Happy New Year. I wish you all a happy, healthy and prosperous 2017.
The House and Senate started a new two-year session on Tuesday, January 3, swearing in all 203 House members and 25 Senators. The 2017/2018 session that lies ahead will have many challenges, most notably the same one that has plagued this Commonwealth in recent memory – the budget.
By the time the current fiscal year ends on June 30, many are predicting close to a $2 billion budget shortfall that will need to be addressed. What makes up the $2 billion? Annual carryforward pension costs, Medicaid spending and revenue expectations that were below projections, including the $100 million in revenue that was budgeted for internet gaming that was not approved.
So, what does that mean for Pennsylvanians, and more specifically the film industry? A few significant things. While the Governor has stated publicly that he will not seek a broad-based tax increase (i.e. income or sales), I am sure those options will be debated among legislators. An increase in either of those taxes is the only realistic opportunity to generate year over year revenue into the annual budget. One-time opportunities are limited, and many have already been exhausted, like liquor privatization. The direct and REAL challenge and concern will be budget cuts. And this year, ALL tax credit programs will be under the microscope – including the film tax credit. The possibility of the program being impacted is real and PaFIA membership will need to become more engaged and contact their local State Representatives and Senators. PaFIA's leadership is monitoring the situation and will develop a strategy to responsibly and effectively communicate to elected officials the importance of the film tax credit to the industry as well as the individual members and businesses.
First and foremost, Happy Holidays to everyone. Pour yourself a glass of holiday cheer and drink up before reading the following state budget update.
Good. Are you feeling warm and fuzzy? Things a little blurry? Well things are blurry in Harrisburg these days as well.
In approximately 45 days (on February 7), Governor Wolf will give his third budget address. And in a little more than 6 months (the June 30 budget deadline), the House and Senate will hopefully be debating and passing a balanced budget. Pennsylvania residents concerned about the state’s fiscal health probably would have preferred a lump of coal for their Christmas stockings rather than the troubling financial report handed down last Wednesday, December 14. According to the mid-fiscal year assessment by Budget Secretary Randy Albright, Commonwealth revenues will be at least $600 million short of paying for current budget year spending. The Legislature’s nonpartisan Independent Fiscal Office projects a $1.7 billion deficit for the 2017-18 fiscal year that begins July 1.
Part of the reason for the $600 million and $1.7 billion estimates is that the Legislature didn’t complete all of its funding work for the 2016-17 spending package, including controversial gambling expansion – which was earmarked to generate $100 million in revenue. Beyond not funding the budget completely, the Legislature plugged into the current budget overly optimistic incoming-revenue projections. According to Albright, the administration will be working to close the $600 million hole, with General Fund tax revenues being $129 million short of estimates for the month of November alone. Wolf has previously proposed tax hikes to right the commonwealth’s fiscal ship, while Republican lawmakers have remained strongly opposed. Without a turnaround in the state’s fiscal fortunes, a tax hike is looming, if not sooner than later – and the later it is, the bigger the increase could be.
And until a broad-based tax increase is given serious consideration, all tax credits in Pennsylvania – including the film tax credit – could potentially be cut or eliminated as a way to plug the budget hole.
