State elections: Could a Republican victory kill Wilmington's film industry?

With such recent box office hits as "Halloween Kills," "Scream" and "The Black Phone" having been made in Wilmington, the Port City has gotten a reputation as a hotspot for horror films.

If elections on Nov. 8 result in Republicans regaining supermajorities in North Carolina's General Assembly, however, some fear a horror-movie-like sequel for the film industry statewide and in Wilmington, a "Nightmare on Front Street," if you will.

"We saw what happened last time" Republicans had supermajorities, said Deb Butler, a Democrat who represents the 18th North Carolina House district, which includes Wilmington. If it happens again, "We will definitely run away our film industry that we built and then had to rebuild."

The outcome of the election, of course, is far from certain. Nonprofit journalism site The Carolina Journal calls Republican chances of regaining supermajorities an "uphill battle."

What's for sure is that Republicans need just a net gain of three seats in the state house and two in the senate to regain veto-proof supermajorities in both houses, which they first won in 2012 but then lost in 2018.

Film history

Flashback to 2014: The Republican-led legislature allowed the old film incentive to expire, replacing it with a $10 million grant program that was a fraction of the $61 million the state had paid production companies in 2013, based on $244 million in expenditures.

Hundreds of film workers and businesses took to the streets of Wilmington to protest, with "film pays my bills" and "film = jobs" stickers popping up on car bumpers and in storefronts. Starting in 2015, film production declined both locally and statewide.

The passage of House Bill 2, the so-called "bathroom bill," in 2016, was another hit for the industry, with some production companies vowing not to shoot in North Carolina until it was repealed. (In addition, the law led to canceled concerts, the loss of NCAA basketball tournament games and to some companies saying they wouldn't relocate to North Carolina.)

HB-2 was repealed in 2017.

Since it took effect in 2015, the North Carolina Film & Entertainment Grant Program has grown substantially. Each year, $31 million is now earmarked for the program (there's no expiration date for that provision), and productions are eligible for rebates of up to 25% on in-state spending. Individual productions are capped at receiving a maximum of $7 million for feature-length films and $15 million per season for television series. The latter amount was recently raised from $12 million.

North Carolina's film industry is coming off a record year in 2021, with $416 million of film-related spending in the state. The industry has continued at a near-record rate in 2022, with more than $281 million in spending and 13,000 jobs created so far, according to the North Carolina Film Office.

According to a "summary of projections and recommendations" provided to the General Assembly by the film office and shared with StarNews, the grant program currently has more than $93 million of cash on hand (not counting next year's infusion of $31 million) and expects to pay out more than $97 million in rebates over the course of the 2022-23 fiscal year.

Highlighting the importance of film to Southeastern North Carolina's economy, of the six productions projected to get the highest payouts in 2022-23, about $12 million each, all were filmed in the Wilmington area. They are: the second season of Starz show "Hightown"; since-canceled Fox drama "Our Kind of People"; hit Netflix show "Echoes"; the first season of Amazon teen drama series "The Summer I Turned Pretty"; and yet-to-air series "Florida Man" (Netflix) and "George & Tammy" (Paramount+).

Political film

John Hinnant, a Republican who's running to replace Butler in the N.C. House, said Butler's concerns about Republicans harming the film industry are unwarranted. He credits Republican Ted Davis of the North Carolina House's 19th district, which includes parts of New Hanover and Brunswick Counties, with throwing a lifeline to North Carolina's film industry.

"When the former version of the film incentive was killed, it was Representative Ted Davis who stood in the gap and convinced his Republican colleagues to adopt the grant/rebate program," Hinnant said.

Michael Lee is a Republican running for re-election in the North Carolina State Senate. He represents the ninth district, which includes most of New Hanover County. Lee said he has been a champion of the film industry and supported legislation to triple the film grant's original limit of $10 million to $31 million in 2015.

Lee's views on the film incentive have evolved. When he was running for office in 2008, Lee said, “I don’t always think that we should single out one industry and help them and not help others."

Last year, however, Lee introduced legislation to increase the film grant's annual funding from $31 million to $65 million, but the legislation wasn't passed.

