The head of the Minnesota Film and TV Board is defending the use of nearly $267,000 of taxpayer money to defray the cost of filming “The Tonight Show Starring Jimmy Fallon” when the program visited during the 2018 Super Bowl in Minneapolis.
Melodie Bahan said Thursday that the state initiative to bring film and TV production to Minnesota — known as “Snowbate” — should be retooled but ultimately expanded to replicate those in other states that have used lucrative tax subsidies to lure Hollywood.
The money paid to NBC, a subsidiary of the nearly $200 billion Comcast empire, was first reported by Minnesota Public Radio.
NBC received money to pay a portion of Fallon’s salary, as well as for rental of the Orpheum Theatre, lodging, meals and some of the $320,000 it paid to local crews. Bahan said NBC qualified for the rebate and was paid as required by law.
“To me the larger question is what the gain could be with the right investment,” she said, referring to her vision of a more successful program that would return Minnesota to its cinematic glory days of “The Mighty Ducks” and “Grumpy Old Men.”
Some Republicans scoffed at the spending, which is sure to set off a fresh round of debate about the use of state money for favored industries, particularly film and television.
“We cut the program 67% in 2017, and that appears to have been a very good decision,” said Rep. Nolan West, R-Blaine. “It’s obviously not a good use of taxpayer dollars, and especially not in this case.” West called for legislative hearings on the issue.
The Snowbate program now gives out $500,000 per year on a first-come, first-served basis, though under Bahan the nonprofit film board is changing Snowbate to a merit-based system.
Steve Grove, commissioner of the Department of Employment and Economic Development that ultimately funds the Snowbate program, released a statement to the Star Tribune saying the agency is working with the film board to improve the program. “The goal is to ultimately provide additional scrutiny to project eligibility and ensure future Snowbate awards have a greater impact on Minnesota’s economy,” he said.
State Sen. Richard Cohen, DFL-St. Paul, has been a longtime advocate for using state money to bring film and TV production to Minnesota. He said he wasn’t familiar enough with the details of “The Tonight Show” arrangement to comment specifically but allowed that it seemed “a stretch.”
The program, which grants a 25% rebate on qualified costs of production here, has faced questions about its effectiveness before.
After the Legislature granted the program an unprecedented $10 million in 2014-15, a legislative audit challenged the Film and TV Board’s claim that Snowbate generates enough jobs and spending to justify the public expenditure. In fiscal 2014, the report said, 30 productions received $1.2 million in incentives and spent more than $5.5 million in Minnesota, providing work for nearly 500 state residents.
In an interview at the time, legislative auditor Jim Nobles said the taxes generated by that spending were not enough to offset the program’s cost. “Also, most of the jobs were for 10 days or less,” he said. “From the beginning, the film board said this was a job-creation program, not an arts or cultural heritage program. I’m not sure a few extra days [of work] for a lighting technician or cameraperson can give them the ability to stay in their profession.”
State government subsidizes industries of all kinds, including agriculture, manufacturing and, perhaps most famously, professional sports teams — often with far more money than granted to film and television productions.
Michael Thom, who has studied tax incentives as a professor of public policy at the University of Southern California, published a paper in 2016 that found state incentive programs for film and television production have a limited effect on employment, wages and total economic output.
Both Cohen and Bahan point to Georgia as having turned its investment in incentives into a thriving local industry. And unlike Georgia, Minnesota already has a significant crop of actors and crews who work in the Twin Cities theater scene.
“We are leaving millions and millions of dollars on the table by not providing incentives to the industry to come here,” Bahan said.