The real bounty from Iowa's Hollywood tax breaks: Filmmakers buy fancy new cars!
I've been so busy wading through the wonderfully colorful New Yorker profile of Jim Cameron that I almost missed this sharp-elbowed Wall Street Journal piece about how Iowa's lavish tax incentive plan, designed to lure a host of Hollywood movies to the cornfield-studded state, has ground to a shrieking halt amid what the Journal's Joe Barrett calls "allegations of faulty oversight, poor record-keeping and potentially criminal abuse."
In the past few years, whenever I've phoned a movie producer, they've invariably returned the call from some distant state where they've been shooting their latest film, thanks to a generous tax break plan passed by that state's legislature. It was a great way to knock a few million bucks off a film's budget while being treated as visiting royalty, a big step up from the grumpy reception filmmakers often get when shooting in Los Angeles.
But leave it to Hollywood to kill the golden goose. As the Journal story points out, some of the filmmakers in Iowa managed to exploit the state's largesse by using its 50% tax credit to buy a wealth of pricey goods for themselves. One director, Bruce Isacson, whose film, "South Dakota," received $1.7 million in tax breaks, bought a $61,000 Range Rover and a feather bed. Another director, Donald Borchers, who shot a "Children of the Corn" remake in the state, purchased a $67,000 Mercedes-Benz.
While its nice to know that the movie industry still has a few old-fashioned hedonists who prefer gas guzzlers to eco-conscious Priuses, the sight of Hollywood types helping themselves to personal tax breaks didn't go over so well in Iowa. The governor has suspended the tax credit program, the state film program's director has been fired, and his bosses at the Iowa Department of Economic Development resigned. The state attorney general is moving ahead with a criminal investigation.
My favorite quote comes from Isacson. When asked to justify his Range Rover purchase, he explained that the SUV doubled as his office on the set, saying, "I could have rented an RV." I guess that means he was really doing what all great Hollywood filmmakers do -- making a big sacrifice for his art.