by Tim Carpenter, Kansas Reflector
February 27, 2023
TOPEKA — A contingent of Senate Republican critics delivered negative reviews of a $10 million tax credit to attract film, television and advertising production companies to Kansas and compete against surrounding states handing out economic development incentives to the industry.
GOP Sens. Mark Steffen of Hutchinson, Alicia Straub of Ellinwood and Caryn Tyson of Parker offered thumbs-down assessments of Senate Bill 91, which was passed on a vote of 28-7 and was forwarded to the Kansas House. It would provide a tax credit of 30 cents on every $1 companies spent in Kansas to produce film or digital content. In addition, the bill would set aside $1 million for college film scholarships and $1 million to help develop a film industry workforce.
Steffen said the legislation exposed an “inferiority complex” among economic development fans who believed it important to draw highbrow celebrities to a state better known for crop and livestock production than the fine arts through movie and television.
“Keep tax money here in this state,” Steffen begged his colleagues. “Let’s build up our own state, not some liberal group of Hollywood elitists. Don’t we all in our own mind think of a business in our own Senate districts that could use this money?”
He said the bill was antithetical to conservative principles of small government, less bureaucracy and low taxes. Strong economies were built on those objectives rather than “economic development projects that are just chasing blue sky,” the senator said.
Kansas last had some form of tax incentive for the film industry in 2007 to 2008 and 2011 to 2012 before abandoned, said Sen. Tom Holland, D-Baldwin City.
Sen. Brenda Dietrich, a Topeka Republican, took the lead in defending the legislation. She argued Kansas had fallen behind 37 states offering incentives to companies engaged in film production. This list offering deals included Nebraska, Colorado and Oklahoma. She said Missouri lawmakers were considering bills investing $16 million to $40 million annually in attracting these businesses to that state.
“We’re bumping up against neighboring states like Oklahoma who recently saw over $140 million in film expenditures in their state,” Dietrich said. “We can showcase Kansas if we position ourselves to provide a more favorable business climate to this industry.”
She said all expenditures counting toward the Kansas tax credit would have to be spent within Kansas. Ten percent of employees associated with eligible projects would have to be Kansas residents, expenditures would be reviewed by the Kansas Department of Commerce and the minimum eligible project would have to spend $50,000, she said. In addition, the bill would maintain the investment program for a 10-year period.
Tyson, who chairs the Senate tax committee, said she was opposed to the bill because tax credits earned by a film and television production companies could be sold to another individual or entity also subject to Kansas income tax.
“We have limits for the initial tax credit for a reason,” Tyson said. “I just have grave concern for any transferrable tax credit.”
During Senate floor debate on the bill last week, Straub threw out a trivia question for fellow senators and folks watching the livestream elsewhere. She asked if any knew where “The Wizard of Oz” was captured on film in 1938 and 1939. The suspense ended when she said the movie was shot in Los Angeles — actually, it was Culver City, California — and not in an emerald city or on a yellow brick road in Kansas.
“I’m not sure this bill would do anything to bring films to Kansas,” Straub said. “Other than give away our hard-earned tax dollars that could go to rebuilding the state after we experience a twister like in the movie ‘The Wizard of Oz.’ ”
Under the Senate bill, production work eligible for the state income tax credit would exclude news or sports events, local-interest programs or advertising, instructional or corporate videos or any production of “obscene material or an obscene performance.”
Sen. Molly Baumgardner, R-Louisburg, convinced the chamber to amend the bill to include $2 million for education scholarships and workforce development. Those pieces had been stripped from the bill by the Senate Commerce Committee, but were returned by a vote of 18-17 in the GOP-controlled Senate.
Earmarking that amount of money for job training or college scholarships didn’t sit well with Sen. Kristen O’Shea, R-Topeka. She said the millions of dollars could be more wisely devoted to attracting Kansans to the fields of teaching, nursing and child care experiencing profound shortages.
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