Say goodbye to Hollywood? Why lawmakers are considering putting Minnesota’s film board out of business

Photo by Chris Large - © Copyright 2014, FX Networks
Martin Freeman in a scene from the Emmy-winning series "Fargo," shot in Canada.

In the 2014 FX series “Fargo,” police officer Molly Solverson tries to solve a series of grisly murders that start in her hometown of Bemidji, Minnesota. After a panning shot takes in the Bemidji water tower and storefronts on Main Street, viewers first meet their heroine standing on the side of the road in a desolate, snow-covered field examining a car accident. In a thick Minnesotan accent, Solverson makes small talk with the city’s police chief about the weather.

“Cold enough for ya, chief?” she asks.

“It’s supposed to get down to negative 10 later,” he says.

“I heard that,” she replies. “Don’t much like the sound of negative.”

The setting, and the dialogue, sure look and sound like typical small-town Minnesota, but it’s not. The scene was actually filmed in Calgary, a city of about 1 million people nestled in the foothills of the Canadian Rockies. Unlike the 1996 Coen brothers’ film by the same name, which was shot in locations across Minnesota, the TV version of “Fargo” is almost exclusively filmed out of state, in part because of generous tax incentives in Canada.

It’s not uncommon these days for Minnesota-set films to be shot somewhere else. Once home to one of the country’s leading film incentive programs, Minnesota’s rebate program for film and TV productions eventually became one of the smallest, the victim of persistent budget deficits of the 2000s. Now, the Minnesota Film and TV Board, which doles out incentives through the state’s “Snowbate” program, is facing the prospect of not existing at all.

House Republicans have proposed to not only strip out funding for the organization in the next two-year budget, they want to eliminate the state’s incentive program altogether. On the other end of the spectrum, Democrats in control of the Senate have proposed to fund the program at $13 million over the next two years — the most the board has received in its history. But even that proposal has received a rocky reception this session: It was nearly stripped out of a Senate jobs package on a 30-31 vote in order to put more money into rural broadband.

Lucinda Winter

Lucinda Winter

“I’m very pragmatic about it … but I would say I’m distressed,” said Lucinda Winter, the Minnesota Film and TV Board’s executive director. “The film board has been around for more than 30 years, and if they get rid of it we will be the only state other than North Dakota without one.”

Three decades of wooing Hollywood

In 1983, it was DFL Gov. Rudy Perpich who first pushed to put state grant money toward the Minnesota Film and TV Board (then it was called the Minnesota Motion Picture and Television Board). The idea was to try to attract film and television jobs to Minnesota — most states had film offices, but only a few states like New York and California had systems in place to entice the film industry.

Minnesota had (and has) a few natural advantages: A strong arts and theater community in a mid-sized metropolitan area, easy access to rural landscapes, and lots of snow, often needed in productions but not exactly abundant in places like California.

The nonprofit film board — a rarity; most programs are run by the state  — was given grants to facilitate relationships with productions and help them navigate what Minnesota had to offer. It had some of its biggest successes under Republican Gov. Arne Carlson in the 1990s, when films like “The Mighty Ducks,” “Fargo,” “Jingle All the Way” and “Grumpy Old Men” were filmed here, creating hundreds of jobs in the area and boosting spending at nearby businesses and on things like hotels and restaurants.

Based off those successes, the 1997 Legislature created a film jobs program, which provided partial reimbursement to film producers for wages paid to Minnesotans working on productions in state. That eventually morphed into the current rebate program, which the Legislature funds through a grant to the Department of Employment and Economic Development (DEED). DEED, in turn, gives that money to the film board to run the Snowbate program. If productions can prove they are generating economic activity in the state, they can receive between 20 to 25 percent reimbursements on production-related costs.

Frances McDormand in a scene from the 1996 film "Fargo"

© 1996 Metro-Goldwyn-Mayer Studios Inc.
Frances McDormand in a scene from the 1996 film “Fargo” shot in Minnesota.

For a few years, Minnesota was ahead of the game in offering incentives, but it didn’t take long for other states to catch on. Today, 37 states and Washington, D.C., offer a production tax credit or rebates to producers of feature films, TV shows, documentaries and commercials.

When Minnesota faced near-constant budget deficits in the 2000s, however, funding for the board and the Snowbate program dried up. During that period, funding was never more than $2 million for every two years. And though big productions like “North Country” and the Coen brothers’ “A Serious Man” were filmed in the state during that period, film projects tended to be few and far between.

