Veto puts filmmaker tax credit on hold

A tax credit to filmmakers who shoot in Ohio would cost the state about $47 million a year, officials say.

CLEVELAND (AP) — In Hollywood terms, an ill-fated bill to offer financial incentives to filmmakers working in Ohio has an unresolved script and is awaiting a sequel.

And the cast for the next shoot will have a different look, as Democrats take control of the Ohio House in January.

That should strengthen Democratic Gov. Ted Strickland’s hand in a political feud over a Republican-passed measure that Strickland said warranted a veto.

The measure would have provided a 25 percent transferable tax credit to movie makers who work in Ohio.

Republicans believe the governor’s decision to veto the bill jeopardizes Ohio’s competitive stance and, in particular, Cleveland’s attempt to attract filmmakers.

But Strickland says the credit would wind up costing Ohio tax revenue and should be considered in the context of state government’s bleak budget outlook.

“While Ohio is a great place to make a movie, we don’t believe it would be a good use of tax dollars to create a massive new tax giveaway for wealthy investors,” according to an administration position paper cited by Strickland spokesman Keith Dailey.

The tax credit has been a key goal of leaders in Cleveland, which hopes to add to the city’s film credits with a deal to convert unused areas of its convention center into a year-round movie-making set.

“The Deer Hunter,” “Spider-Man 3” and “A Christmas Story” are among those movies filmed in Cleveland.

Delays in getting a film tax credit could jeopardize Cleveland’s chance to become the shooting location of the “Torso” movie, about a Cleveland serial killer, according to the Greater Cleveland Film Commission.

It could also hurt the proposed convention-center deal with New York-based Nehst Studios.

“As far as getting full production to come to Ohio, not just Cleveland, without a tax incentive, it’s just not going to happen,” said Ivan Schwarz, the Cleveland film commission’s executive director.

Linking the credit to the state budget would doom the “Torso” and convention-center deals because the budget likely wouldn’t be completed until mid-2009 and backers won’t wait, said state Sen. Thomas Patton, a Republican from Strongsville near Cleveland.

The Ohio Department of Taxation estimates the bill would cost the state about $58 million in tax credits each year, with the state getting back 18 cents on the dollar for a net loss of about $47 million per year.

With the state facing a potential $7 billion hole over the next two budget years, the department opposes such credits.