Alaska Film Tax Credit Draws Spirited Debate As Lawmakers Tackle Subsidies

With Alaska facing a multi-billion-dollar revenue shortfall, lawmakers are reexamining certain subsidies to see if they should remain on the books. The film tax credit program, which was vulnerable even in times of plenty, has gotten special attention.

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The state Senate voted to dismantle the program, even as other tax credits are being considered.

If the debate over repeal of the film tax credit happened on Alaska reality television, it might play out a little like this.

On one side, you have the Republican majority, who thinks killing the subsidy program is a no-brainer.

“You ready?” “Pull!” *gunshot*”

And then you have the Democratic minority fighting for the credit’s survival.

”What the *bleep*, Freddie! Don’t do this to me.”

Because the debate played out on the Alaska Senate floor instead of Sarah Palin’s Alaska or Deadliest Catch, the hour spent discussing the fate of the program was not as colorful.

The program was created in 2008, and has paid out nearly $50 million to documentaries, feature films, homegrown Alaska productions, and — yes — reality television. Sen. Bill Stoltze, a Chugiak Republican, sponsored the bill. While Stoltze has long been an opponent of the program, he presented his bill without glee and said he felt like an “undertaker.”

“It’s really just a bland fiscal issue,” Stoltze said.

Stoltze went on to say that because Alaska lacks a sales tax or a significant corporate income tax, describing the film payout as a “tax credit” is really a misnomer.

“This is not an industry that provides anything to our general fund of any substance,” he said.

Anchorage Democrat Johnny Ellis, an architect of the film credit, rose in its defense. He dismissed the fiscal argument, pointing out that the program is already in hiatus.

“The governor has suspended this program. The bill saves no state dollars,” Ellis said. “All it does is send a very negative message that Alaska is permanently closed to business, and damages the hopes, dreams, and businesses of thousands of our fellow Alaskans. That’s an unnecessary action to take.”

Ellis said the program helped diversify Alaska’s economy and created jobs in the state. He said without it, films and TV shows that could be shot in Alaska would instead go to Vancouver, Canada or soundstages in Louisiana, where tax credits remain in place.

“It’s not a stretch to remember Washington State — [Roslyn], Washington, — replacing Alaska on television in Northern Exposure,” Ellis said. “And a million dollars a week going into another economy, and Alaskans making fun over the water cooler of all the mistakes in that production.”

As Republicans fought against the film subsidy, Democrats also used the debate to make a point about tax credits they oppose.

Sen. Bill Wielechowski unsuccessfully introduced a series of amendments repealing tax credits for oil companies and one refinery.

“I heard some people bemoan the fact that I’ve done this before,” Wielechowski said. “They’re right. I have done this before. I’ve run an amendment that’s very similar to this before. I’m trying to raise attention to the fact that we’re paying out $431 million more in tax credits than we’re taking in.”

In an interview, Wielechowski also noted it’s ironic that the Senate was voting to dismantle the film credit program on the same day the Alaska House of Representatives was poised to create a tax credit that would benefit a defunct fertilizer plant in Nikiski.

“I think there’s something poetic about it,” he said. “Everyone has their favorite tax credits I guess.”

The bill passed 14-6. Sen. Lyman Hoffman, a Bethel Democrat who caucuses with the majority, joined the minority in opposition. The bill will now be considered by the house.