At the same time, incentives in other states like Michigan skyrocketed. The state offers up to a 35 percent rebate on production-related costs, capped at $50 million over two years. Some states have no cap at all on their rebates.

In 2013, though, with the economy on the mend and the DFL at the helm of state government, the film board was able to make the case that it could help generate jobs in the state again — if it got more funding. The board got $10 million for 2014-2015, the most it had received than all its previous years combined.

Starting to ‘rebuild’

The board came to the Legislature this year expecting a very different reception from the one it received. With a nearly $2 billion budget surplus this session, the board originally hoped the Legislature would boost its rebate program to $20 million for 2016-2017. And they were ready to make their case: Since the program got new funding, the Minnesota Film and TV has committed $4.6 million to 72 certified projects. They say that has generated an estimated $25 million to $30 million of production dollars spent here, 48 full-time jobs and $3.5 million in wages.

The funding helped them snag independent productions like “Dear White People,” which was filmed all across the metro and was a hit at the Sundance Film Festival. And later this summer, Netflix will swoop into Duluth to do filming on a new series about comedian Maria Bamford. These were all thanks to the new funding in the Snowbate program, said the Film and TV Board’s Winter.

An image from "Dear White People," the last movie filmed in Minnesota

© Ashley Beireis Nguyen, Courtesy of Sundance Institute
An image from “Dear White People,” the last movie filmed in Minnesota

If funding goes away or gets cut back, Winter fears other projects could be in jeopardy. Take the HBO series “Stillwater,” a one-hour drama that will follow a New York City cop who relocates his family to a small town in Minnesota. The actual city of Stillwater — with its iconic lift bridge over the St. Croix River and historic Main Street — is in the running to film the pilot of the series. But if the Film and TV Board can’t prove it can provide incentives long-term, there’s almost no chance the show would consider shooting here, Winter said.

“This is a worldwide business, we are competing with everyone,” she said. “What worries me most [about the House proposal] is the signal it sends beyond our borders to the industry we’ve tried so hard to get back. We just re-invested this money in our program and it’s really starting to work now. It’s really distressing to me that we would abandon it.”

A lack of legislative direction

Part of the reason the board has been forced to fight for its survival is a recent report from the Office of the Legislative Auditor [PDF]. In 2014, the report found, the film and TV board brought 30 productions to Minnesota, which received $1.2 million in incentives, and spent more than $5.5 million in the state, providing work for nearly 500 residents. “Dear White People” reported over 1,300 workdays for staff, the report found.

But the audit also noted that many of those film industry jobs are temporary. The 496 Minnesotans who worked on rebate-backed projects in 2014 worked a combined 7,225 days. In terms of full-time equivalencies, this amounts to 28 to 35 jobs. “It’s hard to find that there were new, permanent full-time jobs created,” said Legislative Auditor James Nobles.

Auditor Jim Nobles

Yet Nobles reserved his biggest criticism for the Legislature. He said lawmakers have funded the program at inconsistent levels over the years and had little debate over what it wants out of the group. Does the Legislature want to attract big Hollywood films, or does it want to create a smaller, local industry here, he asked.

“That’s a big decision to make, you have to decide first what you want to do and then how you want to fund it. It takes a significant amount of money to attract big films,” Nobles said. “I think legislators need to understand that what we are accomplishing right now is not necessarily creating new jobs. We are providing enough funding to really give some extra hours and some days of work to people that are doing various functions in that industry, and maybe that’s enough? The big issue for us is we just don’t believe this has been adequately discussed and debated.”

Rep. Pat Garofalo

Rep. Pat Garofalo

That part doesn’t look likely to change. Republican Rep. Pat Garofalo, whose omnibus jobs and energy bill carries the language that eliminates the rebate program, didn’t want to comment on his reasons for doing so. “I understand [the House and the Senate] have our differences,” Garofalo, a Republican from Farmington, said. “I would just say that I look forward to working with the governor’s office and the Senate” to resolve the issue.

Sen. Dick Cohen, DFL-St. Paul, helped fund the board as a member of the House back in 1983. He said the House action marks the first time the board has been a “partisan” issue, and could hit the program at a time when it’s starting to rebound. “You can’t be out of the game as long as Minnesota was and expect it to come back overnight,” he said.

