Rep. Swan introduces bill to control tax credits; seeks to reinstate film tax credit

State Rep. Kathy Swan wants lawmakers to take budgetary control of all state tax credits.

At the same time, she wants to reinstate a tax credit to encourage film producers to shoot movies in Missouri.

For the fourth year in a row, the Cape Girardeau Republican has introduced a bill that specifies all new and existing tax credits must be approved first by lawmakers as part of the annual budget process before they can be issued by state agencies.

Swan said lawmakers have no control over the hundreds of millions of dollars in tax credits issued annually by the state.

Annual tax credits have varied from $400 million to $600 million, according to Swan.

Those tax credits cut into state revenue and impact the state budget, she said Wednesday, adding “it is a lot of money.”

A state committee this summer recommended reining in tax-credit programs, including those involving low-income housing and historic preservation projects.

A separate group, the Missouri Housing Development Commission, recently voted against using state money to match $140 million in federal low-income housing tax credits.

Since adopting tax credits in 1973, the use of state tax credits has expanded to several dozen programs, accounting for more than $575 million in redemptions in fiscal 2016, according to the committee.

Swan said she hopes her bill will receive a hearing in 2018.

“I would have hoped we would have had a hearing before now,” she said, referring to her past efforts to push the legislation.

“What I really wanted to do is start the conversation,” she said.

But Swan doesn’t want to eliminate all tax credits.

Earlier this week, she filed legislation to reinstate a film tax credit. Swan said she has introduced similar bills for the past several years with no success.

Swan said Missouri is losing out on film productions since the tax credit was eliminated in November 2013.

The bill would allow tax credits equal to at least 20 percent of qualifying expenses associated with movies shot in Missouri.

The state lawmaker said her legislation includes a sunset clause that would terminate the program after six years unless reauthorized by the Legislature.

Joni Tackette, president of the Missouri Motion Media Association, said “Gone Girl,” a movie partly filmed in Cape Girardeau, was the last major production to take advantage of the film tax-credit program before it expired.

Swan said, “Without tax credits, ‘Gone Girl’ would not have been filmed in Cape Girardeau.”

The state representative said her hometown realized millions of dollars in economic benefits from the film.

Production of the 20th Century Fox Film “Gone Girl” in Cape Girardeau lasted about two months in the fall of 2013 and generated more than $7 million, according to Swan.

From lodging and office space to food and security, businesses throughout the city felt the economic boost. The production also hired 116 Missourians and used about 1,400 extras, many of them local.

20th Century Fox spent more than $7.8 million in audited expenditures while filming in Cape Girardeau, according to the state’s economic-development department. As a result, the production was eligible to receive up to $2.36 million through the tax-credit program, the Southeast Missourian reported in 2014.

Both Swan and Tackette said Missouri is losing out to other states, particularly Georgia, as a site for movie productions.

Tackette said 36 states have financial incentives to attract movie productions. Without a film tax-credit program, Missouri can’t compete, she said.

Georgia, in contrast, has a vibrant film industry. The shooting of movies in that state provided an economic impact of $9.5 billion in fiscal 2017, according to Tackette.

The HBO series “Sharp Objects” is a Missouri story that was filmed in Georgia, Tackette said.

Netflix’s “Ozark” series takes place in the Missouri Ozarks, but it was filmed mostly in Georgia, she said.

Tackette said Missouri allocated $4.5 million annually in tax credits for film productions before axing the program.

Reinstating such a small incentive won’t put Missouri in the same category as Georgia, but it will allow the state to be “competitive again” as a film location, she said.

mbliss@semissourian.com

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