State reveals movie wage data; 'Big Miracle' paid $4 million to Alaskans
This is a positive development. It provides a more accurate picture of the economics and points to ways in which the program can be improved.
Encouraging the development of a film industry in Alaska does not come without cost. The evidence may show that the cost is worthwhile, given the prospects for new jobs, businesses, tourism, etc.
The data released Friday demonstrates that some productions deserve a thumbs up for spending in Alaska. Others don't.
The Legislature and the Parnell administration need to tighten the rules and find ways to keep more of the benefits in Alaska.
For instance, the California producer responsible for the "Baby Genius" series and a Jon Voight thriller, made a minimal investment in Alaska and collected $8 million in subsides over the last couple of years.
Had the Parnell administration acted more promptly in releasing the wage and salary data, perhaps the Baby Geniuses could have been stopped in their tracks.
But now the ingenious work of Steven Paul is going to become the poster child for more state controls or for those who want to do away with film subsidies.
The "Big Miracle" whale movie has a better performance record.
The LLC paid $4 million in wages to Alaska residents and $13 million in wages to people from Outside. It qualified for a subsidy of $9.6 million.
The wages paid to people Outside, including the stars and the production people, are counted as an Alaska expenditure.
The "Big Miracle" paperwork says that 140 full-time equivalent Alaska jobs were created by the movie. (Just using the direct wage data, excluding other spending, the jobs would have been in the $30,000-a-year range.)
Now that this information is in the public realm, the state can refine its reporting forms to show that those Outside wages are not really an Alaska expenditure, though for purposes of the tax credits, they are a qualifying expense.
Allowing the movie star and executive money to be counted as an Alaska expense is what attracts the productions here in the first place.
Of the $29 million listed as the "Alaska spend" for the whale picture, $13.5 million went to people Outside directly. In addition, the movie producers spent $593,000 on interstate transportation and $100,000 on instate transportation.
The other big expenses include $7.1 million on "location fees, facility rental purchase, equipment rental/purchase" and $2.7 million on food and lodging.
The "Big Miracle" tax credit translates into a reduction in state general funds of $9.6 million, as the tax credit can be sold, at some discount, to a company that pays state taxes.
A solid analysis of the economic impact of the "Big Miracle" filming in Alaska has yet to be made. I hope that the McDowell Group updates the document it released a year ago about the economic impact of the film, as that report was prepared without including the cost of the subsidy.
On "Baby Geniuses 5," the wages paid to people Outside totaled $5.2 million, while $235,000 was paid to Alaskans, with 14 days of production in Alaska. On "Baby Geniuses 4," the wages to Outsiders hit $5.4 million, while $191,000 went to Alaskans. On "Baby Geniuses 3," they paid $6 million to Outsiders and $320,000 to Alaskans. The same producer made the Jon Voight picture "Ghost Vision," a film that generated $5.6 million in wages to Outsiders and $275,000 to Alaskans.
On those productions in total, more than $21 million in wages went to people Outside, while about $1 million was paid to Alaskans. The total subsidy for those productions was about $8 million. The rules need to be changed to improve the economics for Alaskans.
The "Baby Geniuses" films, at least the portions made in Alaska, were done in a converted Anchorage warehouse in front of a green screen, according to news reports last year.
I suspect that the reason the most recent two proposals for additional subsidized projects from producer Steven Paul were rejected by the Parnell administration late last year was because of that low level of real spending in Alaska on his earlier films.
"At this time it is not in the best interest of the Alaska film industry, Alaska workers and the Alaska economy to extend a production incentive," Dave Worrell of the Alaska Film Office wrote to Steven Paul of Kid Play Entertainment LLC on Dec. 16.
Paul had applied for the tax credits for these two new unnamed productions on Nov. 16 and Dec. 1. He withdrew a request for a third unnamed production in November.
One TV show in which the wages paid to Alaska residents exceeded the wages paid to Outsiders is "Sarah Palin's Alaska," in which $1.1 million was paid to Alaska residents and $1 million was paid to Outsiders. The subsidy to "Sarah Palin's Alaska" was $1.2 million.The producers spent $367,000 on instate transportation and $424,000 on food and lodging.
On "Deadliest Catch," there is little money paid to Alaska residents. The state subsidy for season seven was $786,000, but only $44,000 was paid in wages to Alaskans. The wages to Outsiders were $1.3 million. The TV show spent close to $1 million more on food, lodging, locations, transportation and "other expenses."
On "Deadliest Catch," season six, the wages paid to Alaskans totaled $19,000, while $1 million was paid to people from Outside.
The first season of "Alaska State Troopers" qualified for a subsidy of $30,709. The show paid no money to Alaska residents and $66,204 to people who are not from Alaska. The second season also shows no wages and salaries to Alaskans and a subsidy of $93,000.
The state subsidy for "ice Road Truckers," season five, was $492,000. The Alaska wages were $295,000. The show spent more than a half-million on location expenses, food and lodging, etc. For season four, the show received a subsidy of $899,000 and paid $103,000 in wages to Alaskans and $1.3 million to Outsiders.
On every production there are expenses for food, lodging, transportation and locations, but the major costs are wages and salaries.
Seems to the state needs to make a profit and at least the tax money back.
They are making 20 or more times cost selling our royalty oil at OPEC price. About 2.50 per gallon.
All you capitalist eat your heart out! The socialists have better return on investment. To bad they can't that well with PF investments .... 20 to 1 makes me start wondering why fuel is $4 per gallon and electricity is two bits per kw.
Using return on investment as guide post, the state should be paying me to use fuel oil and electricity.
That is hope change and communism I can believe in.
$3.50 of every electricity bill SURCHARGE GOES TO ALASKA REVENUE.