Thursday, Sept. 11, 2014 | 8:30 p.m.
After gutting nearly 90 percent of the state's film tax credit today, Nevada lawmakers signaled they will push to revamp it in 2015.
The film tax credit was a passion project for Democrats in Las Vegas, a virtual neighbor to Hollywood, and a casualty of the deal for Tesla.
“I will be bringing it up next year,” said Sen. Aaron Ford, the North Las Vegas Democrat who sponsored the film tax credit bill in the 2013 session with support from Nicolas Cage.
Sen. Tick Segerblom, a Las Vegas Democrat, said the film workers union "will never feel any pain," according to a report in the Reno Gazette-Journal.
When he first announced the Tesla deal Sept. 4, Gov. Brian Sandoval said he wanted to take $70 million from the $80 million film tax credit. The money would help fund the Tesla tax incentives.
The move set off Nevada's ongoing north vs. south tension. Critics viewed Sandoval as taking from the south (film) to give to the north (Tesla). And Sandoval made it clear to Clark County Democrats during this week's special session that he wasn't willing to negotiate.
Ford and other Senate Democrats first heard about the cuts last week about 15 minutes before Sandoval’s Sept. 4 press conference with Tesla CEO Elon Musk.
“It appears to me we are picking winners and losers here,” said Sen. Kelvin Atkinson, a North Las Vegas Democrat.
But Steve Hill, executive director of the Governor’s Office of Economic Development, said offering the credits to Tesla is “a more efficient and effective way” to justify “using dollars that were available."
“It is not to diminish those industries,” Hill said on the Senate floor.
Hill said the permanence of the Tesla jobs outweighed the temporary jobs that come to Nevada to make a film.
Here's a little background on the program and how it works.
The goal of the tax credit was to launch a new entertainment industry in Nevada and create jobs for production crews here.
After this week, Nevada will have $10 million in tax credits left for productions that spend more than $500,000 and that hire Nevadans and shoot in Nevada. Those who work in the industry say the decrease in tax credits will deter productions from coming to Nevada. The state has issued $5.8 million worth of credits since they became available this year.
What’s it been used for so far?
The first project to benefit was “Paul Blart: Mall Cop 2," which was shot at the Wynn resort in Las Vegas. The film, which was never in the running for an Oscar, became the brunt of jokes among lawmakers and supporters this week. TV projects and other movies have taken advantage of the credit.
What about film credits in other states?
Even though it's next door to Hollywood, Nevada was late to the film tax credit party. Thirty-seven states currently offer similar tax credit programs. But that number has been on the decline in recent years from a high of more than 40, according to a recent report by Governing magazine. The results of the tax breaks have been mixed. Some states reported a positive return on their investment and others have lost as much as 86 cents of every dollar spent on film tax credits.
Why shifting film tax credits to Tesla could backfire?
Favoring Tesla sends a bad signal to the film industry. Hollywood could be reluctant to return to Nevada even if film tax credits are restored during the 2015 Legislature.
Scrapping the film tax credits after only nine months makes the state seem inconsistent in its approach to economic development, said Sen. Patricia Spearman, a North Las Vegas Democrat.
“It sets a dangerous precedent,” she said.