CLEVELAND-- The Ohio House of Representatives version of the state budget unveiled this week eliminates the motion picture tax credit, which has drawn major productions to Cleveland. The change will help pay for income tax cuts to Ohioans earning less than $88,800 per year.
Opponents of the elimination said Northeast Ohio's blockbuster movie industry could go bust if the $40 million motion picture tax credit is dropped.
“I thought our job was to attract people to Ohio and bring economic development to Ohio, and that's what we do, so it's heartbreaking to me if we're going to have to tell people to leave,” said Ivan Schwarz, Greater Cleveland Film Commission president and CEO. “It's important because it's jobs. We're a jobs and economic development agency. It just happens to be through film.”
A 2015 study commissioned by the GCFC and conducted by Cleveland State University researchers found about a two to one return on investment for each dollar spent in tax incentives.
Schwarz said the credit has not only supported crew members, but it has led to 5,800 full-time equivalent jobs and benefited hundreds of local vendors. He said without a robust tax credit, productions will choose other states that have better incentives.
“That money isn't an ‘I owe you.' It isn't coming three years from now, we're not betting on the future,” he said. “That money gets spent right now.”
Amy Hanauer, executive director of the progressive group Policy Matters Ohio, noted the CSU study also found the credit is not paying for itself in tax revenue generated by productions.
“We're all paying for it, because it's basically dollars that are taken out of our state budget, things that we could spend on other things that taxpayers have said they want supported and that we really need,” Hanauer said.
“I think it makes a lot of sense to do away with it. Movies are fun, but the fact is there are more important things to spend state dollars on like our schools, like cleaning up our lake, like making it easier for kids to afford college.”
Greg Lawson, research fellow with the conservative Buckeye Institute said his organization also opposes the credit. He said taxpayers are unfairly subsidizing the film industry and it hasn’t created enough permanent jobs.
Michigan eliminated its tax incentive in 2015.
“This isn't about saying we don't want a film industry in Ohio,” Lawson said. “This is about saying we want to be sure that we're fair for everybody and not picking one industry over everybody else.”
While the House Republican budget cuts the motion picture tax credit, there are two bills proposed by Northeast Ohio Republicans that would expand it, including a House bill that would more than double the tax credit to $100 million.
A vote on the budget by the full House could come next week before it heads to the Ohio Senate. The budget must be approved by the end of June.