Are shows such as 'Army Wives' worth incentives?

COLUMBIA -- Catherine Bell, one of the stars of the hit cable television drama "Army Wives," stood at the end of a table in the Senate antechamber, scribbling autographs on glossy photos of herself as senators patiently waited.

Minutes later, as Bell moved to the Statehouse lobby, a senator exited the chamber after hearing that she was autographing photos for legislators.

"Where is that movie star?" he said to no one in particular.

While legislators fawned over the actress, she was sending Tweets to her fans, imploring them to contact state lawmakers and preserve state film incentives.

She had a self interest to do so. From 2006 to 2009, according to documents obtained by The Greenville News, Bell's show has received more than $15 million in cash rebates from the state, incentives designed to lure television and movie productions to South Carolina.

"It's going for a wonderful cause," said Sen. Yancey McGill, a Williamsburg County Democrat who heads a subcommittee responsible for funding the state's Film Commission. "It's a money maker for the state."

But not for the General Fund, the pot of tax money used to pay most of the incentives. The fund receives 19 cents for every dollar spent on the rebates, according to a College of Charleston economist.

Supporters say the state's economy benefits more. The producers for "Army Wives" spent $63.6 million in South Carolina during the same period the state issued the company $15,244,972 in rebates, according to the state Department of Parks, Recreation and Tourism. The show is filmed in the Charleston area.

That doesn't persuade Sen. Chip Campsen, a Charleston Republican who is skeptical about state economic incentives in general.

"I'm not sure you have to subsidize Hollywood," he said. "Generally, you don't have to bribe people to move to paradise."

The argument is being heard in capitols throughout the nation as lawmakers are faced with tough budget choices as a result of a recession that has produced staggering unemployment and drastically reduced state revenues.

South Carolina's budget has been cut by $2 billion over the past three years, and legislators are now contemplating a spending plan that could result in teacher layoffs and severe cuts to state health programs ranging from HIV to cancer screening.

Legislative champions of the film incentives say the rebates are worth the cost because they result in more filled hotel rooms, produce jobs and leave the state's economy with more money.

"It's important to remember in difficult economic times that films bring an immediate cash and employment infusion to the state," said Marion Edmonds, a spokesman for the tourism agency.

"Army Wives" is one of 12 feature films, two pilots and one series that have received incentives from the state since the current program began in 2005, he said.

Altogether, taxpayers have spent $32 million on cash rebates for film producers since 2006. Almost half of that has gone to "Army Wives," now in its fourth season and the most-watched drama in the history of the Lifetime cable channel.

ABC Studios produces the series for Lifetime Television. ABC and Lifetime are affiliated with the Walt Disney Co., which reported net income of $953 million for its February-through-April quarter and $3.3 billion for its last fiscal year, which ended in November.

ABC is a Disney subsidiary, while A&E Television Networks, of which Lifetime is a subsidiary, is a joint venture of the Disney-ABC Television Group, Hearst Corp. and NBC Universal.

Unlike some other states that allow tax credits or refunds for film companies, South Carolina pays cash to reimburse producers a percentage of their wages and supplies. The wage rebates come from the general fund, while the supply rebates come from the state's admissions tax.

Productions that film in South Carolina and spend at least $1 million in the state can receive up to a 20 percent cash rebate on in-state employee wages and a 10 percent cash rebate up to $3,500 on out-of-state employee wages, according to the Film Commission.

Out-of-state performing artists, including stunt performers, are eligible for the full 20 percent cash rebate, according to the commission. The state also offers up to a 30 percent cash rebate on in-state supplier expenditures if at least $1 million is spent in the state.

Productions spending at least $250,000 in the state are exempt from sales and accommodations taxes. The Film Commission has the authority by law to spend up to $10 million annually on film rebates.

Because "Army Wives" was recruited at the start of the incentives program, that production is eligible for a 20 percent rebate on wages and 30 percent for supplies, Edmonds said, higher than what current productions receive.

Taxpayers are expected to pay "Army Wives" producers more than $2 million this year in rebates for its fourth season, he said.

He said that the producers of all films receiving cash rebates have spent $153.4 million locally.

For "Army Wives," that includes building soundstages and spending $1 million on utilities, he said. Four cast members have bought homes in the Charleston area, Edmonds said, and Bell, who starred in ABC's former hit "JAG," bought a home for her parents.

"Because 'Army Wives' is a longterm series, they have left a much larger footprint than most feature films," he said.

That has meant internships for students at the College of Charleston and Trident Technical College and the University of South Carolina, he said, as well as 55,000 nights of lodging.

McGill said the productions also have spread the word about South Carolina.

"They have just really put South Carolina in the spotlight," he said. "It markets our state."

House Speaker Pro Tem Harry Cato of Travelers Rest said, "Overall, I'm a supporter of film incentives. The impact they have on the local economy is pretty tremendous. And I see it as an opportunity to promote South Carolina."

On the day Bell visited the General Assembly, she was presented with a proclamation honoring "Army Wives" in the House.

"Succsful day@ the state Capitol in Columbia!" she Tweeted to fans. "Fingers crssed th tax incntive stys!! Call your SC reps! ;)"