PA Senate (31 Republican, 19 Dems PRIOR to election)
Incumbent Senator Teplitz was defeated by Republican challenger John DiSanto
Incumbent Democrat Senator Sean Wiley loses to Republican Dan Laughlin
Republican Wayne Langerholc defeats Democrat Ed Cernic (Former John Wozniak seat)
Republican Senator Tom Killion won a close race for re-election
Republican Mike Regan easily defeated John Bosha (former Pat Vance seat)
Republican Scott Martin defeated Greg Paulson (former Lloyd Smucker seat)
Democrat Sharif Street ran unopposed for open seat (former Shirley Kitchen seat)
31 Republican, 19 Dems PRIOR to election
Senate Rs gain 3 seats
New makeup: 34 Rs/16 Ds
PA House – upsets/close races
Incumbent Democrat Jarrett Gibbons lost to Republican Aaron Bernstine
Incumbent Tim Mahoney lost to Republican Matthew Dowling
Incumbent David Parker lost to Democrat Maureen Madden
Incumbent Democrat Leanne Kruger-Braneky narrowly defeated Republican Morrisette Rodgers
Incumbent Republican Dan Truitt beat challenger Carolyn Comitta by 80 votes
Incumbent Democrat Minority Whip Mike Hanna withstood serious challenge
House of Representatives - Open Seat Winners
Rep. Peter Daley (D-Washington) – Republican Donald Cook
Rep. Ted Harhai (D-Westmoreland) – Republican Justin Walsh
Rep. Nick Kotik (D-Allegheny) – Democrat Anita Astorino Kulik
Rep. Mauree Gingrich (R-Lebanon) – Republican Frank Ryan
Rep. John Payne (R-Dauphin) – Republican Tom Mehaffie
Rep. Sandra Major (R-Susquehanna) – Republican Jonathan Fritz
Rep. Mike Vereb (R-Montgomery) – Republican Michael Corr
Rep. Chris Ross (R-Chester) – Republican Eric Roe
Rep. Thaddeus Kirkland (D-Chester) – Democrat Brian Kirklan
Rep. Bill Adolph (R-Delaware) – Republican Alex Charlton
Rep. Julie Harhart (R-Northampton) – Republican Zachary Mako
Rep. Kevin Schreiber (D-York) – Democrat Carol Hill-Evans
Rep. Steve Santasiero (D – Montgomery) – Democrat Perry Warren
Rep. Mike Regan (R-Cumberland) – Republican Dawn Keefer
Rep Tonyelle Cook-Artis (D-Philadelphia) – Democrat Chris Rabb defeated Latry McDowell
Rep Mark Cohen (D-Philadelphia) – Democrat Jared Solomon
Rep. Dwight Evans (D-Philadelphia) – Democrat Isabella Fitzgerald
Previous makeup of House 119 Rs/84 Ds
Republicans gain 3 seats (4 went R, 1 went D)
New Makeup of House 122 Rs/81 Ds
It is important that all PAFIA members contact their State Senators and House Representatives to let those in Harrisburg know that we feel strongly about the film tax credit. To find your Legislator, please go to the following link: http://www.legis.state.pa.us/cfdocs/legis/home/findyourlegislator/
By: Lisa Budwig
The company description of TC Motion is “a motion communications content provider serving advertising agencies, broadcasters, and corporate communicators.” But their tagline, “Anywhere Pictures Move,” really does say it all… about the company and the man who runs it. For Max Zug, the love of film was and remains inspired by the technical magic of “frame plus frame equals motion.”
It was at Temple University Ambler on the first day of his college class, “Film – Light and Shadows,” that Max’s love of film manifested into a career choice. After graduation, the goal was to direct, but while all his college friends headed to NYC or L.A., Max returned to Berks County, dedicated to helping his family and determined to work in film in whatever ways he could find locally. From volunteering at BCTV where he ran a camera, to a small CBS affiliate where he learned to make low budget commercials, to WGALTV’s PM Magazine, where he was hired as a videographer, Max took advantage of every opportunity that came his way. At WGAL, he added editing and field producing to his resume and quickly rose to the position of senior producer, working on national stories.
Ever eager to learn, he moved on to Ford New Holland’s internal production company, and when that division went independent, as VMI Communications, Max negotiated an equity stake. During his time with VMI, he did what he says is perhaps the most important thing anyone pursuing this business can do – he “shot a lot of film” – more than 55,000 feet of film one summer. Eventually Max parlayed that ownership stake, along with his experience, knowledge, skills, and the strong relationships he’d built over the previous decade, into starting his own company, MaxFilms, which would become the premier regional film and commercial production house between Philadelphia and Pittsburgh.
By 2010, the economy, MaxFilms, and Max himself had gone through changes, and he was approached by former colleagues with an opportunity to run the business with full creative control, but without sole ownership responsibility, and TC Motion, the in-house video production division of TC Studios, was born.
