At one point, Hamilton actually lost production of the movie “Tiger” to another filming site, and the director of Film Hamilton is worried about losing more projects despite the city’s successful run of luring now four films to tape here.
In between the time Southwest Ohio was scouted for places to film the boxing flick and when filming started last week, “Tiger” crews had actually packed their bags and were looking for places in other states to make the movie starring Mickey Rourke and Prem Singh, said Steve Colwell, director of Film Hamilton, which helps producers find locations, workers and vendors.
And it wasn’t because they didn’t like Hamilton, Colwell said.
It’s because filmmakers now wanting to do a movie in Ohio and claim tax incentives for production costs will have to go on a waiting list.
Ohio has already committed all $20 million available for tax credits this budget year, which began July 1, to movie, television, commercial and other crews that have sought incentives to film in the state, according to Ohio Development Services Agency, the state department that runs the tax program.
“That’s a huge black cloud hanging over our heads going forward,” Colwell said. “If Ohio wants to remain competitive and be taken seriously in the industry, something’s got to change.”
This is the fastest Ohio has run out of money in a given year, said Karri O’Reilly, an independent producer and board member of FilmDayton who was production manager for “Carol.” The 1950s-era romance featuring actresses Cate Blanchett and Rooney Mara filmed last year at locations in Cincinnati, Hamilton and Lebanon.
O’Reilly lobbied lawmakers to allocate more money before the new state government budget went in effect July 1 and even though the funding level didn’t increase, she thinks the structure of Ohio’s tax incentive program is better than other states that have unlimited caps.
This is a good problem to have, O’Reilly said. It demonstrates the tax credit program is doing its job — attracting Hollywood to Ohio, generating a return for residents in the form of extra dollars at the cash register of local businesses and creating jobs for Ohioans, she said.
“It’s a positive experience to make movies in Ohio and the word is out,” she said.
But it’s not the best time to have the problem. With the pending release of “Carol” and other movies made in Ohio due for national and international stages, the state is generating a buzz to attract more movie makers, she said. But for those that come knocking on Ohio’s doors before next July, the state won’t have cash to invest again until the new fiscal year begins unless crews are willing to add their name to the waiting list, she said.
Depending on when actors’ and directors’ schedules align and finances line up, some projects can wait and others can’t including one she’s working on south of the Ohio River in Kentucky due partly to the issue.
“When “Carol” comes out and people see what Cincinnati looks like and how great the crew is… then we’re really going to be on fire,” O’Reilly said. “We will lose work because of not having money.”
Because companies apply for tax credits before filming starts, it’s common for projects to be canceled even after getting state financial approval, thus freeing up a new spot in the queue for the next filmmaker to claim their share of savings, said Lyn Tolan, spokeswoman for the development department.
“Right now, the tax credits for this year are committed but that changes throughout the course of the year,” Tolan said. “Projects drop out … it is not unusual.”
Currently, 13 projects are approved this year for tax credits, and another six approvals have already been rescinded due to cancellations less than four months into the new government year, according to state records.
However, Colwell and others are concerned the lack of funding will scare films away that don’t have the flexibility to wait for money to be freed up.
Due to another project that backed out of Ohio and the state acting quickly to let producers know about the change, the makers of “Tiger” came back this time, Colwell said.
“They were going to shoot these dates no matter where it was,” Colwell said.
Ohio’s Motion Picture Tax Incentive was passed by state law in 2009 and sets aside a certain amount of taxpayer funds each year to pay rebates for making productions statewide. Documentaries, feature films, commercials, interactive websites, video games and other film types are all eligible to apply as long as at least $300,000 is spent in the state, according to development services.
In exchange for bringing the work to Ohio, a qualified project is eligible to receive a refundable tax credit equal to 25 percent off costs spent in Ohio and non-resident wages, plus another 35 percent on wages paid to Ohio residents. If the refund exceeds the amount owed for taxes, the company gets the difference in cash to cover costs such as lodging. Each project is limited to receiving no more than $5 million, according to state officials.
Before the state writes a check, the project must be completed and financial statements must be audited to verify the spending met requirements.
The way the process works means applicants estimate how much money they will spend in Ohio and thus what the tax credits are worth upfront; but they don’t actually receive the money until the work is done, Tolan said. During the months it takes to complete the work, tax incentives can’t be awarded to another crew wanting to come to Ohio unless a project is called off.
It’s still too early to tell whether more funding is needed in the future or not, Tolan said. Prior years have never spent the full $20 million allocation, and the books are still being looked over for last year, meaning the state has not finished its reviews nor paid all the awards for last year’s projects, Tolan said.
“Our best indicator is to go year to year and know where we are and it’s just too early,” she said.
Ohio has budgeted a total $40 million for the motion picture tax credit for each biennium budget since fiscal year 2010, she said.
To date, the Buckeye State has awarded over $54 million worth of tax credits and cash to about 61 production companies that have completed projects including “Captain America” in Cleveland, “Ides of March” in Oxford and “The Blunderer” in Cincinnati, according to development services. That figure does not including more films in the works and still due a payout such as “Funhouse Massacre” that filmed earlier this year at Land of Illusion in Madison Twp., with almost 100 films approved for credits altogether since the program started.
After “Tiger” was bumped up for approval, nothing else sits on the waiting list at the moment although any new applications will be added to the wait list if a company decides to still apply, she said.