Richard Rionda Del Castro, the producer of USS Indianapolis — an upcoming movie starring Nicolas Cage about the sinking of the ship that transported the nuclear bomb to end World War II — is filming on and off Alabama’s coast this month.
“What is exciting about this film is really making this story,” he said. “It’s a film that should have been made long ago, and I don’t understand why no producer has made this film before.”
But it’s not just Orange Beach’s white sand, downtown Mobile’s historic architecture and a mansion outside of town that make Alabama an attractive setting for such a major motion picture.
There’s something else pretty about this picturesque port town: tax credits.
In 2012, the Alabama Legislature unanimously passed a bill expanding how much money companies that produce movies, television shows and commercials can recoup on expenses and payroll by filming in the state. Before then, state’s film incentive program, which began in 2009, was capped at $10 million. After that, it rose to $15 million in 2013, to $20 million in 2014 and to $25 million in 2015.
According to the Alabama Film Office, the state since 2009 has hosted 55 projects: feature films, television shows and commercials. However, knowing the direct economic benefit — or loss — is nearly impossible to tell.
Film office manager Kathy Falk said the program is bringing more films, more jobs and more revenue to cities where scenes are set. She said the state has nearly reached its incentives cap in the years since expanding.
“We feel like we are getting back from it what we’re giving out,” Faulk said. “So we feel like our program is working the way it was intended and the way it should.”
Films shot in Alabama are also seen as a boon for tourism. Lee Sentell, director of the state’s tourism department, said more tourists and school groups have traveled to Selma since the historical drama was released last year.
“The gold standard was the film Selma,” Sentell said. “Not only was the story based in Alabama, but the most significant scenes were filmed where they actually happened, so that is a huge win for the production side but also for the tourism side. It was essentially a two-hour commercial for Alabama.”
Marco Cordova, a film tax credit placement expert for Los Angeles-based Entertainment Partners, said incentives play a vital role in any location decision. Cordova said it’s often one of the very first things production companies consider.
“I think that in general, incentives are helpings states attract business and create infrastructure that they wouldn’t have otherwise,” he said.
Not everyone is giving film credits a four-star rating.
Joseph Henchman, vice president of legal and state projects at the Tax Foundation, a right-leaning tax think tank that has studied film incentives, said states’ collective spending has plateaued at $1.5 billion. The number of states with programs has also fallen from its peak of 41 to under 30.
“What we are seeing is it used to be every state had a small program, and now a couple of states have very large programs and the other states have very small programs,” he said.
Henchman said some states have commissioned studies to examine the effectiveness of their programs and have found unfavorable results. He said production companies have been less than loyal when the money dries up.
“As soon as you end your program or make it less generous or some other state makes theirs more generous, the industry’s out of there,” he said.
A number of other states are capping, cutting or closing programs that for years have doled out millions of dollars. Lawmakers in Michigan, a state that began offering incentives decades ago, voted last month to end its program after this year.
However, Del Castro said incentives are critical.
“If you start changing the tax credits and making them less attractive, then we won’t come here,” he said. “And that will mean that all the progress that has been made by these men and women who work in this industry will be wasted.”
Republished with permission of The Associated Press.