TC Motion offers “script to screen” services for national advertisers and corporations, including Pergo, Armstrong, Chicco, Moen, and Sharp, among many others, with 90,000 feet of studio space and state of the art editing, motion graphics, and shooting capabilities. They employ dozens of talented, highly skilled people in the creation of what Max describes not as commercials, but “30-second films” and “marketing narratives.”
For Max, being an involved member of PaFIA just makes good sense for both TC Motion and the Lancaster County economy. As a local employer that collaborates with other local companies and uses local suppliers, he says PaFIA’s work to expand the film tax credits makes it a valuable partner in advocating for and building a vibrant film industry community, and that wouldbenefit all businesses.
Increased tax credits would allow for more film development and production in Central Pennsylvania and would provide meaningful creative work for hundreds of people, from actors to craftsmen to caterers right where they live. It would also bring added dollars to all the local support service businesses, like construction, hotels, food service, locations, transportation, and many others. For them, membership and involvement in PaFIA is an investment in the future of their businesses.
Finally, from a personal perspective, Max believes an essential benefit of PaFIA membership for anyone in the film industry is the opportunity to make and share connections and build relationships. After all, he wouldn’t be where he is today without those strong relationships of his past, his “big fat rolodex,” of skilled, talented, and supportive people who gave him opportunities and shared their expertise along the way…a rolodex that now includes those passionate new film lovers to whom he offers his expertise and mentorship to ensure the pictures keep moving.
By: John Rokosz
What are the advantages of keeping a competitive film tax credit in Pennsylvania? PaFIA is proud to share stories from the men and women of the PA film industry that earn their livelihood, raise their families, and contribute to our state’s economy—solely because of the PA film tax credit. Equally important however, yet easily overlooked, is the widespread benefit that the tax credit sets in motion across industry lines. Tague Lumber recognizes the outreach of that tax credit, especially as it relates to tradesmen industries such as electricians, carpenters, plumbers, and masons. As a result, Tague Lumber decided to forge a relationship with the Philadelphia chapter of PaFIA to support the cause.
James E. Tague and Co. opened in Philadelphia in 1908. Over the next 100 years, their business went from two horses and a second-hand lumber lorry to a diverse company extending outside the city limits, offering a range of services such as custom millwork, full metal welding and fabrication, master keying, jobsite deliveries, and door and hardware takeoff assistance. The newest additions to the Tague family of companies are the old Danby Lumber yard in Kennett Square and Doylestown Lumber, and they boast a signature fleet of red trucks that provide efficient delivery and exceptional customer service. That same day service and quick turnaround has put Tague Lumber in an excellent position to facilitate the time-sensitive needs of the film industry. For the past 10 years, they have been providing building materials such as lumber, plywood, and hardware for movie sets in Eastern PA, delivering the materials directly to the set, or to the construction site.
Kevin Potter, a purchasing manager at Tague, described his experience with PaFIA as a very positive one. They decided to become a PaFIA sponsor 5 years ago, after discussing the encouraging film business they were seeing with a contact in the rental car industry. Since then, Tague has been attending PaFIA events and building a network in the film community. As Kevin explained, “It’s been fun, and being a part of the PaFIA community puts us in the front when it’s time to hire contractors for film.”
When asked about the role of the PA film tax credit, Kevin didn’t hold back: “It’s critical for the health of our local economy. It also benefits many different types of businesses—not only our company, but so many other tradesmen in the state.” Kevin went on to say how pleased he is with the connection they’ve established with PaFIA, and the message they’re sending to Harrisburg about the film tax credit. “It’s a well-placed credit,” he said, “because it encourages revenue by empowering businesses, investment, and employment.”
PaFIA would like to thank Kevin, Katie Connor, and all the folks at Tague Lumber for their support over the past 5 years. We’re anxious to continue our relationship, mutually ensuring that the positive message to Harrisburg continues for years to come!
Please visit our friends at www.taguelumber.com for a better look at their services, which include architecture, building, design, delivery, installation, and renovation.
