Ill. steps up efforts to lure film money, jobs

By JIM SUHR | Associated Press Writer

Although Illinois' film industry generated a near-record $141 million last year, competition among states for Hollywood dollars is getting cattier. And some lawmakers think Illinois can do more to hog the spotlight.

Looking to bolster Illinois' standing as an alternative to Hollywood, legislators made the state's tax breaks beefier and permanent. As of Jan. 1, qualified filmmakers can get a 30 percent tax credit, up 10 percent, for money spent for Illinois goods -- things like costumes, equipment, trucks and lighting -- and services, including in-state wages.

Such enhancements weren't a factor in last year's numbers, and it's too early to say how they've played so far this year. But Lou Lang, a Democratic state representative from suburban Chicago, wants Illinois to go farther, still fuming that "Chicago" -- the 2002 Oscar winner for best picture -- was filmed in Canada instead of his hometown.

There's little guessing why a bidding war between states and countries takes place: In Hollywood, the cost of doing business sways almost every decision.
And it's potentially lucrative. Over the past three years, Illinois has given away about $74 million in tax credits and received $382 million in production spending as a result.

"It fiercely competitive, there's no question about it," said Richard Moskal, the Chicago Film Office director whose production experience dates to the early 1980s. "Incentives have become so much a part of the business model of how Hollywood goes about deciding where they are going to make their feature films, their television series, even commercials.

"I've never seen it as competitive as it is right now."

Last year, Illinois' payout of an estimated $28.2 million was the ninth-highest among states that offer incentives. That figure is likely to climb this year because of the state's brawnier tax credit.

While Illinois has not lured as much production activity, or given away as much money, as the most aggressive incentive states -- Louisiana, New Mexico, New York and Connecticut -- it has shown a willingness to provide tens of millions of dollars in tax credits.

Illinois' legislative move last year "made things better, but I would like to see what other states are doing and go much farther," Lang said. "There's no reason that the movie `Chicago' should have been filmed in Toronto. That always bothered me."

The Illinois Film Office, an arm of the state's Department of Commerce and Economic Opportunity, says the film industry's $141 million last year was runner-up only to the $155 million from the year earlier.

Now with the state grappling with an $11.5 billion budget deficit, Lang says "it just seems to me that we should do all we can to stimulate our economy."

Rod Blagojevich, the Illinois governor who signed the incentives-boosting measure into law last December just weeks before being booted from office on federal corruption charges, had argued that the tax credit for movies creates new jobs and benefits. And the money filmmakers pour into the economy more than makes up for the credits they get, he insisted.

Blagojevich also voiced frustration that more than a dozen movies set in Chicago were actually filmed in Canada, where taxes and fees on production costs had been cut.

Filmmakers spent $124 million a year in Illinois in the late 1990s, creating more than 25,000 jobs, the state Commerce Department has said. But by 2003, that dwindled to $27 million and less than 8,600 jobs.

Until that point, more than 1,000 television shows and films -- from "The Blues Brothers" and "Risky Business" to "Ferris Bueller's Day Off" -- were filmed in Illinois dating to 1896, the Illinois Film Office said.

Tax credit laws have been on the books in Illinois since 2003, but not without debate. Some Illinois lawmakers and business groups questioned the wisdom of giving Hollywood honchos a tax break when the state raised taxes on businesses like trucking, the sale of natural gas and more. And critics argued that Blagojevich -- a movie buff -- favored his native Chicago, where many of the films were produced, over the rest of Illinois.

Still, Hollywood had a receptive audience in Blagojevich, who in 2005 renewed tax breaks with fanfare, signing the legislation on the Chicago set of Vince Vaughn's and Jennifer Aniston's romantic comedy "The Break-Up." Vaughn attended the bill signing.

The Chicago area went on to land the filming of the blockbuster Batman movie "The Dark Knight" in 2007, pumping nearly $40 million into the state's economy. That included more than $17 million in wages from jobs like set construction, electrical work, makeup and hairstyling, and truck driving, plus $22 million in sales by some 300 Illinois vendors including security providers, cleaning companies and catering services.

Those behind the film and the comic serial on which it was based weren't necessarily attracted by the tax breaks. Instead, they lauded the city's reputation for criminality, miles of dark alleys and architecture the director described as a "really brilliant, fantastic" stand-in for Gotham City.

Films produced in Illinois last year included Universal Pictures' "Public Enemies" starring Johnny Depp and Christian Bale, and Warner Brothers' "The Informant" headlined by Matt Damon. There was also TV's "The Beast," starring Patrick Swayze.

Even bigger tax breaks by Illinois can only help, Lang figures.

Hollywood "is a big industry," he says, "and there's a lot of money to be made and passed around."