The reason House of Cards films in Maryland, rather than D.C., where it is set, can be summed up thusly: $$$.
While the Netflix production has received nothing from D.C.’s film incentive fund, Maryland legislators forked over $11.5 million in tax credits for this year alone. Between fiscal years 2012 and 2016, the state has given or plans to give House of Cards $37.5 million in tax credits.
A draft report published last month by Maryland’s Department of Legislative Services finds that, while film productions have short-term benefits, “film production activity tax credit does not provide long-term employment.”
Maryland has provided $62.5 million in tax credits between fiscal 2012 and 2016 while only receiving a fraction of the tax credit amounts back in revenues to the State and local governments. Additionally, states are fiercely competing with one another to draw productions into their state. This type of competition is not only expensive, but promotes unhealthy competition among states.
According to the report, “for every dollar granted in film tax credits, the state receives 6 cents and local governments receive about 4 cents in return.”
Not so, says a report [PDF] prepared earlier this year for the Maryland Film Industry Coalition. “For every reported $1 claimed in film tax credits, Maryland gains $1.03 in total additional property, sales, income, and other tax revenues,” the report said of years 2012 through 2015.
While the MFIC report said 690 full-time jobs were created, it also claimed long-term benefits from tax incentives including future tourism and promotion from the actors involved in the projects.
The MFIC report recommended increasing the cap on tax incentives for TV and film productions, while the new report recommends allowing ” the film production activity tax credit to sunset as scheduled on July 1, 2016. Going forward, DLS recommends that the General Assembly focus economic development efforts on incentives that create permanent and lasting employment, rather than temporary jobs.”
After lawmakers reached a deal to keep House of Cards in Maryland this April, Governor Martin O’Malley said in a statement, “Spoiler alert: we’re going to keep the 3700 jobs and more than 100 million dollars of economic activity and investment that House of Cards generates right here in Maryland.”
Some D.C. Councilmembers, most notably Vincent Orange, want to expand the city’s small film incentive fund to lure productions, like House of Cards and Scandal, to Washington.
