This year has proven to be a field of dreams — or, rather, a field of green — for movie producers filming in Iowa.
The economy-boosting idea of attracting films to the state with tax credits — in which the state covers up to 50 percent of filming costs for movies shot in Iowa — has erupted into controversy.
Officials are now tasked with picking up the fallen pieces of Iowa’s film industry and trying to salvage the multimillion-dollar credit system.
The failure brings expensive lessons for the state concerning effective oversight and accountability.
The outrage surrounding the tax-credit program — officially known as the Film, Television, and Video Project Promotion Program — materialized when movie executives used state money to finance, among several things, luxury vehicles. We’re a bit incredulous that a Range Rover helped movie executives better convey the pristine landscape of Iowa.
The scandal has led to the resignation of the director of the state Department of Economic Development and the manager of the state Film Office. Gov. Chet Culver has also asked the state Economic Development Board to forgo the approval of further tax credits until questions regarding the program are answered.
In such a high-cost and risky venture, officials should have asked these questions before handing out millions of dollars.
Edward Wallace, the president of the Iowa Taxpayers Association, said he’s certain there will be an examination of all tax credits, including those that are film-specific.
And that’s what is really important. The state must look at the program as a whole and diagnose the cracks in the dam.
Wallace also said the hallmark of good tax policy is having a sense of predictability — a predictability, in our opinion, undermined by the wrong-doings of movie producers and the blind eyes of government officials.
“If the predictability isn’t there, it’s very difficult for companies to assess the tax liability if the tax-incentive system is changing rapidly,” he said.
As Iowa officials rifle through millions of dollars in tax-credit requests to determine which are justified, it seems the state has enacted a program too large to control.
Locally, film directors Mike Saunders and Jason Bolinger are going ahead with their movie Collapse, despite having their tax credits frozen last week only a day after approval. Bolinger told the DI many projects will face closure without the funds from tax-credit incentives. It seems as if the greed of a few movie producers taking advantage of the lax credit system has ruined the whole lot for Iowa filmmakers.
While it might have been the best response to such a lofty scandal, Culver’s freezing of all tax-credit incentives for film companies spawned a fair share of dissidence.
“Culver is just trying to step up on his white horse and make the state look like it is responding to the scandal,” Collapse producer Bruce Hepprer-Elgin said. “It really gives the state of Iowa a bad reputation.”
This issue, like many others, is two-sided.
It’s understandable that filmmakers trying to save an honest buck recognized the tax-credit incentive program as a vital tool to make their dreams a reality. But a select few took advantage of the program’s loose stipulations, and officials across the state are doing their best to amend the problem.
State officials must work to avoid a similar calamity in the future. When millions of dollars in potential tax revenue are at stake, accountability and transparency are paramount.
In addition, officials must weigh the economic benefits of this and other tax-credit programs against the concomitant loss in revenue. When the state is in the midst of austere budget cuts and declining revenue, the last thing we need to be doing is doling out money for filmmakers’ ostentatious “props.”