Pa. budget victim: Local film business

For those in the business of luring Hollywood movies to Pennsylvania, last year's budget staredown produced a nail-biter in Philadelphia and Pittsburgh, the state's two filmmaking hubs. And the drama might not be over.

Pittsburgh nearly lost a batch of TV and film projects as the legislature and Gov. Wolf failed to pass a budget due July 1. Philadelphia lost a planned ABC drama series and feature film starring Josh Brolin while $60 million in annual state film tax-credit money was held hostage by political foes.

While not everyone embraces the concept, tax credits are considered essential in the brutally competitive sport of winning film and TV shoots. About 40 states offer them, leaving little margin for error as producers ponder where to point their cameras and spotlights.

While catastrophe in Pennsylvania was avoided at year's end - Wolf signed a $23 billion emergency measure that released the investment sweetener - the damages could expand as the state's reputation takes a hit, officials in both film markets warn.

"Everybody in the industry knows that Pennsylvania hasn't passed a budget," said Sharon Pinkenson, executive director of the five-county Greater Philadelphia Film Office. Just last year, she said, "we don't even know what [projects] we lost."

Philadelphia has few projects on the ground now. Local crews have been looking to other states, where bigger tax-credit pots have sparked booms.

"My phone is ringing off the hook with crew members who want to know what's going on, because their unemployment is running out," Pinkenson said. "Is that the way you want to conduct a growth industry?"

In part, Pinkenson and others blame the local dry spell on the budget turmoil, but they also cite the state's refusal to increase the allocation. Competing states New York and Georgia are far more generous.

Although it remains flush with projects compared with Philadelphia, Pittsburgh also is concerned.

"How do we pass a 2016-17 budget if we haven't finished the 2015-16 budget we're in?" said Dawn Keezer, director of the Pittsburgh Film Office. "It's all very troubling. The message it sends our clients is that we're not serious about this industry."

The state Department of Community and Economic Development says the number of tax-credit applications has remained strong in the past year, according to Carrie Lepore, deputy secretary of its Office of Marketing, Tourism, and Film.

"We're pretty much pacing where we have in previous years as far as the number of applications received," Lepore said.

Mindhunter, a Netflix series from House of Cards executive producer David Fincher, will shoot in Pittsburgh after being approved for $12 million in tax credits from the pot activated by Wolf's signature in December.

A Denzel Washington film, Fences, also is in preproduction there, Lepore said, after scoring $7.6 million out of this year's pool.

Pennsylvania's tax-credit program, begun in 2007, has remained stuck mostly at $60 million. This has hurt the state, Pinkenson said, and particularly Philadelphia, where fixed costs generally are higher than in Pittsburgh. Producers rely on tax credits as a way of reducing their state income tax tab and overall project cost.

"It's never been enough money," said Keezer, who with Pinkenson has lobbied for years to lift the cap or increase the allocation. "It really needs to be at least $100 million."

In Georgia, which has no tax-credit cap, more than two dozen projects are underway, Keezer said. "They have these soundstages that have been built," he said. "It's really a model that Pennsylvania should be following."

Maryland's hedging on the tax issue nearly caused it to lose the House of Cards series starring Kevin Spacey, Keezer added.

Maryland expressed reluctance about its tax-credit commitment, and producers scouted Pittsburgh and Philadelphia as alternatives. Maryland relented and the series stayed, Keezer explained.

Pennsylvania's own refusal to expand the available funds resulted in a recent high-profile loss for Philadelphia.

After filming the Oscar-winning Silver Linings Playbook in and around the city and Delaware County, director David O. Russell explored filming American Hustle here, too. But tax-credit funds had run out. Russell tried and failed to make the case to expand the pie to then-Gov. Tom Corbett.

In the end, Russell filmed both American Hustle and Joy - both starring Jennifer Lawrence and Abington native Bradley Cooper - in Massachusetts.

"We couldn't guarantee them the tax credits, so they went up to Boston," said Diane Heery, cofounder and president of Philadelphia-based Heery-Loftus Casting Inc., which handles major feature-film, TV, and other projects.

For the next budget year, which begins July 1, Wolf has proposed $60 million. The program enjoys bipartisan support, said his spokesman, Jeff Sheridan.

"Obviously, we want to be able to compete with different states in a number of different areas," Sheridan said. But the state's fiscal problems loom large.

He said it confronts a $2 billion budget deficit, which he blamed on the Wolf administration's predecessors.

Pinkenson said the tax credit has returned handsomely on the taxpayers' investment, generating jobs and something else, too.

"This is the one industry in the world that can do the one thing that money cannot buy: Create civic pride," Pinkenson said. "You tell me that Philadelphians aren't proud of what movie is coming in here next.

"They don't call them the Rocky steps for nothing."

mpanaritis@phillynews.com

610-313-8117@Panaritism