Sanford, Harrell at odds over film tax-funded incentives

In a year-old squabble over tax-funded incentives for film productions that shoot in South Carolina, the plot has only begun to thicken.

The latest turn sent the state Film Commission packing last week from its longtime home within the state Commerce Department to the Department of Parks, Recreation and Tourism.

"The Department of Commerce was not using the incentives the way the Legislature intended for them to be used," said House Speaker Bobby Harrell, R-Charleston, who sponsored the legislation to switch departments.

The Legislature approved rebates on wages and supplies in 2005 to productions filming in South Carolina. But after the first year, Commerce concluded that movie companies were not hiring enough local labor or suppliers to justify the financial incentives.

In an effort to change that, the state last year reduced wage rebates for non-residents from 20 percent to 10 percent, with a $3,500 cap per job. It also mandated that production companies get a 30 percent rebate on supply costs only if they buy from South Carolina businesses.

Harrell's bill transferred the oversight of the film office, with the hope that PRT will restore the old rebates.

Gov. Mark Sanford last month vetoed the legislation but was overridden.

In his veto letter, Sanford called Harrell's legislation a "superficial change" that "does nothing to improve a program's performance for the taxpayers of the state."

Said Sanford spokesman Joel Sawyer: "In this case, the Speaker of the House appears to be more concerned with getting back at the Secretary of Commerce than making improvements to the film incentives law."

Sanford has cited a study by College of Charleston economist Frank Hefner that determined the state lost 81 cents in general revenue for every dollar invested in film incentives in 2006 and 2007.

Harrell instead pointed to a study by the University of South Carolina's Moore School of Business that found that every dollar in wage rebates generated $1.30 for the state during the same time. USC also concluded that every $1 in supply rebates generated $3.68.

Barbara D'Alessandro, unit production manager for "Army Wives," said the Lifetime series chose North Charleston largely because of the incentives. After learning about the changes, her crew had second thoughts about shooting the second season in South Carolina.

"All of a sudden we're looking at the program, saying, 'This isn't what we signed up for,' " she said.

The state later made an exception and reinstated the original rebates for "Army Wives," which is once again filming at the former Navy base.

Julian Adams, a Columbia-based producer, wasn't so lucky. He planned to film "The Last Full Measure" in South Carolina, a movie featuring Morgan Freeman and Bruce Willis about a fallen hero. But the rebate modifications cut out a quarter of the anticipated rebate money.

"I would like to do the movie at home," Adams said. "But to get the film made, the numbers have to work."

Harrell said he was concerned that the state was gaining a reputation for "bait and switch" tactics. He announced his intentions to restore the original incentives in March.

State Commerce Secretary Joe Taylor countered that of the 7,100 jobs created — at a cost of $8.4 million in wage rebates — only 146 jobs translated to full-time work for South Carolina residents.

"Unfortunately, the goals of film mutated from creating jobs for residents to simply attracting film productions regardless of the cost," Taylor wrote in a newspaper column earlier this year.

South Carolina lured seven movies and two television features at the start of the incentives program in 2006, after attracting only two movies the year before. Last year, the state attracted one movie and two television features. Whether that decline reflects the changes to the legislation is a matter of debate.

Long before film incentives, South Carolina captured plenty of high-budget productions. Both 1995 and 1996, for instance, saw seven movies and three TV features land in-state.

Harrell said incentives are crucial now because so many other states are offering them. He hopes PRT will increase rebates further for production companies that hire South Carolina residents.

Marion Edmonds, spokesman for the Department of Parks, Recreation and Tourism, called the move nothing more than "technical stuff" for now, housekeeping business that belies the turmoil afoot.

"All of our goals so far are to make sure they have offices to work in and closets for their stuff," he said.

Settled in at his new office at the tourism department, state Film Commissioner Jeff Monks knows little of what to anticipate.

"While we don't expect immediate changes, I'm sure there will be some changes in the future," he said.

Reach Allyson Bird at 937-5594 or abird@postandcourier.com.

Editor's note: Earlier versions of this story needed clarification with respect to how the film incentives are funded.