02/20/2015 09:31 am ET Updated Apr 22, 2015

Alaska's Film Industry Is Growing, but Budget Crunch Puts Tax Credits in Limbo

Tax credits documented in a new state report show that Alaska's film industry has continued to grow even as state lawmakers prepare to gut the film incentive program.

A bill sponsored by Sen. Bill Stoltze (R-Chugiak) would repeal the state's film production tax credit program. Gov. Bill Walker has also proposed eliminating the film office's only three staffers in the budget he submitted to the Legislature.

Both actions reflect an anticipated state budget shortfall of $3.5 billion or more, linked to plummeting oil prices.

At this point, Alaska's film credit program is effectively suspended because applications are unlikely to be approved, deputy revenue commissioner Jerry Burnett told a Senate committee during the first hearing on Stoltze's bill Thursday.

If either Stoltze's or Walker's proposal to cut the state's film tax program is approved by the Legislature, it's likely Alaska will stop approving applications for new film tax credits after July 1, Burnett said. While the governor's action would suspend the credits, Stoltze's bill would eliminate them completely.

The state will keep processing credits for pre-approved credit applicants, he said. But it's "very unlikely" the state's four-member film incentive commission will approve any new ones before July.