Comments (19)

  1. Submitted by Richard Voorhees on 05/04/2015 - 11:13 am.

    Gone to New Mexico

    The Albuquerque Journal estimates the financial advantage of film and television production at $1.5 billion to the state. Ah, well, there is a Republican governor and a Republican majority in the House. Perhaps that is the reason for the success.

    • Submitted by Logan Foreman on 05/04/2015 - 05:38 pm.

      Try again

      Probably not the reason for success. More likely a very rare species of republicans that will be extinct shortly.

    • Submitted by Jonathan Ecklund on 05/07/2015 - 10:55 am.

      I lived in New Mexico from 98-02, and my wife is from there. The film board in NM was heavily pushed under governors Johnson and Richardson. Governor Martinez has repeatedly tried to take resources from the film board or eliminate it entirely. Most likely because it doesn’t produce enough oil.

  2. Submitted by Ray Schoch on 05/04/2015 - 11:16 am.

    Sigh

    In a media-driven world, one in which even they participate, it’s a shame to see the same penny-wise, pound-foolish policies that the GOP usually applies to other areas of the economy directed toward an area that might even be very good for the state over the long haul. There is truly no reason *not* to try to attract filmmakers here, whether for indie productions or Hollywood blockbusters. I don’t think it ranks up there with childcare or highways on the state’s list of priorities, but it ought to be on the list, nonetheless…

  3. Submitted by Joel Stegner on 05/04/2015 - 12:02 pm.

    MN Film Board

    It really isn’t “Minnesota legislators” but “Republican legislators – be honest about this. The modern Republican doesn’t care for the arts, because it represents Hollywood. The modern Republican doesn’t care about Minnesota artists, because they tend to be liberal. They don’t care about temporary jobs, because they don’t directly make any money off of the film business – it is work for actors,designer, caterers, the hospitality industry. Movie making tends to benefit Minneapolis and St Paul, which they currently are trying to punish for imagined offenses.

    Somehow they can live with massive subsidies for the kind of businesses they own (cash in their pockets), but not so much for money going to other people to sustain our creative community, which is one of the reasons we are not just a cold Omaha or Sioux Falls. They want to turn every public good into a private profit, and take money away from people who do the work (e.g. the so-called tip credit) to reward people who don’t need the money by any stretch of the imagination. Blaming all legislators for something that only one party is advocating is simply dishonest.

  4. Submitted by Dennis Tester on 05/04/2015 - 01:01 pm.

    Crony capitalism

    It’s not the role of government to give $10 million of taxpayer money to a non-profit board who then gets to pick and choose who will get to spend it on what project. I’m sure that’s how it’s done and that’s just fine with some people, but that’s not an appropriate use of taxpayer money, imho.

    If the people in favor of this are admitting that tax incentives are needed to attract business because our taxes are too high, then the fair and “equitable” solution is to lower taxes for all businesses, not just your cronies.

    • Submitted by Logan Foreman on 05/04/2015 - 02:21 pm.

      Then end all subsidies and tax breaks

      For every business first, incuding corporations, for profit education, farmers, and LGA.

      • Submitted by Dennis Tester on 05/04/2015 - 03:26 pm.

        Of course

        and eliminate foreign “trade missions” while we’re at it, where companies who have friends in high places are invited to go along and their competitors are not.

        • Submitted by Logan Foreman on 05/04/2015 - 05:34 pm.

          And eliminate any federal or state monies

          Directed to the benefit of persons who provide that money to any entity that prospers from those monies and also makes donations to any political party

  5. Submitted by gary severson on 05/04/2015 - 01:15 pm.

    Fargo

    The desolate opening scenes in Fargo were actually shot in ND 40 mi n of Grand Forks even though ND doesn’t have a film Bd fund.

  6. Submitted by John Ferman on 05/04/2015 - 01:22 pm.

    Holy Smokes

    Even Mississippi has a filming rebate program – and it is a Red Red State.

  7. Submitted by Elsa Mack on 05/04/2015 - 02:24 pm.

    Temporary jobs

    I worked for a film production company for about four months (until shooting in Minnesota was finished and the company packed up). It’s true that these jobs are “temporary”, but…

    a) These are quite well-paying as temp jobs go. I was just out of college and was happy to have that job—I was making $750 a week for entry-level office work, much more than I later made at my first full-time job (though I can’t recall if I had health insurance, possibly not). Plus it was work experience that I needed in order to get that first full-time job. So let’s not sneeze at temp work. It sure beats getting nothing.

    b) For people in the film industry (from what I saw), it is normal to work on one production until it’s done, and then move onto the next. While my film job was more like a “temp” job, for people working on the production—the actors, the production and locations people, etc.—it really makes more sense to think of these jobs as contract work or freelance work rather than “temporary”.

