As Budgets Shrink, State Eyes Cuts to Film Incentives

For the last seven years, Alaska’s offered financial incentives to draw filmmakers and TV crews to the state. But as lawmakers scramble to fill a widening gap in the budget, Alaska’s film tax credit program is on the chopping block.

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Governor Bill Walker has proposed eliminating three positions from the Alaska Film Office. Without auditors and accountants to help review information from production companies, the program would essentially go on hiatus.

It’s currently set to expire in 2018. Until then, the Film Office has permission to give out up to $200 million worth of tax vouchers to producers who spend enough on local labor and other expenses. Their credits can be sold to other companies looking to reduce their state tax bill.

AlaskaFilmCreditLogoSo far, about 10 percent of the credits have been handed out. But rather than leave the door open on the rest, Senator Bill Stoltze of Chugiak has introduced a bill to cut the incentive program altogether.

In testimony to the Senate Labor and Commerce Committee, Stoltze said the state can’t afford to do otherwise.

“It’s not like there’s $170 [million] or $180 million just sitting there,” Stoltze said. “[But] it’s further exposure to our treasury as tax credits and subsidies are approved. I don’t think it’s sustainable.”

This isn’t the first time Stoltze has made that argument — or attempted to repeal the tax credits. Despite recent changes, Stoltze and other lawmakers have still questioned whether the program creates jobs for Alaskan crew members.

According to the Film Office, about 90 residents worked on shows or films that qualified for incentives last year. By comparison, those productions had 60 employees come from out of state. It’s not clear how many hours they worked or how long their jobs lasted.

Stoltze said that film production has clear financial rewards for Alaska’s service industry, like hotels and caterers.

“There are Alaskans that have participated and benefited,” he said. “But it’s up to you as policymakers to determine whether this is the most appropriate way to spend scarce resources.”

The Labor and Commerce Committee will be taking public testimony on the bill on Feb. 24.