By: John Rokosz
Film production can be a daunting venture, with each project containing hundreds of moving parts. Equally overwhelming can be the navigation of the financial and tax requirements of any film project—large or small. To make this undertaking more manageable, Wipfli is a corporate member of PaFIA that provides CPA and consultant services to film projects in PA; helping them stay in compliance for the PA film tax credit, or assisting with their production accounting.
In 1930, Clarence J. Wipfli & Company was founded in Wausau, Wisconsin. Since that time, the firm has grown to include over 1,800 professionals in offices across the United States and India and currently ranks among the Top 19 accounting and consulting firms in the nation. Today, Wipfli provides individual and corporate accounting, tax and consulting services to clients throughout the US. For film in Pennsylvania, their firm provides attest work for PA Film Tax Credit compliance. They work with production companies that have received tax credit approval letters for projects and perform either agreed-upon procedures or audits, depending on the size of the credit.
Wipfli became involved with the PA film industry over six years ago, in response to one of their existing clients who had learned about the credit. Melissa Fisher, a Senior Manager at Wipfli, recalled the experience: “In those days, the state itself was performing audits and our client asked us to be present and help them out. Soon after, the same client had another large project that qualified for a credit, and the work grew from there.” Today, Wipfli receives most of their film industry business from the Greater Philadelphia Film Office, recommendations from the state, and other satisfied clients.
As this work started growing, Wipfli researched and talked with some of their existing clients, and made the decision that working with PaFIA was where they should be. Besides the obvious benefits of increased revenue and a larger network of clients, Wipfli had continued to learn about the film industry and had been making themselves available as needed. As Melissa puts it, “We have wanted to show our support for the industry and the work performed in Pennsylvania.”
Wipfli has become a powerful advocator for the cause of protecting and maintaining the film tax credit. Besides being a corporate member of PaFIA, they have worked with the state, explaining the requirements of the tax credit from an accounting standpoint, and have made recommendations for changes to benefit film producers of all sizes! “The PA Film Tax Credit has been beneficial to our clients, which is first and foremost our primary focus. We always want what is best for them,” Melissa concluded. “We have built our network of clients and as a result have increased our region’s revenue. What started for us as servicing our clients has grown to become an area that we continue to want to grow.” PaFIA would like to thank Wipli for their membership and support, and for making it easier for film producers to bring work to Pennsylvania!
Please visit our friends at www.wipfli.com for more information about their individual and corporate accounting services.
By: JaLia Moody
Recall the classic detective film Inspector Gadget? Well, that film landed Joe Huber’s auto company, Precision Body and Service Inc., a recurring role in the film industry. For 32 years, Precision Body and Service has served the Pittsburgh area to car owners, commercial truck drivers, and the film industry.
Ever wonder where those wrecked cars end up? Huber’s auto shop takes them and fixes them to be ready for production. From trailers to trucks to cars for a set, he paints, remodels, or fixes what is sent to him. From the day he graduated from high school, he transitioned to working in the auto industry. He taught himself how to do bodywork by age 17—18. He held a deep interest for car remodeling since he was young. PaFIA’s own David Haddad introduced him to another world of car remodeling – the film industry. Joe says the most memorable experience thus far from working in the auto industry is meeting David Haddad because he has brought him a lot of work. When asked to compare working with car and truck owners to the film industry, Joe answered that each are about the same. Neither is less nor more difficult.
Joe advises anyone looking to step in his shoes these words of wisdom: “You have to really go out and get it and you got to hustle for it.” He is saying that one must possess two things: urgency and desire. Just go for it!
By: Jalia Moody
“Keep after your dreams. They will come true if you keep following them.” These are the words of an industry professional who believes in paying it forward. Jeannee Josefczyk is a woman to admire. She was President of The Pittsburgh Film Workers for 10 years, and at the time of her presidency the organization hosted the Oscar party before the Pittsburgh Film Office. Jeannee was also one of the founders of the Pittsburgh Film Office and has been a board member of PaFIA since it was started. She currently sits on the board of Women in Film and The Valleywide Credit Union.
