This is the ninth in an occasional series, The Recessionary Arts. Read more from the series here.
"Sarah Palin's Alaska," last year's hit TLC reality show, featured the Palin family fishing in lakes alongside fun-loving bears, hiking picturesque cliffs, hunting deer, flying biplanes and snowshoeing and dog-sledding through snowy tundra. All overlooking stunning views of Alaskan wildlife and wilderness.
"I understand the uniqueness of this land," Sarah Palin said in a preview for the show. "It's family, it's community. That's what the Alaskan spirit is, and we're proud of it."
The first season cost TLC $3.6 million to produce, but was offset by a $1.2 million tax credit given to producers by the state of Alaska, meaning that Alaskan taxpayers and petroleum revenue essentially fronted a third of the show's production's costs. And though other Alaska-based shows like "Deadliest Catch" and "Ice Road Truckers" also received generous tax credits, Palin's program received the state's largest to date for a reality show.
Not that tax credits for television productions like these is anything new -- states have been offering these kinds of incentives for over a decade. And while the National Endowment for the Arts struggled to break $150 million in annual funding, and other states are eliminating their arts funding altogether, $1.4 billion in tax incentives were offered to the film and television industries nationwide last year, according to the Tax Foundation, a nonpartisan organization dedicated to educating taxpayers on where their money goes.
Mark Burnett, a lead producer of "Sarah Palin's Alaska," is currently looking to sell a second season of Palin's show to TLC. He told the New York Post that it would likely be shot next summer and air next fall, after the presidential election. But Burnett and TLC might have trouble securing a similarly-high tax credit from the state this time around: local Alaskan lawmakers are currently reviewing the original film production incentive, which was signed into law by Sarah Palin herself back in 2008, and will expire in 2013 unless it is renewed. This incentive currently allows for film and TV producers to recover 30 percent or more of the money they spent on production back from the state itself.
Some questioned Palin back in March on the legitimacy of financially benefiting from an incentive which she herself signed into place as governor in 2008. She responded on her Facebook page, writing that those charges were "totally absurd."
Palin did not respond to requests for comment.
As Wanetta Ayers, director of the Division of Economic Development in Alaska, explained, these kinds of tax incentives benefit the state of Alaska, though not always in quantifiable ways. If a successful movie is shot in Alaska, she says, rather than another state doubling as Alaska, it immediately increases exposure.
"We do think there are follow-on benefits for productions to [shoot] in state," Ayers said. "Everything from tourism to people having a desire to relocate here. There's lots of intangible benefits that do result and that we see, anecdotally."
When asked if the state would release information regarding the first season of Palin's program and how the taxpayer money was spent, Ayers said she could not release any more information about the review process until the Alaska Department of Law had finished reviewing "privacy rights with regard to all film production incentives."
The Tax Foundation has been following these state film and TV tax-incentive programs closely since 2010, releasing multiple reports which suggest that most have no direct benefit to state economies, and that the state's returns on their incentives pale in comparison to the amount of money the state spends offsetting production costs.
"It's just not entirely clear you're getting the bang for your buck," said Mark Robyn, an economist with the Tax Foundation. "It's good for the state's image, it potentially increases tourism or something like that ... but how much total benefit comes from that versus what the states lose? That's a big question mark."
Right now 37 states offer tax benefits to film and TV productions, down from a peak of 40 states in 2010. And many of those states are currently in the process of questioning or even abandoning their film and TV incentive programs altogether.
Aside from studies paid for "by economic development authorities and the Motion Picture Association of America," the Tax Foundation reported, "every other study has found film tax credits generate less than 30 cents for every $1 of spending." The foundation cites multiple state film board reports from last year, including the state of Connecticut's, which found a "7 cent return on every $1 spent" on productions filmed in state.
The production companies themselves have also been reluctant to reveal how exactly state taxpayer money is used. This past fall, Joe Tone, a reporter with the Dallas Observer, attempted to uncover how much Texas taxpayer money had been given to "Top Chef: Texas," a Bravo reality show shooting all across the Lone Star State.
According to reports obtained by the Observer, "Top Chef" was paid $600,000 by the state of Texas and the city of San Antonio for integrating the state's brand into the show.
But after Tone made multiple attempts to figure out how exactly this taxpayer money was being spent, the production company behind "Top Chef" -- Magical Elves, based in California -- sued the Texas Attorney General to prevent that information from being released.
Tone summarized the struggle between him and Magical Elves thusly: "Top Chef: Texas costs a lot of money to produce. Your taxpayer dollars are helping produce it. We asked the state to tell us how that money would be spent. The state said yes. The state's lawyers said yes. Top Chef said no."
A QUESTION OF CONTENT
Since so many Texas restaurants and landmarks are shown and explored during this most recent season of "Top Chef," the appeal to Texas lawmakers offering incentives is clear. But should a state be allowed to pick and choose which projects to co-fund with taxpayer money based on their content? And can states take away tax credits because they don't approve of how their state is being portrayed? That's what New Jersey governor Chris Christie did in September of this year when he denied the controversial reality show "Jersey Shore" its $420,000 in credits.
"As chief executive I am duty-bound to ensure that taxpayers are not footing a bill for a project which does nothing more than perpetuate misconceptions about the state and its citizens," Christie said back in September.
A West Virginia-based MTV reality show called "Buck Wild," which follows a group of recent high school grads living in a rural town, was also recently denied state tax credits because its content portrayed West Virginia in a "derogatory" manner, according to that state's film board.
Robyn, the Tax Foundation economist, said a lot of this comes from "state pride" -- politicians and lawmakers want their state highlighted, and to show their state in a positive light. "But you can't just deny [a production] your tax credit because you think their production is stupid," he said. "It brings up a lot of issues with free speech."
It also brings up the issues of how states delegate taxpayer money for what essentially amounts to the branding pursuits of state governments, and how difficult it is for states to measure the quantifiable benefits these productions offer. And though productions can bring in hundreds of jobs for cast and crew members overall, many of these workers aren't local hires. As the Anchorage Daily News reported in November, over $17 million was paid to non-Alaskan workers last year by productions shooting in the state, while less than $1 million was paid to local workers.
A new group calling itself the Alaska Film Alliance (AFA), made up of local filmmakers and other Alaskan industry members, is looking to alter a bill which would extend the tax incentives program another 10 years. This group, along with Alaska Senator Johnny Ellis, announced at a press conference last November that they're hoping to make the program more transparent, to provide better opportunities for local artists and workers, and to establish a more secure infrastructure for future film productions to flourish.
Today, if a production has a budget over $100,000 and wants to shoot in Alaska for any number of days, it will receive a 30 percent tax credit. The only reason a production might be denied, Ayers said of the state's economic development division, is if it's "political or pornographic."
"There's a real value to airtime," Ayers said, "when it features Alaska."
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