Film Tax Credits Create Jobs, Spur Pennsylvania's Economy

The Pittsburgh region has many so many attributes to offer. From the meeting point of three major rivers, to the ethnically diverse neighborhoods, to the characteristic architecture offered throughout the city, we have gained the status of being a very scenic place to live and a destination to visit.

Add to that the reputation of a hard working class of citizens and the reasonable cost of living, Pittsburgh has truly become a film friendly environment which will continue to have a positive and promising impact for the state of Pennsylvania. 

Much excitement has led up to the release of Christopher Nolan’s final film in the Batman trilogy, “The Dark Knight Rises.” The first two installments—“Batman Begins” (2005) and “The Dark Knight” (2008)—have earned over $1.3 billion worldwide and the trilogy has become one of the most successful reboots of the Batman franchise. This series has real implications for our area because two of the three movies were partly filmed in the Pittsburgh region thanks to a tax credit Pennsylvania offers.  

Act 55 of 2007 established a film tax credit which offers directors and producers who film 60 percent of their production within Pennsylvania a 25 percent credit in taxes. For the first fiscal year this credit was available (2007-08), $75 million was allocated for the tax credit. 

Over the years, due to tightening in spending and conflicts during budget negotiations, the tax credit has often been a point of contention between some Republicans and Democrats and sometimes seen as an area to reduce funding to or complete elimination. As a result, only $42 million was allocated for the credit in FY 2009-10, but rose again in 2010-11 and has remained at $60 million, including for FY 2012-13. 

At first glance, the tax credit may be seen as another incentive for the large film industry which already has millions to spend. However, upon further examination one will see that local economies are often the ones who benefit the most from such a credit because the money is directly returned to our state in other ways. 

When film productions come to Pennsylvania, our state becomes the temporary home for all involved. The Commonwealth’s various industries often supply the production company and individuals with necessities thus triggering the trickledown effect.  Many supplies and food are purchased in the state, car and truck rentals increase, hotel rooms are booked in the dozens, electricians are needed to help produce the backdrops and special effects, extra police are hired for security and the list goes on and on. A boost in work also means more and busier union members. What this tax credit essentially does is create and attain jobs. 

The benefits don’t stop when the filming ends. Many businesses continue to sell goods relating to a movie and people will visit Pennsylvania looking to see what we have to offer from all of the media coverage. 

Perhaps the biggest economic impact is often felt for the various movie theaters located in Pennsylvania.  Many individuals who do not have an interest in the Batman trilogy may be interested in viewing the film to see Pittsburgh and our city’s architecture and diversity play out on the big screens. Movie theaters across the state have prepared for the Batman opening by ordering extra food supplies as well as making sure they have enough staff to meet the demands.  Furthermore, when people spend money, tax revenues continue to rise. 

The numbers say it all. For the $242.5 million the state has awarded in film tax credits, $1.4 billion in local economic activity has been spurred as well as the creation and attainment of nearly 14,500 jobs since the program’s inception. At the local level, the impact has been equally as impressive. For fiscal year 2010-11 alone, Pittsburgh saw the creation of nearly 3,000 jobs attributed to films produced by companies that applied for and were approved for tax credits during that year. 

The film tax credit has been the stimulus for the film industry to discover the amenities Pittsburgh and the entire state has to offer. An example of the success the tax credit has achieved is the more than 70 pictures that have been filmed in Pennsylvania since 2007. In addition, the popularity of the program continues with nearly three-quarters of applicants being left with no incentive. 

As more and more states implement programs similar to Pennsylvania’s, we need to make sure the Commonwealth continues to offer this incentive and in fact increase the allocation. The tax credits have proven to be instrumental in ensuring continual growth in our region by attracting major film and television shows for many years to come. I voted in favor of Act 55 of 2007 and will remain an advocate for the film tax credit because I understand the implication it has for a city like Pittsburgh and the people who live in and on the outskirts of our region. 

In closing, the movies should never be a place where people risk losing their life, rather somewhere individuals can go to relax, escape from the real world and be entertained. The event that took place in Aurora, CO, over the weekend was truly tragic and my sympathy goes out to all of the innocent victims and their families and friends.