Employment is a difficult number to pin down, the researchers noted, because some people in the business only work part time and many are indirectly associated with film and TV production.
The study said, based on its economic modeling, for every $1 in tax credits given to film and TV producers in Georgia, the return on investment was about $6.30 in additional economic value from both direct and indirect effects. The researchers also estimated the amount of direct value added by all the film and TV production in fiscal year 2022 was $5.54 billion.
The Georgia film office last month released direct spending from TV and film studios in the most recent fiscal year 2023 at $4.1 billion, down from a record $4.4 billion in 2022, likely due to the writers strike that began in early May.
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The industry has grown rapidly in Georgia since the current tax credit system was created in 2008.
The state has since seen billions of dollars in capital investment in TV and film studios, mostly in metro Atlanta. There is now more square footage of stage space in Georgia than New York and is only behind California among all states.
As Frank Patterson, who runs Trilith Studios in Fayetteville told the legislators, his investors don’t receive a penny of the tax credits but their clients like Marvel do.
Patterson said his investors have pumped more than $1 billion in part to build out 32 state-of-the-art stages because of the state’s solid business-friendly reputation coupled with the stability of the tax credit, which he hopes will remain stable. He noted that Trilith, which is also a burgeoning city with apartments, townhomes, single family homes, offices and retail shops, is also planning to spend $700 million more in coming years.
The GSEC study surveyed constituents who have invested in the film and TV business and almost everybody said none of this would be happening in Georgia without the tax credit. All direct rivals to Georgia for business have comparable tax credit incentives including New Mexico, British Columbia and the United Kingdom.
Patterson said while most of the crew members such as set decorators, grips and costumers are now local residents, the next step in the evolution of the Georgia film and TV business is growing the creative side including local production companies, screenwriters and directors.
Another major speaker at the hearing was Hilton Howell, the CEO of Atlanta-based Gray Television which owns the local CBS affiliate and is about to open Assembly Studios with NBCUniversal as its primary client on the former General Motors property in Doraville.
The tax credit, Howell said, “is an undiluted triumph. It has created every kind of job you can’t outsource. No amount of artificial intelligence or Japanese robotic technology to replace the individuals out there. In the film business, you have architects. You have carpenters. You have electricians. Robots aren’t going to paint or build the set. More importantly, these are blue-collar jobs with white-collar wages. That is a big deal.”
Howell, whose company has invested $400 million into building out Assembly, said NBCUniversal has committed to shoot three major productions there when it opens and believes they will spend at least $1 billion alone next year alone.
“When you win,” Howell told the legislators, “you double down. You don’t fold your cards.” He owns TV stations in almost every state and said “everybody wants to be Georgia. Any competition this state has is going to have a film and tax credit.”
There are skeptics in the state legislature about the tax credit, which is uncapped, making it attractive to companies like Sony, Disney and Marvel who can spend hundreds of millions of dollars on a single big-budget movie like “Avengers: End Game.” There was a brief effort to cap the tax credit in 2022, but it was quickly scuttled.
The state is now issuing more than $1 billion a year in tax credits, representing about 3% of the state’s entire budget.
“We want to get an overall feel for what this is doing across the state,” said Republican Georgia House Rep. Chuck Martin to The Atlanta Journal-Constitution after the hearing. He represents the 49th District, which covers Alpharetta, Roswell, Johns Creek, and North Fulton County and had some queries about the study’s numbers. “We’re looking at the costs and benefits. We’re trying to do the right thing.”
“We are trying to take a very businesslike approach” to the tax credits, said Shaw Blackmon, a fiscal conservative Republican House rep from south of Warner Robins and co-chair of the Joint Tax Credit Review Panel. “We appreciate everybody’s investment in Georgia. We appreciate the industry. At the same time, we have to look at the business case and we got a lot of information today. We’ll process it and will peel back some of the data and information provided.”
Stephen Weizenecker, an Atlanta attorney who handles TV and film production financing and brokers tax credits for major big-name streaming and broadcast clients, attended the hearing and thought the Department of Revenue made a solid presentation regarding the new audit requirements passed by the legislature in 2020 to shore up the integrity of the system and reduce fraud.
“I don’t think the legislators have ever gotten a full appreciation to the length and breadth of the Department of Revenue’s work to ensure there are no inappropriate expenditures,” Weizenecker said. “Someone is really minding the store. I hope they really understood that.”