An Evaluation of the Effectiveness of the Mississippi Film Office
Executive Summary
Introduction
PEER received a legislative inquiry as to why other states appear to be attracting more film production work than Mississippi does. The inquiry further requested additional information in regard to the Mississippi Film Office’s efforts to attract film production to the state.
PEER sought to determine the differences in the Mississippi Film Office’s approach to promoting movie production in the state compared to the approaches of other states’ film offices. The analysis took into consideration the current state of the film industry, the economic impact and return on investment of the incentive program, and the Mississippi Film Office’s goals regarding film production in Mississippi.
Background
The Mississippi Film Office (MFO), originally the Mississippi Film Commission, was created in 1973 by executive order. It is currently organizationally housed in Visit Mississippi, which is a division of the Mississippi Development Authority.
The MFO’s current goals are to:
The MFO’s average annual budget for FY 2010 through FY 2015 was approximately $392,054.
The Competitive Environment of the Film Industry
Rapidly changing technology, diminished dependence on traditional locales for production, and multi-national efforts to attract film production are critical factors in the present filmmaking environment.
The competitive environment of the film industry has changed due to the mobility of film productions made possible through advancements in technology and the development of film incentive programs.
The MFO is taking a development approach similar to the integrated approach used by Canada to break into the film industry in the early 1990s. The MFO is focusing on building the film industry from the ground up by creating depth of workforce and breadth of support and service.
The Legislature has tailored Mississippi’s incentive program to reflect these goals. The minimum state spend of $50,000, per project cap of $10 million, and annual cap of $20 million make Mississippi’s incentive program attractive to the smaller productions and independent films the MFO is seeking.
The Status of Film Industry Resources and Infrastructure in Mississippi
In addition to its incentive program, the Mississippi Film Office has created or supports several other resources that help it achieve its goals. These resources help Mississippi attract the MFO’s specific market: small and independent films.
Mississippi’s incentive program provides the competitive edge to attract filmmakers to the state, while the state’s variety of film organizations, societies, and festivals fosters the growth of the film industry and supports the base of local filmmakers. The Mississippi Film Office Crew Resource Directory allows producers to locate industry professionals easily and the state’s film-related degree programs help provide a supply of educated crew. Mississippi’s independent studios provide the structure and services to develop films in state.
Economic Impact of the Incentive Program: Return on Investment and Job Creation
State film incentive programs are controversial, as they may often yield relatively low returns on investment. While the return on investment of Mississippi’s film incentive program is only forty-nine cents on the dollar, the program has succeeded in producing a higher return on investment than that produced by many other states’ incentive programs (e. g., Louisiana’s program had a return of twenty-three cents on the dollar). It has also succeeded in achieving the film office’s strategy of creating jobs and increasing local film production.
Recently, states’ film industry incentive programs have been criticized based on studies that highlight their poor return on investment. However, many states still offer such programs due to potential economic growth in other areas such as employment opportunities, infrastructure, and support services.
Return on Investment of the MFO’s Incentive Program
PEER worked with the State Economist’s Office to project the economic impact of the Mississippi’s Film Office’s incentive program. The model used to project direct economic impact for this report is known as REMI Tax-PI, which is an analytical tool designed to evaluate the impact of various tax policies on the Mississippi economy.
For a six-year period beginning in FY 2010 and ending in FY 2015, the model compared the impact of the incentive program with potential investment in manufacturing, in the service sector, and with devoting the funds to other government agencies and programs. Generally, the performance of the incentive program would have been exceeded by investing the same amount in the manufacturing sector. According to PEER’s calculations, for fiscal years 2010 through 2015, the MFO’s incentive program returned approximately forty-nine cents for every dollar invested, a loss of fifty-one cents on the dollar.
The two main factors contributing to the incentive program’s net loss to the state (in terms of return on investment) are the size of the rebate and the fact that the motion picture industry in Mississippi is still in its infancy.
Job Creation of the MFO’s Incentive Program
Most incentive programs are created in order to produce more jobs in an industry and therefore the amount of employment opportunities created by an incentive must also be considered along with the return on investment. Based on the model’s calculations, the MFO’s incentive program created 1,094 direct and secondary jobs in FY 2015.
Potential Threats to Mississippi’s Film Industry
Although Mississippi’s film production industry appears to be growing, the limited size of its experienced domestic workforce, few film production educational opportunities, and scarcity of film industry-related infrastructure limit Mississippi in the size and number of film productions that it can support. The MFO believes that through the state’s development of short-term film production training programs, the MFO’s promotion and development of infrastructure, and continual monitoring of certain aspects of the industry, it can cultivate a competitive edge outside its specific market.
Despite having less film industry-related infrastructure than other states, Mississippi saw the number of films annually produced in this state increase dramatically between 2006 and 2014. If the number of films produced in Mississippi each year continues to increase, as expected, the supply of available local crew to service these films must meet the growing demand if Mississippi hopes to establish long-term film industry growth.
Mississippi’s limited number of film industry-related higher education options and lack of workforce training options prevent this state from establishing and maintaining the trained workforce necessary to support film production. The Mississippi Film Office believes the state should create short-term, non-academic film production workforce training and certification programs in order to maintain the type of labor force needed to work on film productions.
The Mississippi Film Office staff has indicated that it helps any parties interested in producing a project in Mississippi to get in touch with potential resources that can help them. However, such assistance is currently conducted in an ad hoc manner; as a result, potential productions may be deterred or lost due to the lack of an easily accessible communications bridge between interested producers not participating in the incentive program and local production resources.
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