    I would add that the film I worked for, a relatively small production, had a budget of several million dollars and included several shots of the city in various locations. The actors, the director, the production management people, all came from LA, lived here for several months, visited our sites, stayed in our hotels and ate in our restaurants and drank in our bars. The film industry can help to raise the state’s profile in important ways, if we work with them to bring them here. We’re willing to do that for sports teams, apparently—why not for film?

  8. Submitted by Connie Sullivan on 05/04/2015 - 03:23 pm.

    Republicans and a lot of Democrats agree with the dubious claim that subsidizing professional sports (football, basketball, hockey, baseball, soccer) by providing public money to these private endeavors is a good thing. Even though stadia and games provide jobs for very few people, and the construction jobs involved are the definition of temporary jobs.

    But, the slash-and-burn Rep. Garofalo doesn’t have a word to say in defense of his cutting of programs like the one that helps TV and movie jobs do their work in Minnesota. He has no explanation. Anytime a politician refuses to explain, or cannot explain rationally the reasons behind a move, you can be sure that he’s proceeding by ideology alone.

    How absolutely negative the GOP is!

  9. Submitted by Bill Willy on 05/04/2015 - 04:19 pm.

    All cuts, all shifts, same answer

    “Republican Rep. Pat Garofalo … didn’t want to comment on his reasons for doing so.”

    That’s pretty much the way every House Republican responds to any question as to “Why?” the cuts to all areas this year, from Matt Dean’s MinnesotaCare-B-Gone stroke of genius, to P. Garofalo pilfering another 1/2 billion from the Unemployment Insurance Trust Fund (just as 1,200 Rangers are about to loose their high-paying taconite jobs), and cutting 95% of this biennium’s “Statewide Broadband” project (until Jim Knoblach added less than half of it back because it might look a little cheesy to outstate folks still trying to download their favorite NetFlix telemedicine episodes with their dial-up connections), to you name it: If a program has a price tag, it needs to be cut.

    But if Pat, or Matt, or any other House Republican was strapped into his or her chamber chair and given a shot of truth serum, the televised answer would most likely be, “Because we need every dime we can scrape and shift together to pay for our Surplus Plus-size $42.6 Billion Biggest Budget in Minnesota History that includes Mezeppa Steve Drazkowki’s Perpetual Business Property tax cut, the Desperately Needed Estate tax relief, and our Tax-Free $7 Billion Roads and Bridges Plan What Am!”

    And there was this little phrase in the article: “… the victim of persistent budget deficits of the 2000s” which, it appears, is exactly where Republicans want to get back to ASAP. As far as that goes, they’re already there – – cutting and shifting like there’s a $6.2 billion deficit crisis again – – working with all their mighty might to drag the rest of us back there with them.

  10. Submitted by Paul Udstrand on 05/07/2015 - 08:50 am.

    Still a better ratio than stadiums

    We’re spending $600 million to “create 600 FTE’s working on the stadium, and you can’t build new stadiums every year. That’s around a million bucks per FTE compared to $300 thousand per Hollywood job. But the truth is republican just hate Hollywood and show business because they see them as a big pool of liberals for the most part.

  11. Submitted by Peter Bean on 05/13/2015 - 01:00 am.

    Keep it rolling

    Please keep the incentives going. Sure competing with other states is hard, but at least offer something so filmmakers like me from MN living in LA can bring film projects there. I’m plotting one for early next year and it’d be my first film in my home state.

  12. Submitted by Luna Foley on 05/22/2015 - 10:48 am.

    Mostly forgotten

    The current legislators weren’t in office during the heyday of film production in Minnesota (1990-96). So they have no idea what potential is possible. States like Louisiana, Georgia, New Mexico have had years of success and know what can happen with these incentives. From what I understand things have changed differently in Michigan, so they are falling back as being one of the big players.

    Film incentives are a win-win. They pay back $3-4 for every $1 spent. But they don’t see that money is coming in. All they see is the money going out.

    Thank God we have the IRRRB. Without them there would be far less film production going on in Minnesota.

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