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By Will Doran June 29, 2017

NC film tax credits: Still unpopular with GOP, still not in the state budget

Restoring North Carolina's film tax credit program has been a pet project of some Democratic politicians and film industry workers – especially on the coast, where several major films and shows have been shot – for several years now.

The state used to offer large tax breaks to productions who filmed here. The Hunger Games, Iron Man 3 and One Tree Hill were just some of the major movies and TV shows filmed in North Carolina under that program.

Republican politicians cut the program several years ago, however, decrying it as a government hand-out to Hollywood special interests. They replaced it with a significantly scaled-down grant program.

Democrats want to bring back the tax credit program, saying it created jobs here and also boosted North Carolina's reputation and tourism industry.

Cooper had laid out a plan for bringing back a smaller version of the program than what had existed before it went to the chopping block in 2014.

However, in the budget that Republican lawmakers recently passed, which covers state spending through June 2019, Cooper's film tax credit plan was nowhere to be found. Instead, the budget kept the same Republican-backed program that has been in place the last several years.

In addition to allocating the money in different ways, the GOP grant program will spend $45 million over the next two years, compared to the $60 million Cooper suggested in his tax credit plan.

This is a highly political topic, and at this point it appears Cooper's argument doesn't hold enough sway to win the day. We rate this promise Stalled.

Our Sources

By Will Doran March 1, 2017

Cooper's budget contains film grant funding

When Roy Cooper was running for governor, his campaign website included a section called "Five things we can do to give our economy a boost."

One of the five was, he said, to "fight to restore the film tax credit."

He took the first steps toward doing that Wednesday, March 1, when he unveiled his proposed budget. It contains a proposal to reinstate the tax credit, which ended in 2014. Cooper suggested that it start back up next year.

However, Cooper doesn't get to actually set North Carolina's budget. That job belongs to lawmakers; the governor just gives them suggestions. And it's likely that this particular proposal is going to face opposition at the General Assembly.

The film tax credit program was a pool of money the state used to lure movie and television productions to North Carolina, in exchange for tax breaks. Some of the projects it brought here included blockbuster movies Iron Man 3 and The Hunger Games, and TV shows Homeland and Sleepy Hollow.

The Republican-led General Assembly decided not to renew the program in 2014, replacing it in 2015 with a grant program with significantly less funding. After the switch, the number of movies and shows filmed in North Carolina dropped significantly.

Democrats tended to support the tax credits. Supporters said the credits were responsible for bringing in hundreds of jobs and millions of dollars in spending that would otherwise have gone to other states.

Republicans, however, mostly said it was an unnecessary giveaway to Hollywood special interests.

So while Cooper's proposal might face some opposition, it's important to note he's already angling for a compromise.

In 2013, film companies had applied for $62 million in tax credits and spent an estimated $316 million in North Carolina in 2014, according to Raleigh news station WRAL.

The grant program that replaced the tax credits has a budget of $30 million annually – less than half what the state gave in tax credits the last two years they existed.

Cooper's proposal doesn't attempt to return the film tax credits back to their 2013 levels, although it would spend more than the current grant program.

He would restart a film tax credit in 2018, with a budget of $20 million that year and $40 million each year after that. Cooper would also lower the maximum amount a film could receive, from $20 million in 2013 to $12 million under his budget.

And while it still remains to be seen if GOP lawmakers will get on board, Cooper has at least put this campaign promise in motion. We rate it In The Works.

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