Senate kills film tax credits

JUNEAU — The Alaska Senate voted 14-6 Monday to kill the film production tax credit that has led to a boom in Alaska-themed programming.

Proposed by Sen. Bill Stoltze, R-Mat-Su, the bill eliminating the film tax credits moves on to the Alaska House of Representatives.

He said the move is purely fiscal.

“This is not an industry that provides anything to our general fund of any substance,” Stoltze said.

And, at a time when the state is facing billions in budget shortfalls due to plummeting oil prices, Stoltze said, it didn’t make sense to offer tax credits” to those kinds of industries.

Sen. Johnny Ellis, D-Anchorage, said the governor had already suspended the program. Stoltze’s legislation Killing it outright is a step too far, he said.

“The bill saves no state dollars. All it does is send a very negative message that Alaska is closed for business,” Ellis said.

He pointed to Alaskans who had jumped into the industry wholeheartedly.

“They made investments in sound and lighting equipment, high-tech cameras, gear trailers and so much more,” he said.

The idea in passing the film tax credit, Ellis said, was to entice productions to Alaska, a state that for decades had seen stories that were supposedly set in Alaska filmed in places like Washington state, British Columbia and even Massachusetts.

The idea also was to create jobs for young Alaskans that would keep them in the state.

“The passage of this bill kills the hope for... thousands of Alaskans with similar interests,” Ellis said.

He also answered some pretty oft-repeated criticisms of the program. He said that it’s true film productions don’t pay any taxes in Alaska, but that’s because Alaska doesn’t have a state income tax or a state sales tax.

“That is not a fair criticism of this industry when we don’t have the larger discussion,” Ellis said.

But they do spend money here, and that money helps to pay for local government and bolsters local economies.

Another criticism has been that the program has mostly enticed reality television to Alaska.

Ellis said the state had looked into trying to exclude those kinds of productions and found it could not.

“My conscience is clear on that point,” he said.

Besides, he said, the reality shows put Alaska in people’s minds, doing, in Ellis’ words, “millions of dollars of promotion for the tourism industry that we couldn’t otherwise have afforded.”

Before the Senate could take a vote on the bill, Sen. Bill Wielechowski, D-Anchorage, tried to tack on amendments that would have cut or eliminated other tax credits — two credits given to oil producers and one to oil refiners.

“The issue of tax credits are going to be more and more of an issue,” he said. “We need to look at every tax credit out there.”

All three of Wielechowski’s amendments failed.

Contact Andrew Wellner at 352-2270 or andrew.wellner@frontiersman.com.