South Windsor Town Manager Matthew Galligan sent a letter to state lawmakers last week, pleading them to abandon the governor’s proposal to cap the film tax credit, a move he says would destroy the state’s chances of landing a $90 million film studio project that would create 2,000 jobs and $400 million in annual spending.
“South Windsor is aggressively moving forward to attract this project … but without tax credits in sufficient quantity to attract major motion pictures, it will not move forward,” Galligan wrote in his Feb. 23 letter.
South Windsor and the state Department of Economic and Community Development have been in month-long negotiations with Pacifica Ventures, a California developer proposing to build a 61-acre state-of-the-art film studio in South Windsor, consisting of eight sound stages, production studios and a screening and visitors’ center.
But Gov. M Jodi Rell’s proposal to cap the state’s film tax credit at $30 million to close a growing budget deficit has put the studio in jeopardy.
“It’s like an anti-stimulus,” said state Rep. Jeffrey Berger (D-Waterbury), chairman of the commerce committee. “The governor’s plan is unacceptable for us if we want to grow the industry.”
Berger said a tax credit cap would put the state at a major competitive disadvantage to other states, including California, which are currently expanding their tax credit programs to woo the industry.
The state’s program allows eligible production companies to receive a tax credit of up to 30 percent of qualified digital media and motion picture production, pre-production and post-production expenses incurred in the state.
According to the legislature’s Office of Fiscal Analysis, $115 million in tax revenue will be lost this fiscal year because of those credits.
Robert Genuario, Rell’s budget director, told lawmakers at a Feb. 23 public hearing that the proposed cap is still generous to potential filmmakers.
But Berger says that at least four other development projects would be jeopardized if Rell’s proposal goes forward.
NBC Universal, for example, is discussing with the state plans to establish a media production studio in southern Connecticut, a multimillion-dollar investment creating up to 300 jobs.
NBC Universal warned lawmakers last week in written testimony that the project would likely not go forward without the 30 percent production credit.
Questions linger, however, whether film tax credits are an economic stimulus to the state.
“This is probably not the time for Connecticut to have a big hole in this budget for programs that have questionable economic return,” said Douglas Hall, the acting managing director of Connecticut Voices for Children, an advocacy organization which supports Rell’s cap.
