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Keezer's Film US coalition loses bid for tax credits

Wednesday, November 10, 1999

By Jack Torry, Post-Gazette National Bureau

WASHINGTON -- Tax credits to keep the movie industry shooting on U.S. soil bit the dust yesterday in a House committee even as an unusual band of actors' unions, lawmakers and worried cities vowed to halt the "runaway production" problem.

Dawn Keezer, director of the Pittsburgh Film Office and chairwoman of Film US, a new coalition of film commissioners who fear further loss of revenue and jobs, said at a news conference on Capitol Hill, "We've got to come up with something that's going to show that we want to retain this industry.

"This is our industry. We grew it. We created it. And we haven't stayed competitive," she said.

The next step will be hearings next year in California by a bipartisan congressional task force.

Pittsburgh has aggressively offered itself as a location site for filmmakers. Since 1990, the city has served as a location for 52 feature and television films, including "Dogma," a Matt Damon and Ben Affleck film scheduled for national release on Friday.

Canada, especially, is luring U.S. filmmakers because the exchange rate and government incentives make it cheaper to film there. Pittsburgh and its environs, where the 1968 cult classic "Night of the Living Dead" was filmed, lost out on the newest movie by the same director and Pittsburgh native, George Romero, who made "Bruiser" in Toronto. Chicago, where the 1980 "Blues Brothers" movie starring John Belushi and Dan Aykroyd was shot, also lost out to Toronto on the sequel, "Blues Brothers 2000."

Keezer said, "Pittsburgh's main bread and butter had been the movie-of-the week industry, which has left almost entirely. Now that it's hitting the production centers of Los Angeles and New York, a lot of people are standing up and taking notice."

The proposed tax credit of 20 percent of the first $20,000 earned by production staff of movies filmed in the United States unexpectedly became controversial when some lawmakers suggested that it might inadvertently benefit the pornography industry, giving them cash incentives to make more movies. Proponents denied the charge. Directors Guild of America lobbyist Gary Gasper said that films must be submitted for a rating in order to qualify for a tax credit.

But the issue didn't have staying power as lawmakers fought to finish the budget and adjourn for the year.

Film US and its allies have not figured out a solution yet. With the demise of the proposed tax credit, the United States may raise the matter with the World Trade Organization. Others are hopeful that a bipartisan congressional task force will be able to persuade the film industry to stay home.

Appearing at the news conference with Keezer, Rep. Mark Foley, R-Fla., said, "We've heard horror stories of movies going to Canada, Prague and other places. Other governments are becoming very competitive in soliciting business out of the United States and luring our film industry to their environs. And we are hopeful to work together to put a stop to that."

Rep. Jerry Weller, R-Ill., said that what really irked him is that Toronto film officials telephoned their counterparts in Illinois to ask for advice on how to make the Toronto sets resemble Chicago and Joliet.

The lawmakers and Keezer say it's not simply a matter of ego. Instead, they cite figures from a study released in January by the Screen Actors Guild that 23,500 jobs in the entertainment industry have been lost in the United States because of Canadian competition.

Film US, formed last May by cities such as Pittsburgh, hoped to have the tax credit become law by the end of the year. Weller and other Republicans on the House Ways and Means Committee, which writes tax law, earlier this year thought they had widespread support for the tax credit and planned to attach it to a bill that would include other tax breaks and an increase in the minimum wage.

But Rep. Bill Archer, R-Texas, chairman of the Ways and Means Committee, prevailed upon Weller to withdraw the amendment. A spokesman for Weller said Archer "would like us to review other ways to deal with this," such as filing a complaint with the World Trade Organization.

The actors' guild study found that in 1998, 27 percent of the 1,075 U.S.-developed film and television productions, were "economic runaways," filmed outside the United States. That was a 185 percent increase from 1990.

The guild argues that the loss of such productions cost the United States $10.3 billion in direct lost production spending plus the "multiplied" effects of lost spending and tax revenues in 1998 alone. That's five times the estimated loss in 1990.

(Ann McFeatters of the Post-Gazette National Bureau contributed to this story.)

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