“The Third Coast”

When I graduated from the University of Wisconsin-Madison with a degree in Communication Arts (Radio, Television, and Film Production) in the winter of 2003, we were given one piece of simple and seemingly unwavering advice. If you wanted to get into filmmaking for real (“real” evidently meant working for one of the major studios), you would need to go to Los Angeles or New York.

The problem was, for all of the people who did want to go to one of the coasts, there were a bunch of us who wanted to stay in Wisconsin. And if you wanted to stay and work on films in Wisconsin, your primary source of information was the small but hard-working Wisconsin Film Office in Madison, where all the film projects in Wisconsin were coordinated, but after eighteen years of service, the office was closed in July 2005 due to state budget cuts.

But Wisconsin Arts Board Executive Director George Tzougros was determined to help Wisconsin develop its creative economy. He and a group of dedicated Wisconsin filmmakers who knew the impending fate of the film office formed the Film Wisconsin task force in April 2005 and began a statewide tour to listen to the voices of the state’s production community. One thing quickly became abundantly clear – growing a successful motion picture industry in Wisconsin could revive the state’s creative economy. The Film Wisconsin task force then led a campaign to negotiate some of the most aggressive tax incentives in the country.

In an effort to increase economic development many states are turning to the film industry as an untapped source of potential revenue. Once thought to be the sole domain of California and New York, the film production industry is an attractive way for states to make money. With the average cost to make and market a motion picture coming in at around $107 million dollars ($71 million in negative costs and $36 milling dollars in marketing), studios are eager to take advantage of any tax incentives offered by states. As a result, competition has heated up not only among states such as Wisconsin, North Carolina and New Mexico, but also with countries such as New Zealand, Ireland and Canada. Even New York and California, the usual hotbeds of film activity, are creating new film incentives to keep productions in their states. All told, 38 states offer incentives to film-makers.

Wisconsin has welcomed filmmakers and other production companies for over ninety years. From the film The Truant Soul being the first film shot in Wisconsin in 1916 to Mr. 3000, Rudy and most recently the shooting of Public Enemies, starring Johnny Depp and Christian Bale, in Oshkosh, the state is no stranger to large-scale film productions.

Wisconsin’s package of incentives went into effect in January and includes the following:

• An investment tax credit of 25 percent that can be claimed for investing in Wisconsin based productions.

• A comprehensive sales and use tax exemption for machinery, equipment and services used in production and post-production. No tax for all film and television services contracted by out of state production companies.

• A refundable 25 percent tax credit on direct production expenditures for feature films, television movies, episodic and mini-series television, video games and broadcast advertising production.

• A 15 percent state income tax credit for film, television and electronic game production businesses who make a capital investment by starting a business in Wisconsin.

• Further incentives, available on a city-by-city basis, include the use of state-owned buildings and locations free of charge as available, no fees for permits, a dedicated “traffic control” police unit during daylight hours at no cost and internal accounting reports on verification of incentive savings to the production company.

All told, the package makes Wisconsin one of the most competitive states for production tax incentives.

Not only are the incentives appealing to the production industry, but to Wisconsin’s tourism industry as well. At the March 2008 Wisconsin Governor’s Conference on Tourism in Lake Geneva, the Wisconsin Department of Tourism presented George Tzourgros, Scott Robbe, and Dave Fantle with the “Putting Wisconsin on the Map” award for their leadership in establishing Film Wisconsin. The award is designed to honor individuals or organizations that raise the state’s profile as a travel destination. The award was announced just days after Governor Jim Doyle announced that NBC Universal would spend $20 million shooting portions of Public Enemies in Oshkosh due largely to the tax incentives championed by Film Wisconsin.

What does the state get in return for the credits?

According to a 2005 report from the Wisconsin Department of Revenue, the loss of revenue as a result of credits given to a film or television production is indeterminate. An estimate in the report says that if a major production has $10 million in expenditures, wages of $50,000 for 100 employees, and 50 percent of expenditures subject to sales and use taxes, the loss of revenue would be approximately $4 million.

According to the Film Wisconsin website, roughly 50 percent of a production’s total budget is spent in the community in which it films. It also said Mr. 3000, filmed partly in Milwaukee in 2003, brought almost $20 million dollars to the local economy. In many cases, the gains to be had from these credits outweigh the losses.

“All these states want film projects to come,” said Chicago entertainment attorney Corky Kessler. “The State of New Mexico did a study that shows a benefit to the state of 10 times what it costs in rebates.”

In addition, elements of the film’s production become tourist draws, bring publicity, and put the location in the minds of movie-goers, hopefully leading to future visitors.

With these kind of credits for film and television productions, it’s hoped the state of Wisconsin could become “the third coast” – and Door County the “first Peninsula.” The state could only benefit from the extra revenue and marketing exposure – and personally, I wouldn’t mind seeing Johnny Depp out and about on the peninsula.