When the cameras roll in Utah, the money rolls into the state.
That’s the essence of an argument for more TV and film production tax credit and rebate incentives made during a state podcast and a recent legislative committee hearing.
“This [incentives] program has been incredibly successful and has provided so much impact for the people and the communities of Utah,” Jeff Johnson, president of the Motion Picture of Association of Utah, told the Economic Development and Workforce Services Interim Committee at its October meeting.
“Utah has fantastic locations, a large professional film crew, many talented actors and a turn-key infrastructure. This infrastructure combined with incentives have brought productions who have spent hundreds of millions of dollars that would not have come to Utah without the incentive program.”
But the amount of film and TV production spending in the state has leveled off since 2017 as companies have turned elsewhere. Thirty-two other states and 100 nations have production incentive programs, and a report by consulting company Olsberg SPI says that Utah’s leveling-off “relates to the underlying incentive budget.”
Virginia Pearce, director of the Utah Film Commission, said on the Governor’s Office of Economic Opportunity podcast that Utah has the vital elements attractive for productions — crew, infrastructure, locations and incentives — but Utah’s incentives budget is one of the nation’s lowest, capped at $8.3 million annually. In contrast, New Mexico’s is $100 million and California’s is $600 million.
“While we are competitive, we do lose a fair amount of projects to other states,” she said. “‘Yellowstone’ is the most well-known example in the last few years. They would love to be in Utah but moved to Montana because we didn’t have the tax incentives they needed and Montana did.
“That’s what’s been interesting for me to learn and I think we’re trying to just educate people that it is part of the [companies’] business model, and if we want to be in the film industry in Utah, we have to have that incentive.”
“Our incentive,” Johnson said, “is really good and we are doing a lot with less, and if we can augment that, we can do so much more. We don’t need to be those other states, but we definitely need to increase that so we can attract some of these bigger, bigger productions.”
Bolstering their case is a study by Olsberg SPI showing the economic impact of the Utah incentives, in place since 2011. The report indicates that fiscal year 2021 TV and film production spending in Utah was about $66 million.
Eleanor Jubb, senior consultant at Olsberg SPI, said that seven years of data indicates that for each dollar Utah spent on a production tax credit, the state saw $5.10 returned to the Utah economy. The incentive during that time generated nearly $670 million in net output. The total “gross value added” measure was $280.9 million, or more than $40 million a year.
“So that’s significant and obviously shows a really positive picture in terms of some of that return on investment,” she said.
Leon Forde, managing director of Olsberg SPI, said the average Utah incentivized project spent $2.7 million in fiscal 2021, up from $1.8 million in 2005. Episodic TV production now accounts for 87 percent of the state’s total, up from only 3 percent in 2011.
A survey that is part of the initial study also shows that Utah’s incentive was very important to most companies’ decisions to produce in Utah. The most frequent response was that that the tax incentive was the most important factor. The survey shows that the incentive was responsible for between 86 percent and 100 percent of production spending in the state. All surveyed production companies based outside Utah indicated that no production would have happened in the state without the incentive.
The report also confirms what incentive advocates have said for years: that production spending benefits a broad swath of Utah’s economy. It shows that 43 percent was spent on crew wages and 7 percent was spent on cast and extras wages, while 4 percent was spent on hotels, 4 percent on transportation, 2 percent on restaurants and catering, 11 percent on equipment purchases and 6 percent on retail purchases.
“A lot of that budget spend is moving to other parts of the economy in Utah,” Jubb said.
Some of the legislative committee discussion focused on how productions benefit rural Utah. Over a five-year period, about a quarter of filming days were in rural locations. Last year, the number of production permits granted for rural shooting accounted for 58 percent of the state’s total, Pearce said.
Both Pearce and Shawn Milne, co-chair of the Rural Utah Film Coalition, said that the average production spends $150,000 and $300,000 per day.
“As you know, that would be a pretty big infusion of revenue for our communities,” Milne told the legislative committee. “Most of this comes during the off-season, which keeps our hotels and restaurants, and the people they employ, busy. It helps to round out their season.”
The study also noted the impact of productions on Utah’s tourism industry as many visitors were lured to the state mainly by film or TV shows shot here. Film tourism resulted in 2.2 million Utah trips and an estimated $6 billion in value for the state over the past 10 years.
The committee will discuss the matter further at its November meeting, after a final report from Olsberg SPI is completed. A few legislators wondered if the incentives program should have a “targeted” incentive for productions taking place in rural Utah.
The initial Osberg SPI report is available at https://le.utah.gov/interim/2021/pdf/00003655.pdf.