Chicago’s film industry, already depressed, now endures a special indignity: a best picture Oscar for a movie both set in Chicago and named for the city, but made across the border in Toronto.
The slew of Academy Awards for the musical “Chicago” now puts an excruciatingly sharp focus on a shift in film and television production away from the United States and, in particular, away from the Windy City.
In fact, another one of this year’s biggest Oscar losers, the popular romantic comedy “My Big Fat Greek Wedding,” written by Second City veteran Nia Vardalos, also was set in Chicago but filmed in Canada. The movie “Wicker Park,” which is supposed to be set in the city’s Near North Side area of the same name, was filmed in Montreal (though some exteriors were filmed in Chicago last week).
The trade losses in film production have stirred plenty of political intrigue in Washington, where Senate Bill 1278 and House Bill 1278 have been proposed to back federal wage tax legislation that would enable the American film industry to compete with foreign entities such as Canada, Australia, New Zealand and South Africa. The legislation, however, remains stalled on Capitol Hill.
Though the ongoing loss of film production to foreign countries follows a plot line achingly familiar to American businesses in the age of globalization, it has been hard for members of the film industry to convince politicians that their industry is on a par with such once-unchallenged economic powerhouses as the steel and auto industries.
“It is necessary for the federal government to embrace film production and all of the creative industries,” said Rich Moskal, head of the Chicago Film Office. “Despite the obvious needs of the recognized industries of, say, airlines and manufacturing, the country needs to identify with the film industry beyond the celebrity value and look at what it offers in terms of job value.”
And money. Over the past two years, the state of Illinois has reportedly lost more than 50 percent of the almost $75 million it made in production revenues from 2001. It’s a problem that will have to be addressed when Gov. Rod Blagojevich later this month names a successor for outgoing Illinois Film Office director Ron Ver Kuilen — thought to be Brenda Sexton.
Advance reviews mixed
Sexton, ex-wife of Democratic Senate hopeful Blair Hull and who has worked in the commercial real estate business, was an account executive for a local ad agency and also worked as a film critic, has her critics in the local film community. While Sexton’s backers believe her to be a much-needed conduit to Blagojevich on issues that affect the local film community, others active in the industry (none of whom would talk on the record) don’t think she has a strong enough background to understand the importance of issues such as the decline of productions here.
“I can understand the concerns,” said Al Nolan Cohen, a Chicago-area location manager who spent 13 years working for the Illinois Film Office. “But at the same time, in that position, we might be able to benefit from someone who has a relationship with Blagojevich’s team. There is more to running that office than just knowing about the film business. I would hope we can help educate [Sexton] about what makes the office work and things we need to do.”
Dwindling industry
And Cohen welcomes anybody who can help focus attention on the city’s dwindling film industry.
“We’re all just trying to make a living here,” he said. “We’re middle-class workers trying to support our families. But when people think of the film industry, the first people that come to mind are not those of us out there working the equivalent of the punch presses in the factory. Many of us are simply trying to eke out a living in these tough times just like many other Americans.”
Fundamentally, Hollywood is asking for a subsidy for all film, television and cable productions in the U.S. with budgets between $100,000 and $10 million. The proposal calls for a tax credit through which the federal government would pay back a filmmaker a quarter of the first $25,000 in wages paid to each employee on a U.S. production.
The idea is to match the subsidies offered by Canada, which include a tax credit recently raised from 11 percent to 16 percent of wages paid in Canada. In most places in Canada, the effective subsidy is higher because many provinces also offer local tax credits to sweeten the pot.
However, the combination of a swelling federal deficit and GOP control of Congress makes the atmosphere in Washington inhospitable for the legislation.
The subsidy would be costly, even though the expense is limited by excluding big-budget films such as “Chicago.” Congress’ Joint Committee on Taxation estimated the proposed tax credit would cost $4.8 billion in lost revenue over 10 years, according to congressional aides.
But the implications are far broader as an industry that exists to capture the public imagination confronts the problem it terms “runaway production.” The arrival of Hollywood stars for an on-location shoot gives movie production an aura of glamor. From a practical standpoint, a film or television show produced in a U.S. city not only provides short-term jobs for local actors, technicians and caterers, but also can boost tourism over a much longer period.
And then there is civic pride. Talk of filming a TV biography of Rudy Giuliani in Canada provoked an uproar in New York. Texas Gov. Rick Perry lobbied to reverse one producer’s decision to go abroad to make a movie about the Alamo. And Mayor Richard Daley responded to the announcement of the Oscar nominations for “Chicago” by chastising Washington policymakers for failing to protect local film production.
“Too bad it wasn’t filmed in Chicago,” Daley said. “I really believe we have to get our priorities straight in Washington, D.C. . . . You know — `knock-knock, no one is home in Washington.’ They have to get reality. If they listen to people, they will find out what is happening.”
In Washington, the Republicans now controlling Congress have a philosophical preference for broad tax cuts available to all businesses rather than industry-specific tax subsidies.
A spokeswoman for Rep. Bill Thomas (R-Calif.), who now chairs the House committee that controls tax legislation, cited just that concern.
“You have a finite amount of resources and we’ve been focusing those resources on things that have a broader effect on the economy,” said Christine Tinsworth, spokeswoman for the House Ways and Means Committee.
Although congressional supporters of the legislation say privately that Thomas has been the obstacle, he has not taken a public position, unlike his predecessor. “This is something we’re aware of and looking at,” Tinsworth said.
The Republican Party has at times backed tax breaks for specific industries. For example, President Bush’s energy plan includes tax credits for energy producers. But the party is not close to Hollywood.
“With Republicans, Hollywood has not been a favored industry,” said Stephen Moore, president of the Club for Growth, an influential Republican campaign organization.
Still, congressional backers of a tax credit have been expanding their support.
Every state and most large cities have local film boards, which exist to attract film and television production. And they are potent allies in cultivating support from lawmakers in their regions, said congressional aides.
Also, each time another city is passed over for a film set in the community but produced abroad, supporters have a compelling argument to present lawmakers from the region.
“There’s a lot of pride involved in people’s communities, and it’s easy to get senators interested when you tell them about a film set in their community that was filmed in New Brunswick, Canada” said an aide to one congressional supporter.
Hastert on board
Perhaps most important, backers now have a powerful friend in Congress: House Speaker Dennis Hastert (R-Ill.). Aides to Hastert said the Speaker became interested in the issue after it was raised at a luncheon he had with a group of Hollywood directors during a visit to California last summer.
Hastert already was familiar with the impact motion picture production can have on communities because the movie “Road to Perdition” was partly filmed in his district. He took pride in the scenes of local landmarks in the movie.
Aides said Hastert is now pressing to find some way to keep more film production in the United States.
“There just wasn’t time last year,” said Mike Stokke, Hastert’s deputy chief of staff. “We do intend to work to get something done this year.”
The Speaker hasn’t backed any specific proposal. And, ultimately, the legislation may be different than the tax credit the movie industry favors, Stokke added.
Having Hastert on board certainly could help the film industry, particularly in Illinois.
“This is more than just creating tax incentives,” said the Chicago Film Office’s Moskal. “This is about a true partnership where government and the industry work side by side for a mutual benefit.”
