TAX NEWS - June 2010

Ehrlich would boost credit for film, TV productions

Republican former Gov. Robert L. Ehrlich Jr. said Wednesday that he would lure television and film productions to Maryland by expanding a state tax credit that has been cut since he left office.

After meeting with film and television industry reprsentatives in Hunt Valley, the onetime actor -- he made a cameo appearance as a State House security guard in "The Wire" -- said he would budget $7 million for the film production tax credit that was created during his administration.

The state budgeted $6 million for the tax credit under Ehrlich; the current figure is about $1 million. As a result, the Ehrlich campaign said Wednesday, no major production has come to Maryland in three years.

"Unemployment has doubled in Maryland since 2006 and little has been done by the O'Malley Administration to turn the economic tide," Ehrlich said in a statement. "Cutting this tax credit is no different than cutting jobs. We all benefit from the jobs production companies bring to Maryland, and the money they spend on salaries, hotel rooms, restaurant meals, transportation, security, even dry cleaning and entertainment. It's an expenditure that produces a huge return on a small investment, and we ought to return Maryland to the forefront of TV and film production. When I'm governor, we will."

His campaign quoted a Sage Policy Group report indicating that the industry generated $158 million in direct and indirect economic impact to the state in 2006.

A campaign spokesman for Democratic Gov. Martin O'Malley referred questions to the state Department of Business and Economic Development. Hannah Byron, the assistant secretary of business and economic development for tourism, film and the arts, said it was the legislature that cut the tax credit.

Byron said the $6.8 million that O'Malley requested for fiscal year 2008 was cut by the legislature to $4 million, and the $2 million he requested for fiscal 2010 was cut to $1 million.

"There have been some pretty difficult budget decisions that needed to be made," Byron said. "The administration has been willing to commit additional funds in order to secure productions that would have a significant employment or economic impact. Unfortunately, none of those productions have come to fruitition, for a number of reasons."

She said the state is now in discussions with the producer of "a major project that will have a major impact." She said could not divulge details.

In a release Wednesday, The Ehrlich campaign said "TV series like 'The Wire' and 'Homicide,' as well as blockbuster films like 'Ladder 49' were shot here during the Ehrlich Admininstration, thanks largely to the tax credit" that was created in 2005.

In fact, Homicide was filmed in the 1990s, The Wire was first broadcast in 2002, and Ladder 49 was released in 2004 – all before the credit was created.

Asked about the claim, Ehrlich spokesman Andy Barth called it "an inadvertent and unintentional error," and said the campaign would correct it in all future communication on the subject.