State is urged
to expand film efforts

Industry officials tell senators
that the state could thrive in
various film-related ventures

By B.J. Reyes
Associated Press

To Hawaii filmmaker Edgy Lee, the state should be doing much more for the movie industry than simply providing the backdrop for blockbusters such as "Pearl Harbor" and "Tears of the Sun."

She envisions an industry of thriving companies that generate new revenue, outside investment, jobs and even manufacturing and distribution centers for Hawaii-produced DVDs and other products.

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"I believe we could realistically, within five to 10 years, see major effects of a successful arts and entertainment industry in the state," Lee told Senate lawmakers. "What we have here in Hawaii is a natural spring for creative production generated by Hawaii writers, producers, playwrights and composers."

Lee, maker of the critically acclaimed documentary "Paniolo O Hawaii -- Cowboys of the Far West," joined other industry leaders at the Capitol last week to ask lawmakers for their continued support for film and television production in Hawaii.

As legislators look for ways to diversify the economy away from its heavy reliance on tourism, cultivating and "exporting" local talent and culture is just one avenue worthy of exploring, Lee said.

Other options being studied at the Capitol include assisting the University of Hawaii in its development of a film school and degree program, and additional tax breaks to lure more production ventures to Hawaii.

"The important thing for everyone to know is that we are in direct competition with other locations such as Vancouver and Florida and Asia," said Rep. Brian Schatz (D, Tantalus-Makiki), chairman of the House Committee on Economic Development and Business Concerns.

Aside from luring production to Hawaii, the state also could reap benefits from its annual film festivals.

"The arts in general, and film festivals in particular, need to be seen as a serious potential rip-roaring V-8 engine of economic growth that, given the opportunity, can drive more meaningful financial activity than the funding provided to date has allowed them to generate," Barry Rivers, executive director of the Maui Film Festival, said in testimony to Senate lawmakers.

Chuck Boller, executive director of the Hawaii International Film Festival, noted that attendance at last year's event reached a record 65,000 people, about 5,000 of whom were tourists.

Lawmakers, though, must balance the desire to help the industry against the state's fiscal reality.

Various tax credits that have been granted in the past have been roundly criticized by the state Tax Review Commission as being too broad, too generous and lacking accountability.

At the center of that criticism is Act 221, passed by the 2001 Legislature, which provides tax credits for investments in high-technology businesses. It has become a boon to moviemakers who have taken advantage of the law's broad wording to reap substantial tax benefits.

Credits claimed under Act 221 in its first year totaled $46 million, nearly three times as much as expected, according to preliminary figures from the Department of Taxation.

The state's Council on Revenues cited the lost revenue from tax credits last week in lowering its forecast for growth in tax revenues this fiscal year to 4.3 percent from 6.1 percent.

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