“Keep after your dreams” is more than idealism for this IATSE 798 makeup artist and journeyman who also was the Shop Stewart for makeup in the Pittsburgh region. Jeannee was nominated for the prestigious Georgie Award from IATSE 706 for Special effect makeup on theacclaimed HBO series, The Corner. What she enjoys most about being a makeup artist is that no day is the same. One day you are creating a beautiful and mysterious woman and the next you are working with The President of the United States or making a drug addict come alive before your eyes.
The Pennsylvania Film Production Tax Credit Program is very relevant to Jeannee’s business. It keeps her from going out of state to work and has helped her to put three children through college. She expresses that “we must let our politicians and governor know how important it is to open up the tax credit to 100 million instead of 60 million. Once the tax credit is expanded, more films and different projects will come to Pennsylvania so the state can benefit from it causing a trickle down economy and benefit all.” Jeannee fights so diligently and serves organizations such as PaFIA so that the future film workers can get a tangible full time career in this industry. As she voices, “This business is one of feast or famine at first, but keep your chin up and work hard to persevere.” Jeannee’s life story is the best example of dreams crystallizing in a sure thing.
By: JaLia Moody
“Take a stand.” No matter which side is the universal message of the two-time award winning film, Voiceless, written and directed by Pat Necerato. Voiceless won Best Feature Film from two secular film festivals. The film is about a young man who comes to Philadelphia as a Christian activist leader to start a community outreach program through a church. He actively stands against abortion and the abortion clinic placed across the street from his church. Pro-choice viewers in the film festival audience gave accolades because the film handled the matter so delicately. Many people in the audience—whether pro choice or pro life—addressed the film as not being sermonizing.
The filmmaker, Necerato, started out as a Christian activist who met with legislators when hearings took place to petition laws that he was for or against to present the biblical perspective. He would frequent the abortion clinics, state legislators, and any place in New Jersey where social issues were being presented that called for a biblical response. The filmmaker simply utilized his first amendment rights to present his beliefs to the public. Voiceless is a culmination of his first two previous documentaries: Go Stand Speak: The Forgotten Power of the Public Proclamation of the Gospel and Street Preacher: A Day in the Life. The genesis of the story emerged from his own personal experiences from dealing with the church and people. Voiceless is not based on a true story, but it is fair to say that the film in an extension of Necerato’s ideological views and life experiences. Necerato wants the film to inspire viewers to take a stand for what they believe.
Voiceless was filmed in Philadelphia. Necerato is from what he calls the “Jersey side” of Philly. He grew up in South Jersey, Trenton, Palmyra, and Washington Township. The filmmaker chose to have the 26-day shoot take place in Philadelphia because he believed it was a natural place to film. He loves Philadelphia’s architecture, artistic texture, grittiness, and the street value of downtown Philly that brings a level of art. He chose to place the lead character in the Kensington or Frankfort area to represent the “Rocky-fighting metaphor.” There is an artistic rawness that Philadelphia possesses. Necerato made sure to show a cinematic rawness distinctly through the cinematography of his film. Originally, he wanted to shoot the film in black and white but distribution convinced him otherwise. Necerato worked 8-10 hours or more for three weeks coloring the film in his North Carolina post house. He’s grateful for the amount of work that McGuire from C3 Studios and his DOP, Joe Hennigan, put in to produce a film that is cinematically gritty.
With seven years under his belt as a filmmaker, Necerato has useful advice for first-time filmmakers. When it comes to choosing the city and state for your film, choose a location that is tax credit friendly, work with your producer and accountant with the tax credit, choose shooting locations that are in close proximity to each other to help save money, and choose a location that has good filmmakers and actors to bring in locally. For funding, he suggests there are two ways: fund it yourself or ask other people to fund it for you. He recommends to write and to direct the first film that you are acquiring funding for because you will be able to dictate what the story is about. He adds to read as many books and to watch as many films like the ones you are trying to make. Finally, surround yourself with people who are good at what they do. Whatever film one makes or watches, don’t forget to “take a stand.” Voiceless will be released in the fall of 2016.
Pennsylvania Film Industry Association (PAFIA)461 Cochran Road, Box 246Pittsburgh, PA 15228(717) 833-4561 email@example.com