With overwhelming public support at the Anchorage Caucus' public testimony Feb. 18 and a recent hearing before the state House Finance Committee Feb. 23, passage of Senate Bill 23, an extension of the Alaska Film Incentive Tax Credit, would seem to be assured.
Unfortunately, there have been some concerns about the return on investment the state received from television shows and movies that have already taken advantage of the tax credit. While I understand the concerns, I firmly believe that the film tax credit provides a significant benefit to Alaska by creating jobs, training our work force and creating a new industry, all of which adds desperately needed diversity to Alaska's economy.
The Alaska economy has often been compared to a three-legged stool made up of one-third oil and gas, one-third government spending and one-third everything else (fishing, tourism, health care, etc.). If Alaskans want to develop an economy that is sustainable in the long term, it is imperative that we change the model of the three-legged stool by increasing the "everything else" category through economic growth and diversification.
The film tax credit has begun to do this by injecting millions of dollars into our economy and developing Alaska's film industry into one with the potential to bring significant investment to the state. Only money that film companies spend in Alaska is eligible for the tax credit and that spending has jumped from about $745,000 in 2010 to more than $54 million to date in 2012.
Before the tax credit program, the film industry in Alaska was relatively small in scope. Those involved in film in Alaska had very little opportunity to work on a feature production or to acquire their Screen Actors Guild (SAG) and International Association of Theatrical Stage Employees (IATSE) membership.
With big-name films like "On Frozen Ground" and "Big Miracle" being shot here, Alaskans have gained needed experience and training. Thanks in large part to those opportunities, the number of Alaskans with SAG cards has tripled since the tax credit was introduced. More and more Alaskans can now meet the professional experience requirements for the internationally recognized certifications, compete for production work and grow our work force, helping to make the state a more competitive place for filming.
Films produced in Alaska put Alaskans to work -- it's that simple. The jobs and wages not only go to actors and technicians on the film sets but also to the local support industries such as construction and building trades, transportation, food, lodging and entertainment sectors.
Local companies throughout the state have already begun investing in support-related infrastructure and film production facilities because they see the benefits and long-term economic opportunities that the film industry represents. A clear example of this is the state-of-the-art smart stage and green screen facility in South Anchorage that Evergreen Films is building.
However, without a long-term commitment by the state for the continuation of the film tax credit, the emerging film industry in Alaska will be shut down before it has a chance to realize its full potential. There needs to be certainty that film has a future here in order for businesses to continue to invest in the infrastructure needed to support the industry.
A 10-year extension of the film tax credit will provide this needed certainty.
In just a few short years, we have built the foundation of a vibrant new industry. A handful of feature films have come to Alaska, spending more than $74 million in the state since 2010. That money helps create jobs and work force training and spurs new industry in our state. The bottom line: We have the opportunity to assure this new industry will thrive in Alaska.
Bill Popp is president and CEO of the Anchorage Economic Development Corp.
By BILL POPP