One measure Gov. Mike Dunleavy might want to consider down the road is bringing back the subsidy payments for national film crews that set their movies in Alaska and shoot them here.
Alaska had a film support program for many years and it brought visitors to the state by the thousands, big-spending visitors who provided a huge boost to the state’s economy. Alaska’s film incentive program was killed by the Legislature in 2016 after being suspended by Gov. Bill Walker in a time of declining state oil revenues and tight budgets.
At that time, the program cost $346,700 for salaries and expenses of three people in the Alaska Film Office and tax credits of $20 million for the film companies. With my usual caveat that I was an English major, it seems to me that tax credits are foregone taxes that would have been paid if the film crews came here, but without the program they don’t come here and the state has no out-of-pocket cost.
Whether the tax credits could be sold if unused on actual expenditures by film crews is unclear. If not — and perhaps the program could be configured to minimize out-of-pocket costs for the state — then the actual cost of the program would be minimal.
Governor Dunleavy is determined to reduce the cost of state government and to provide a government the state can afford based on its available revenues, which come mostly from oil and gas royalties and taxes and from income generated by the Alaska Permanent Fund. His efforts are noteworthy. Since Alaska has no individual income or sales taxes, for which I remain hugely grateful, the state generates no significant revenue from the film crews who come here. That’s not where the benefit is.
The film program was dropped after a national spurt of criticism from number-crunchers who re-evaluated such programs and concluded they did not pay for themselves. That was certainly the case for most such programs since it was difficult for most states to recover enough money to justify the expenditures. But when it comes to Alaska and Hawaii, the situation is quite different. When film crews come to our state and to Hawaii, they are inevitably drawn to — and build strongly into their films — the incredible scenery to be found in both states.
Film producers bring their own crews here when they shoot in Alaska but they also hire a sizable number of Alaskans who have talents and abilities that are needed by — and augment the capabilities of — those sent here by Hollywood. The total number of Alaskans hired is in the hundreds, if not thousands, and they generate a sizable payroll. When the film crews were being subsidized and came here for their shoots, they had an immediate economic impact in the high millions. That impact put a lot of money into the pockets of talented Alaskans.
When the film program ended there was a noticeable effect on the economy, both on the people who work in the industry and, I believe, on visitor counts. That would need to be verified, but I’m pretty sure the drop was measurable. Very few — if any — major movies have been made here in the last few years.
While the program was active and film crews were coming here, one good friend of mine developed an ability for costume and wardrobe styling. She is often called on to travel the country to work for film producers who recognize her talents. Not everyone can develop the kind of specialized ability needed to attract the interest of film industry hiring agents, but it does illustrate what the possibilities are.
Unless the tax credits could be sold, and that seems unclear, the out-of- pocket cost to the state was relatively small, largely the expenses of the Alaska Film Office.
The benefit to Alaskans hired to work with the film crews is greatly appreciated by those who do the work, but the real benefit to Alaska and Hawaii, which no other states can match, is in advertising the beauty of our states and the tremendous economic impact from their inclusion in movies and the effect on the millions of people who see them.
It is an absolute fact that no film decision-maker can come to Alaska without wanting to take advantage of our incredible setting and including it in his or her movies. Any who did would have to explain to those they report to why they spent the money to come to Alaska and didn’t include it in their work product. The result, my friends, is advertising that brings people here, people who spend lots of money and build the economic foundation of our state. The benefit is far greater than the cost.
Film support offices and subsidies may not be cost-effective for most states. Showing the New Jersey skyline — or a huge swamp — in a film just doesn’t have the same effect on viewers as showing the mountains and glaciers of Alaska. When people see the beauty of Alaska, a substantial number make a mental note to come here when they can. And a large number eventually do. I worked for the visitor industry for a number of years and know how that system works and how effective it can be.
One of the decisions the state would have to make is whether it can afford an advertising program and is willing to invest in it. If the answer to those questions is yes, the subsidy program for film crews is some of the most cost-effective advertising to be found. It can and has brought visitors here by the thousands and they have spent millions of dollars in our state.
Film subsidy programs are one of the best advertising programs available for the states of Alaska and Hawaii. Their situations are unique and they consistently outshine their competitors.
Governor Dunleavy is focusing now on reducing state expenditures, and well he should. But there will come a day when state leaders like Dunleavy will be considering investments again. That may be a few years from now after the governor brings the budget down to an affordable level.
And that will be when the state should consider bringing back the film program. It could pay big dividends.