As WW reported today, Gov. John Kitzhaber wants to extend and expand a subsidy for film and video production for companies that shoot in Oregon. The governor is proposing to bump the existing credit, which costs $7.5 million annually up to $12.5 million per year.
The way the credit works is that taxpayers buy credits—at a discount of five to 10 percent from face value—and use them to offset Oregon income tax liabilities. Critics, such as Chuck Sheketoff of the Oregon Center for Public Policy say that discount is unnecessary and leaves on the table five to 10 cents of every dollar spent on the program. That could mean $1.25 million annually if Kitzhaber's bill passes, or enough to cover the costs of salary and benefits for more than a dozen school teachers.
Here are the lists of those fortunate taxpayers who not only made enough to have considerable tax liabilities in 2009 [PDF] and 2010 [PDF] but also, thanks to the film credit program, got a five to 10 percent discount on their tax bills.
For those who don't have time to scan the lists, the biggest purchaser of the credits during the past two years was Ryan Finley, of the Internet firm Survey Monkey. Records show he purchased $3.785 million worth of credits for $3.6 million, thus getting a $185,000 discount on his taxes, in addition to earning an admirably large amount of money.
At least one lawmaker, Rep. Ben Cannon (D-Southeast Portland) agrees with critics that if the program is going to continue, it should be converted from its present form of discounted credits into a direct expenditure. That way, the five to 10 percent discount would disappear.
Here's a memo Cannon sent to the budget-writing Ways and Means Committee yesterday: (Note: there is confusion over the amount of subsidy Kitzahaber wants. House Bill 2167, which has the governor's name on it, calls for a $20 million annual subsidy. Cannon puts the number at $17.5 million annually and Tim Raphael, Kitzhaber's spokesman, says the right number is the one in the governor's budget, $12.5 million).