Spending by film and television productions in Hawaii dropped 7 percent last year, but industry insiders here feel 2013 was a strong year and that recent increases in the state’s tax credits will bear fruit over the next 12 months.
Productions spent an estimated $228.2 million statewide last year, said state Film Commissioner Donne Dawson. In 2012 that figure was $245.6 million, she said.
The industry generated 2,852 jobs in 2013 compared with 3,168 jobs for 2012, she said.
"It’s a good year," Dawson said of 2013. "It isn’t as good as it could be, but it is strong considering that we are just embarking on the impact of the tax credits. I anticipate that it will be even stronger this year."
Production tax credits are a heady incentive for film and TV projects, she said. Simply put, qualified productions are eligible for a refund from the state based on what they spend here: for Oahu productions, 20 percent of what the production spent; and for neighbor island productions, 25 percent, Dawson said.
The tax credits have been around for several years, but in 2013 Hawaii lawmakers approved a 5 percent increase that took effect in July. The increase was retroactive for productions whose tax years began in January 2013, Dawson said.
Her prediction for a good 2014 is rooted in simple arithmetic.The state has had only a few months to get the word out about the increase, and that word is spreading, she said.
"There is greater opportunity for decisions to be made to send productions our way," Dawson said. "More productions are aware of the increase to the credit and the savings they can realize by taking advantage of it."
Another key provision of the tax credit changes that is expected to help this year is a new expiration date: Instead of ending in 2015, the tax credits will now expire Jan. 1, 2019. That’s most helpful for a TV series, which typically wants a five-year window in which to work.
Dawson will lead a contingent of state and county film commissioners in March when they attend the annual Locations Trade Show organized by the Association of Film Commissioners International in Los Angeles. The trade show looms as "a critically important" event, Dawson said. It will be attended by thousands of producers, studio executives, tax specialists and location managers.
"It is, quite frankly, all about the incentives," she said. "We do talk about locations and what’s possible in terms of physical locations. But in the last 10 years it’s really become all about the tax incentives that are available."
Walea Constantinau, Honolulu Film Office commissioner, will make the L.A. trip because Oahu typically attracts 75 percent of the production money spent in the state. Last year film and TV productions spent an estimated $171.1 million on Oahu, she said. The year before, that figure was higher: $184.2 million.
The decline in spending is not large enough to worry about, she said.
In fact, after hosting the monster remake "Godzilla," the Margaret Keane biopic from Tim Burton called "Big Eyes," an as-yet-untitled film by Cameron Crowe and the fourth season of the CBS TV series "Hawaii Five-0," Constantinau feels good about 2013.
"I think last year was a fantastic year because of the variety of the productions," she said. "That shows a healthy industry."
That kind of robustness benefits a lot of people, according to the state’s Department of Business, Economic Development and Tourism, which tracks how production dollars flow through the community — in other words, how much additional spending the money generates.
The agency’s so-called "multiplier" formula estimates that production spending resulted in $399.3 million powering Hawaii’s economic engine.
AND that’s a wrap. …
———
Mike Gordon is the Star-Advertiser’s film and television writer. Read his Outtakes Online blog at honolulupulse.com. Reach him at 529-4803 or email mgordon@staradvertiser.com.
