restore funding in the state’s now-defunct incentive program. If it hasn’t happened by now, chances are it won’t. So maybe a creative industry needs a creative solution.

Instead of offering an incentive program drawn from the state budget at large, the state could set up a program more specifically tailored to those Floridians who benefit most from local film and TV productions. The businesses and industries involved in such productions could contribute to a fund that would then provide a revenue stream for the offered incentives. This could be an industry-specific tax, but I think it might work even if it were a matter of voluntary participation.

In a voluntary system, participating caterers, carpenters, electricians, hotels and a variety of other Florida businesses could opt into contributing to the fund. Those who chose to participate would get first dibs on the production’s business, and film producers would get discounts on the participating services, making the businesses that participate more attractive. A Florida government agency could run such a program at a very low monetary cost.

Importantly, even if the program could not offer the same level of incentives the former program boasted, any incentives at all would get Florida over the hurdle of film producers who forbid projects to base their operations in a no-incentive state. Florida’s climate, tax as well as meteorological, might indeed attract filmmakers even without huge incentives, as long as those filmmakers can go back to investors and argue that the decision to shoot there will not prove too costly.

For now, however, I will resign myself to productions set in Miami but filmed in Georgia or, worse, California. Until our state can lure back producers, we Floridians will just have to suspend our disbelief.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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One Response to "Hollywood Handouts"

  • John Lux
    February 17, 2017 - 1:49 pm

    Dear Larry,
    Some great points in here, always nice to see people taking an interest in our industry. Would love to talk to you more about the challenges we’re facing. Shoot me an e-mail and we can set up some time to talk.

    John Lux
    Executive Director
    Film Florida