The Pennsylvania Independent Fiscal Office issued its revenue predictions for the remainder of this fiscal year and next year. The report stated that the revenue surplus of $230 million predicted in the Governor’s 2011/2012 budget will not be achieved. Further, they predict that there will be a revenue short fall of $520 million for next fiscal year. That means that the Governor and the General Assembly will have to cut state spending from current levels by $520 million or raise taxes to balance next year’s budget. I am optimistic that the film tax credit will not be cut, but my hope that it’s cap will be raised are fading. Poor sales tax receipts seem to be the problem. Let’s hope that revenue ticks up over the next several months.

Lobbyist Report
April 24, 2013
By Robin Ross

Last week the Joint Senate and House Democratic Policy Committee held a hearing on the Pennsylvania Film Tax Credit Program. All members of the Senate and House Democratic caucuses are members of these committees. Policy committees play no role in the legislative process. They serve as forums for policy discussions and fact finding.

The hearing on the Film Tax Credit was chaired by Senator Boscola and Representative Sturla. All of the organizations in the Pennsylvania film industry including PaFIA were represented. The witnesses testimony contained overwhelming evidence of the film tax credit programs success. They also made compelling arguments for lifting or abolishing the cap on the program. The members of the committee expressed strong support for the program and for raising the cap.

Once again, we are seeing growing support for the Film Tax Credit, which can now be characterized as bi-partisan. I believe that our chances of raising the cap for next year’s fiscal year are improving. The nagging problem continues to be reports of tax receipts, which are not meeting expectations. Because Pennsylvania’s Constitution requires the budget to be balanced, it will be a challenge to find funds in the revenue projections for the next fiscal year to raise the cap. I am attaching a link to a column that was written about the Policy Committee hearing by Pete DeCoursey for Capitolwire, which I believe captures the mood of the hearing.

OFF THE FLOOR: Film Tax Credit rescue too late to save Captain America, a Capitolwire Column By Peter L. DeCoursey, Bureau Chief

Today, the application process for film tax credits will re-open. The available credits between now and the end of the State’s fiscal year are detailed in the chart supplied to us by the Department of Community and Economic Development.

Over the last several months, PaFIA board members have visited with Deputy Secretary Newhouse, Appropriations Chairmen Adolph, Senate Majority Pileggi, and a number of members of the Senate and House as well as the Governor’s staff. The fact that the credit application process was closed last fall with over $101 million in film projects being unable to awarded because of the scarcity of credits was cited as evidence of the success of the credit program and its potential to drive job creation. I think there are several conclusions that can be drawn from all of these meetings. First, the film tax credit is no longer regarded with suspicion by members of the legislature as it was in 2009, when the original PaFIA members first started working in Harrisburg. Second, there is a consensus that the program works as a tool of economic of development. Finally, the issue now is not whether there should be a film tax credit program, but what size program the Commonwealth can afford. Raising the $60 million cap on the program appears to be directly related to the rate of revenue growth being realized by the Revenue Department. April results will be critical.

Senator Pileggi has started an interesting investigation. He has asked the Legislature’s Independent Financial Office to study and report the consequences to the Commonwealth’s revenue of an uncapped film tax credit program. Historically, everyone has focused on how much the credits “ cost “ the budget. This study is designed to find out how much revenue the credit program “earns” because of job creation and economic activity. If the Commonwealth is “making money” on the film tax credit program, why cap it? The results of this study are due in April and will be reported to PaFIA members when they are released. Please click here to read the Film Tax Credit Balance of 2/28/13.

Lobbyist Report
February 13, 2013
By Robin Ross

On February 5, Governor presented his proposed budget for the Commonwealth for the fiscal year 2013/2014. The film tax credit program was not mentioned in his speech to the General Assembly. Because he did not propose changing the current Program, he is deemed to be leaving the credit capped at $60 million.

Lobbyist Report
February 1, 2013
By Robin Ross

On September 11, Rep. Bill Adolph, Chairmen of the House Appropriations, came to Shooters for a tour and a discussion about the Pennsylvania film industry. I believe he was impressed by what he saw and heard because the following week he returned to Shooters with members of the Appropriations Committee. At Rep. Adolph’s request, I have been talking to Dave Donnelly, the Executive Director of the House Appropriations Committee about legislation for raising the credit cap.

On January 15th, Senate Majority Leader Pileggi, his Chief of Staff, David Woods, Deputy Secretary Carolyn Newhouse and Tom Rossomando from the Governor’s Action Team visited Shooters for a tour and discussion about the film industry and the credit program. The Senator expressed an interest to bring other Senators from the Southeast to Shooters. There was also a discussion of the consequences of removing the cap on the credit program. I believe he is interested in helping the film industry.

On December 19, I met with Deb Bowman and Janice Collier of the Film Office at the Department of Community and Economic Development. I was informed that the film industry meeting was postponed. Janice reported that 19 projects are being funded out of the fiscal year 2012/2013 $60 million credit pool. 8 projects (4 feature films and 4 television episodes) were already committed because they received funding in the previous year and the remaining balance coming from this year’s pool. 11 projects were approved after July 1st (1 documentary, 4 feature films and 6 television episodes). The film office has received applications for credits from proposed projects which have budgets totaling $101,730,842.00 None of these projects are being awarded credits because the pool is exhausted. No applications are being considered until April because of some recent controversies.  Click here to read the full lobbyist report.