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Advocates: Reviving tax credits would lure more multimedia productions

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PHOENIX – The nation’s sixth-largest city saw more spending last fiscal year by companies making films, video games and other multimedia productions, according to a recent report, but advocates said Arizona will continue to trail states such as New Mexico unless state leaders revive a program offering tax credits for such productions.

For the year that ended June 30, Phoenix saw $13 million in production spending, compared to $7.9 million during the 2011-12 fiscal year, the report said.

Hal Gibson, president of the Arizona Film and Media Coalition, said any gains have been because of commercials and industrial training and education videos, not big-budget productions such as feature films or TV series.

“We get the bread crumbs of the productions here,” Gibson said.

Arizona’s program offering tax credits lapsed in 2010 as state lawmakers grappled with budget deficits. Under that system, a production company would receive tax credits of ranging from 10 percent to 20 percent depending on how much it spent on things like hiring local talent and production crews.

Attempts to revive the program have failed at the Legislature each session since.

New Mexico, meanwhile, has benefited from its tax credits. Earlier this year state leaders raised the state’s TV production tax credit from 25 to 30 percent by approving the so-called “Breaking Bad” bill.

“We can’t compete with New Mexico because our legislation has an ideology that incentives for big businesses, especially Hollywood, is something they will not provide,” said Chris Lamont, founder of the Phoenix Film Festival and an instructor in Arizona State University’s School of Film, Dance and Theatre.

Philip Bradstock, film commissioner with the City of Phoenix Film Office, noted that Disney’s “The Lone Ranger” originally chose Arizona as its primary filming location. As production progressed, Disney replaced Arizona with New Mexico because of that state’s tax incentives and only shot a few scenes in Arizona.

“The whole reason ‘The Lone Ranger’ was filmed in New Mexico and not Arizona has to do with dollars, even though our desert is ideal for a western film,” Bradstock said.

However, Steven Slivinski, a senior economist at the Goldwater Institute, an independent watchdog group that promotes limited government and free enterprise, said said that providing state tax incentives for multimedia productions would be more costly than beneficial.

“All the studies tend to come to the conclusion that most of the jobs that were created were temporary, not long-term jobs,” Slivinsky said.

Slivinski said that a better way to stimulate the economy is decreasing taxes across all industries.

“Do we really need to be throwing money at a handful of short-term temporary jobs when money could be spent in a broader amount of support for all industries?” he said.