A year ago, actors Catherine Bell and Kim Delaney, stars of the popular cable television drama “Army Wives,” visited the S.C. State House to make their case that their show, filmed in Charleston, couldn’t survive without extra taxpayer-funded incentives.
A good number of senators apparently were starstruck, as they changed their collective minds on an earlier vote and overrode, by a more than 2-to-1 margin, then-Gov. Mark Sanford’s veto of a state budget proviso benefitting “Army Wives” and other productions. The House earlier voted overwhelmingly to override the veto.
“We do not believe it is appropriate to change permanent law through proviso,” Sanford wrote in his veto message. “Second, we should not be increasing the incentives we give to Hollywood film companies in a year when we’re making such drastic cuts to core government functions.”
Based on Tuesday’s action in the Senate, however, it look likes lawmakers are planning a rerun of last year’s incentives giveaway.
The proviso (39.13) would give “Army Wives” and other film productions up to a 20 percent rebate – up from a base 15 percent as allowed under state law – on South Carolina wages paid to actors and other production employees; and up to a 30 percent rebate – up from a base 15 percent – on in-state purchases of products and services.
From 2006 through last year, “Army Wives,” through Touchstone Television Productions, received more than $17.7 million in rebates, or nearly half of the total $36 million doled out for film productions during the period, according to The Nerve’s review of online records with the S.C. Film Commission, a division of the state Department of Parks, Recreation and Tourism.
The House this legislative session again included the proviso for increased incentives in its proposed budget for fiscal year 2011-12, which starts July 1. The Senate, however, stripped it out of its budget version.
A joint budget conference committee of both chambers carried over the proviso. Last week, a motion by Senate Finance Committee Chairman Hugh Leatherman, R-Florence and a budget conference committee member, to include it in a compromise budget version failed by a 16-22 vote.
But on Tuesday, Sen. Creighton Coleman, D-Fairfield, moved to reconsider the motion, with several senators voicing their support.
“This is just one of those small things we can do,” said Senate President Pro Tempore Glenn McConnell, R-Charleston. “What we’re really doing is investing in the future.”
On a second go-around, the Senate approved, by a 28-9 vote, the motion to include the proviso in the budget conference committee report. Both chambers still have to approve a compromise state budget; the final version will go to Gov. Nikki Haley, with any vetoes to be considered by the General Assembly.
Whether Haley will veto the proviso, if included in the final budget version, is unclear. As a House member last year, she was one of only seven representatives who voted to uphold Sanford's veto of the proviso. But as governor, she made a cameo appearance on the show in March.
In 2010, “Army Wives” received nearly $5.7 million in rebates, according to the state Film Commission’s website (www.filmsc.com/about/reports/annual/default/aspx).
But department records provided last year to The Nerve showed that it was eligible to receive up to about $11.6 million in rebates last fiscal year, bringing its total projected rebates to $23.3 million for its first four seasons.
The 13-episode, fifth season began March 9 and ended June 12. A sixth season already has been picked up, according to websites for the show (www.mylifetime.com/shows/army-wives) and ABC Studios (www.abcstudiosmedianet.com), the show’s producer.
Marion Edmonds, spokesman for Parks, Recreation and Tourism, told The Nerve in a written response last week that the discrepancy in the rebate figures reflect calculations done during the calendar year versus the fiscal year. He also said the figures provided last year included rebate “commitments,” which he described as “balances reserved for the grantee pending (an) audit.”
The amount of rebates the show could receive this year won’t be known until an audit is completed next month, Edmonds said.
Edmonds said his agency supports the proviso. But when asked if “Army Wives” should continue receiving increased incentives in light of the show’s success, he directed that question to the show’s production company.
In a written response last week to The Nerve, Hope Hartman, vice president of communications for entertainment at ABC Studios, declined comment, referring all questions to Edmonds.
The show is the most successful series in Lifetime Television’s 26-year history, garnering a record 4.8 million viewers for its March 27 episode, according to the ABC Studios website.
Lifetime Television is part of A&E Television Networks, a joint venture of the Disney-ABC Television Group, Hearst Corp. and NBC Universal, according to websites for ABC Studios and Lifetime Television (www.mylifetime.com). ABC Studios was established as Touchstone Television in 1985 and given its current name in 2007.
“Army Wives” follows the “struggles, dreams and friendships of a diverse group of women – and one man – living with their spouses and families on an active army post,” according to the ABC Studios website.
Besides rebates on in-state wages paid by and supplies purchased by film production companies, South Carolina offers other incentives to the Hollywood industry, according to the S.C. Film Commission, including:
- Sales tax exemptions on purchased goods, services and accommodations;
- State income tax credits for investors who create motion pictures or production facilities in South Carolina;
- State income tax credits for companies that produce commercials in South Carolina with a base investment of $500,000; and
- No-fee filming on property owned by the state.
Proponents of incentives for the film industry contend that South Carolina productions account for tens of millions of dollars spent at local businesses. Supporters of “Army Wives,” for example, said last year that the show had generated more than $120 million for the Charleston area since production started.
But offering incentives might not necessarily increase the state’s tax coffers. In a 2008 study, College of Charleston economics professor Frank Hefner found that of nine film and television productions made in South Carolina in 2006 and 2007, the return to the state’s general fund for each rebated tax dollar was only 19 cents.
That equals a net loss to the state's treasury of 81 cents for every rebated incentives dollar, according to Hefner's study.
Nationwide, fewer states are offering incentives to the film industry, according to the Tax Foundation, a nonpartisan tax research organization in Washington, D.C. According to a foundation study released this month, although 40 states last year collectively offered $1.4 billion in film and television tax incentives, eight states either eliminated or suspended their respective incentives programs.
“States claim these incentives create jobs, but the jobs created are mostly temporary positions, often transplanted from other states,” the foundation said in a press release. “Furthermore, the competition among states transfers a large portion of potential gains to the movie industry, not to local businesses or state coffers.”
But for now, South Carolina’s lawmakers seem bent on producing another season of incentives for the film industry.
Reach Brundrett at (803) 254-4411 or email@example.com.