As film and TV-show production become more common in Montana, lawmakers are already seeking to expand a new tax incentive and encourage the industry to plant firmer roots in the state.
Paramount’s Yellowstone, the most famous recent production out of Montana, is an example of what legislators hope to see more of. The show was mostly shot elsewhere until last summer when the new tax incentives kicked in.
The Montana Department of Commerce has given tax breaks to 13 films since 2019, when the Montana Legislature passed the MEDIA Act. The law gives media and film companies a 20% tax credit on their production spendings, with additional credits in some situations.
Montana Film Commissioner Allison Whitmer said the incentive draws film crews for movies, television series and commercials to the state.
"We have things like Yellowstone, which is contemporary westerns, but we also have reality shows and we have shows about dinosaurs," she explained. "We have shows about people going into the woods and learning about flora and fauna."
Supporters of the tax credit say it is a worthy trade-off that should be taken step further — the state loses a few million dollars a year in tax revenue at the outset but adds more economic development over the long term.
"I’ll leave it to the proponents to go through the numbers to show what a wild success it was," said Wylie Galt.
Galt, the Speaker of the House and a Republican from Martinsdale, carried the original MEDIA Act and is now carrying House Bill 340, the bill to extend that tax credit program. Montana hit the original bill’s $10 million cap on tax credits in 2020 and is already close to that number for 2021.
The proposed update would remove the current cap of $10 million dollars per year on tax credits. It would also expand production companies’ wages and spending eligible for the incentive.
David Bedey, R-Hamiliton, voted for the bill and has seen his district benefit from increased film production.
"We're talking about high-paying jobs," he said. "We're talking about technical jobs."
While the state becomes more reliant on the tourism industry, where many jobs are seasonal or minimum wage, Bedey believes the film industry could provide more stable sources of income for Montanans.
He said tax incentives like these help Montana compete with states like Georgia and Utah, which have already lured production out of California with similar programs. Opponents however say this credit might not bring in the money it is purported to.
Heather O’Loughlin, co-director of research at the Montana Budget and Policy Center, said the cost to the state is too great and competition with other states is only growing. She pointed out that many of the best paying jobs on film sets still go to out-of-state workers.
"It’s really a choice of where we ultimately want to invest our money, and where is the biggest bang for our buck," O’Loughlin said.
According to analysis from the governor’s budget office, expanding the tax break incentive would result in an estimated $29 million revenue loss to the state by 2023 — more than five times the impact projected under the original policy. The bill sponsor did not sign-on to the updated forecast.
The state commissioned a separate report on the early effects of the act on the Montana economy. It found that between January 2019 and June 2020, film production both with and without the original incentive had an economic impact of more than $47 million in the state while supporting the equivalent of 280 full-time jobs.
The report also found that productions spent $23.9 million locally at businesses such as hotels, restaurants and nearby stores.
Carla Mittelstedter is the general manager of the Livingston's Travelodge and said film crews help fill rooms while making for fun for other guests.
"There was one guy, Sebastian," she said. "Every morning, he would go outside and stand, and the sun would beat down on his hair and it would flop around in the wind. And he looked like a true rock star, and that's what we said — he was a true rock star."
Mittelstedter added that film crews also helped her businesses weather the pandemic's low booking numbers. Before the crew arrived this month, she was having trouble filling Travelodge rooms. Now crews are overflowing into a local Super 8, which Mittelstedter also manages.
Amanda Marshall is the producer on a crew staying at the two Livingston hotels.
"It's been kind of amazing ... it's like home," she said.
Marshall is filming a movie called God’s Country. The film had come together and fallen apart several times, she said, but the tax incentives from the MEDIA Act finally made it possible to move forward.
"It was kind of perfect timing because as we were putting the film together, the tax credit was also coming together," Marshall explained.
Lawmakers are still debating whether to increase the credits. A spokesperson for House leadership said the House Taxation and Appropriations committees are discussing options to settle on a new, higher tax-break cap. The bill faces an early-April deadline to advance to the Senate.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.