'Hunter Killer' pulls out of Alaska as Senate votes to kill film subsidy

JUNEAU -- Legislators looking to kill Alaska's film subsidy program have driven away the big-budget Hollywood movie "Hunter Killer" and may have brought a halt to a burgeoning state industry, critics said.

The Alaska Senate voted 14-6 Monday to end a tax credit program that has paid out tens of millions of dollars aimed at attracting the film and television industries, and their associated economic activity, to the state.

"Hunter-Killer," which recently announced Willem Dafoe as one of its leads, was to have been the biggest production ever filmed in Alaska, following on the heels of Drew Barrymore's "Big Miracle" and the serial killer movie "Frozen Ground" with Nicolas Cage and Vanessa Hudgens.

Sen. Johnny Ellis, D-Anchorage, has been the film program's chief proponent and fought its repeal Monday. He said "Hunter Killer" is no longer going to be filmed in Whittier and would have spent more than $50 million in Alaska.

"What a tragedy the story of 'Hunter-Killer' is," Ellis said.

Alaska companies and employees had been lined up to work the production, he said.

Gov. Bill Walker had already suspended issuing new tax credits under the program, and Ellis said there was no reason to formally eliminate the program and prevent it from being resurrected if state finances improve.

"This bill saves no state dollars. All it does is send a very negative message that Alaska is permanently closed for business," Ellis said.

Senate Bill 39 was sponsored by Sen. Bill Stoltze, R-Chugiak, who said the state couldn't afford the tax subsidies the program pays out. While structured as a tax credit, the industry pays no taxes in Alaska, so the credits are sold to companies that use them to offset corporate income taxes.

Stoltze said it wasn't his bill but the decision by the governor to suspend the program that led to the loss of the movie and reluctance of other productions to come to Alaska.

"The governor's announcement, I think, is probably a bigger crippling blow" than Senate Bill 39, he said.

Stoltze opposed creation of the film subsidy in the first place and has since said it brings Hollywood liberals to Alaska who weigh in on local issues. "Left-wing blogs" and "left-wing media" promote the program, he said.

As his bill was heading for passage along party lines Monday, with Republicans in favor and Democrats opposed, Stoltze took a more somber tone.

"It's not a frivolous thing that we're doing here, it's a necessary action" because of budget deficits, he said.

He denied having "any level of enjoyment" in the bill's passage.

Following the bill's passage in the Senate, it now goes to the House of Representatives for consideration, but opponents said the bill has already had its effect.

"The message is loud and clear that they don't want the film industry here," said Kelly Bender, president of the Whittier Chamber of Commerce.

Bender, who owns a charter boat and a coffee shop and restaurant, said she and every other business owner in Whittier saw potential in "Hunter Killer" being filmed there and called the passage of the bill Monday "a major disappointment."

The Cold War submarine movie would have brought some 200 employees to town at peak production. Whittier has about 250 year-round residents, and most of the movie production would have been before the tourist season began, with some additional work after the season in the fall.

Film industry worker D.K. Johnston said he'd been expecting to work on the "Hunter Killer" production but will now be looking down south for work.

"They just signed my pink slip," Johnston said after Monday's vote.

Johnston, 31, was named this year to the Alaska Journal of Commerce's "Top Forty Under 40" list of promising young Alaskans.

The University of Alaska Anchorage graduate said he'll likely have to look to Louisiana, Denver or Vancouver, British Columbia, for work.

"I would have loved to call Alaska home. Unfortunately, our state Legislature has created such an unstable business environment that I won't be able to," he said.

Democrat Ellis said other jurisdictions competing with Alaska to lure business from California will be cheering passage of the bill, as will Hollywood itself. Those who don't like the industry, or the reality shows that sometimes used the credits, shouldn't celebrate end of the tax credits, he said.

"Economic interests in Southern California will be very glad if Alaska cuts off its nose to spite its face," Ellis said.

House Speaker Mike Chenault, R-Nikiski, late Monday referred Senate Bill 39 to a single committee in the House, possibly speeding its passage there.