Even so, "I think the current system works really well," Lee said. "We're shattering records. And it's not just the incentive. It's the crew base. It's the studio people. It's the area itself."

Lee said he likes that the current incentive is weighted toward TV shows, which can run for multiple years and therefore employ more people. He also said he views the film incentive as an incentive for the small businesses that depend on the industry.

Asked if a General Assembly with supermajority Republican control would scale back film incentives as it did in the past, Lee said, "Not as long as I'm there. I continue to fight for it every year."

Hinnant said that Butler has voted against the film grant program three times.

Butler responded by saying that "I voted against a budget that was loaded with hundreds of millions of dollars of pork projects that didn't adequately fund public education." Butler notes she was named a "leadership fellow" by Wilmington's Cucalorus Film Festival in 2019.

"I fully support film in our community," she said.

Beyond film incentives or rebates, Butler said a supermajority-controlled Republican General Assembly again passing social legislation, like it did with HB-2, could impact the film industry no matter what incentives are in place.

"There's no question that if they achieve supermajorities, abortion will be banned in North Carolina," Butler said. "I have a horrific fear of it. They've already telegraphed the punch."

Marcia Morgan, a Democrat running to unseat Lee in the North Carolina State Senate, said the financial impact of a potential abortion ban could extend beyond the film industry.

"When they passed HB-2, there was a tremendous amount of lost revenue," Morgan said. "The state lost millions of dollars when that happened."

Earlier this year, "Eric Larue," the feature directorial debut of Oscar-nominated actor Michael Shannon, relocated to Wilmington from Arkansas after that state's abortion ban went into effect following the U.S. Supreme Court's overturning of Roe v. Wade. With a budget in excess of $2 million, it qualified for a rebate of more than $500,000.

Hinnant said he thinks abortion "should remain legal, safe but also rare" and that "any changes to the current (state ban on abortion after 20 weeks) will require bipartisan support."

Lee said "I can't predict what the legislature will do" if Republicans regain supermajorities, but added that he thinks any abortion-related legislation passed by any future Republican supermajority would likely be less restrictive than the bans that have been passed in other states. In an op-ed he wrote for the StarNews, Lee said he's against abortion bans in the first trimester of pregnancy and supports "exceptions for rape, incest, and to save the mother’s life." He said abortions after the first trimester "should be restricted."

An industry waits

Johnny Griffin of the Wilmington Regional Film Commission, which promotes the area's film industry and helps bring projects to town, said he pays attention to election results but that "we look forward to working with whoever may be in office."

"We want to educate them on the film industry, and how we've been growing," Griffin said, adding that he'd like to "maintain and possibly grow" the current rebate plan. In the past, Griffin has said he supported Lee's failed bill to increase the annual funding of the film grant to $65 million.

As for social legislation, like a potential abortion ban, "It can have an impact on our industry," Griffin said. "Our clients are certainly watching that, so we have to be as well."

Any impacts on North Carolina's film industry could be felt by workers like Shaun O'Rourke, who has a long list of credits to his name and is currently working in Wilmington as a transportation driver on the Amazon Prime series "The Summer I Turned Pretty."

O'Rourke said he blames Republican policies for last decade's film industry downturn in the state, but is hopeful the industry will stay strong in North Carolina no matter which way the election goes.

"Georgia had a triggered abortion bill that went into law after Roe versus Wade was overturned and it did not slow down the film industry there," O'Rourke said. "It's our hope that even if something is put in place next year we would not suffer the same fate as we did before."

Some people, including California Gov. Gavin Newsom, have called on studios not to film in Georgia because of its abortion ban. But stories in multiple film industry publications, including Variety and IndieWire, suggest that Georgia's film incentive is so generous it tends to blunt any potential boycotts.

Georgia paid out $1.2 billion in tax credits last year on film industry spending of more than $4.4 billion, dwarfing North Carolina's film industry and its rebate program.

Contact John Staton at 910-343-2343 or John.Staton@StarNewsOnline.com.

This article originally appeared on Wilmington StarNews: State elections could impact N.C. film industry, Wilmington workers