No one will ever mistake Des Moines for Hollywood, but a generous two-year-old tax incentive has drawn a number of moviemakers to Iowa.
Now some supporters of the tax breaks are asking legislators to remove a $50 million cap they imposed in the last legislative session to ensure more moviemakers come to the state.
"The impact of the program has been that it's wildly popular in bringing lots of stories to be told here," said Terry Trimpe, who produced a movie shot in Iowa that premiered this summer.
Since legislators approved the tax breaks in 2007, the state has issued about $32 million in tax credits for more than 20 film projects. The Legislative Fiscal Bureau estimated economic activities from that moviemaking have generated $810,000 more for the state than it has lost in potential tax revenue.
Department of Economic Development spokeswoman Erin Seidler said the number of projects actually is higher.
"There are a lot of projects that are in the pipeline that may not have gotten their tax credits yet," Seidler said. "Iowans are being employed on these projects and a lot of money is being spent in the economy."
The program is a good deal for the film industry, allowing both investors and producers to claim an income tax credit. Under Iowa's program, investors and producers get a tax credit for up to 50 percent of spending on a film production. That means that don't pay taxes on half of their spending.
David Pritchard, president of Chatsworth, Calif.-based Gigapix Studios, said many states offer incentives but Iowa's are about 10 percent higher than most others.
"That 8 percent to 10 percent can be the margin for independent producers," said Pritchard. "It's harder and harder for independent producers to find financing."
Gigapix is now filming a pirate movie in Iowa and has plans to lease space in a struggling Des Moines shopping mall. The company wants to build sound stages and eventually facilities for technicians and other workers who are crucial for film production.
It's all part of Gigapix's effort to make 10 to 15 movies in the state over the next five to eight years.
"One of the hardest things to do is to find a local crew," Pritchard said.
Legislators imposed the cap in response to a drop in tax revenues that forced job cuts and furloughs in state government, but some argue now isn't the time to limit the program.
Trimpe, whose romantic comedy "16 to Life" was filmed in the Mississippi River town of McGregor, said officials should expand the program to attract as many projects as possible.
"Without the state of Iowa tax-incentive program, this film most likely would not have been started and certainly not completed," said Trimpe, an Iowa native who lives in Lisbon. "Without the tax credit I doubt that anyone would have contacted anyone in Iowa and it would have been filmed elsewhere."
The tax credit remains popular among legislators, but Sen. Joe Bolkcom, D-Iowa City, said the cap makes sense. He noted that Iowa offers about $185 million in total tax credits annually, and it's sensible to not devote too big of a share to moviemakers. Tax credits address a variety of areas, from machinery and equipment upgrades to job creation incentives.
"I think there should be a tax credit," said Bolkcom, who heads the Senate Ways and Means Committee. "I don't know if we should be as generous as we are."
Rep. Roger Thomas, D-Elkader, said the movie tax breaks are working, and he expects lawmakers to take up the matter again during next year's legislative session.
"We will likely tweak it again," said Thomas. "This is a big deal and we've just got to strike that balance."
