Happy Holidays!

As the year comes to an end, we can celebrate another successful, yet delayed, Pennsylvania budget. While the timing was 4 months past the June 30th deadline, with the Governor signing the final parts of the budget on October 30th, the film tax credit program was fully funded at $65 million. 2017/2018 reflects a $65 million commitment to film tax credits (increase of $5 million pursuant to the authorization bill in 2016), and also the establishment of a new "film production tax credit district" provision.

The 2017/2018 budget amount is $32 billion, relying largely on borrowing ($1.5 billion) against the state's Tobacco Settlement Fund. It also includes $300 million in special fund transfers; expanding the sales tax to online vendors; a new 12% tax on consumer fireworks; and gaming expansion.

As previously reported, the Department of Community and Economic Development will establish up to two film production tax credit districts. Districts must be at least 55 acres, located on a deteriorated property, and be occupied by a qualified business that would make a capital investment of at least $400 million within five years and contain at least one qualified production facility and six sound stages. This new tax credit would be in addition to the current $65 million cap. The new tax credit districts would begin in the fiscal year 2019/2020, which would begin July 1, 2019 (if budget is on time).

2017/2018 was positive for the film industry. A continued commitment by the Commonwealth to the industry is proven and there is now new framework for additional state investments in the film industry via the film production tax district provision.

The Year Ahead - 2018
The 2018/2019 budget process will officially begin when the Governor provides his annual budget address on Tuesday, February 6, 2018. PAFIA expects the Governor will propose to fund the program again at the same level, $65 million. PAFIA will continue to responsible advocate for an additional investment into the program. 2018 is an election year for most of the legislature as well as the Governor; therefore identifying additional (new) revenues to fund an increase to the program will be a significant challenge.

PAFIA remains a strong voice for the industry and a trusted resource to the administration, the legislature, and the staff.

Here's to a happy, healthy, safe, and prosperous 2018!