11/30/17 — Movies and Roads

Robert Kahne

Published in

My Old Kentucky Podcast

5 min readJan 4, 2018

Movie Money

So today we’re talking about a part of state government that many don’t think about — movie production incentives!
Can you think of movies made in Kentucky?
About once a month or so, people appointed by the governor meet in secret session to discuss movie making. The goal is to get filmmakers to film their movies in Kentucky and they agree to use taxpayer money to do so. It seems like no one wants to talk about it though. Kate Howard did a piece on this in WFPL, and no one from the Cabinet returned a request for comment, nor did Bevin’s spokeswoman, nor did the sponsor of the bill, nor the executive director from the Kentucky film office or the spokesman for the cabinet.
36 states have programs like this, but a lot of states are getting rid of them or making them smaller
Kentucky first created the program in 2009, and we subsidize 20% of all in-state costs incurred, then they increased it to 35% in 2015. Kentucky and Georgia are the only states that have programs without a cap. (The two biggest films made here came before the program!)
Secretariat was filmed here, and Tammy was partially filmed here
Incentives program also applies to commercials, but a lot of those would be filmed here anyways
Some other examples: Call of the Wildman (Animal Planet reality series), a lifetime movie called Secrets in Suburbia, a Hallmark channel Amish romance called An Uncommon Grace
This is part of the Kentucky Tourism Arts & Heritage Cabinet and the group that approves the funds is called the Tourism Development Finance Authority and they have approved over $50 million in incentive requests since August (we’ve apparently never denied a request). We don’t really get a lot of details about the impact of these production incentives, other than listing the LLCs that are receiving funds.
So far, we have paid out $11, those $50 million in requests have been approved. So this could mean that some of those requests don’t actually end up making their film here. But they could!
Even the representative (Democrat Rick Rand) who sponsored the bill said they thought it’d be $3–5 million a year, not $50
So Kate Howard tries to attend a meeting and the cabinet spokesman demanded her name and motivation and the cabinet’s general counsel called her “openly hostile” and said that she declined to sign the attendance sheet and demanded to know the legal basis for the secret sessions
It was well within her rights to not sign the attendance sheet!
According to Kate’s article, some local production companies are seeing benefits, such as clients spending more money, and being able to hire more workers. But KECP says the cost outweighs the benefit and is largely bringing in out-of-state workers
The secretary of the cabinet has said there is no economic impact study, so it’s really hard to tell what kind of costs or benefits we’re seeing
But obviously, a lot of states are getting rid of these programs! Mostly because experts and policy people are saying that the real beneficiaries are the nomadic film industry.
A republican representative Paul Hornback, plans to sponsor a bill to scale back or eliminate the program, and he’s been pretty public about being upset that it all seems to be done in secret
Basically, Kentucky is a huge outlier now. So many states are totally eliminating these programs, or scaling way way back and we’re just totally doubling down.

Resources

Roads in Kentucky

There are more than 78,000 miles of roadway in the state of Kentucky, with about 35% of those under the control of the state government, including 13,500 bridges.
2018 is a “regular session” in the legislature, which means it’s a session where the general assembly has to pass a budget. The budget is actually TWO budgets (kind of), the “general fund” and the “road fund”. Roads are such a big deal that they get their own section of the budget.
During the last budget, road appropriations were $1.5 billion annually, and the general fund appropriations were between $10.3 billion and $11.3 billion.
The Kentucky Transportation Cabinet is a massive agency that is in charge of a bunch of stuff. It started in 1912 with a budget of $25,000, and now includes thousands of employees across five large departments that regulate and manage things like highway construction and maintenance, aviation, motor vehicle registration, and a lot of other stuff.
KYTC is funded by appropriations, partly, but more than half of the revenue for the road budget comes from taxes on gasoline. Since the price of gas has gone down substantially over the past several years and because cars are more fuel efficient now, the amount of revenue generated for the road fund has fallen substantially.
The state actually enacted a “floor” in the gas tax a during the 2015 legislative session, which means that the tax cannot go below 26 cents per gallon. The tax is currently 26 cents, and it will probably remain there for the foreseeable future.
During 2016, the cash balance in the road fund got really, really low. The expenditures during the 2014 budget ended up being about $500 million above revenues. In response, KYTC implemented “Pause-50”, a plan to basically stop doing any new work on roads at all during the second half of 2016 and the first half of 2017, and collecting revenues, hoping to get about $50 million in the bank.
The Bevin administration implemented a program called “SHIFT” to prioritize projects. KYTC said that they based their scoring on Improving safety, Preserving existing infrastructure, Reducing congestion, Fueling economic growth, and Spending tax dollars wisely (cost/benefit).
In June, KYTC released their list of about $50 million in projects that will get funded this year.
According to KYTC, the state has about $6 billion in unfunded road projects. While it looks like KYTC is working hard to prioritize the money that they have, and working hard to make sure that the financial health of the department is preserved even with low revenues, we aren’t really able to make a dent in our roads problem with the funding sources we have.
Many members of the legislature have floated the idea of raising the gas tax, and requiring people who drive electric and other high efficiency vehicles a different tax to ensure they (we) pay a fair share. We’ll be paying attention to how that discussion goes during the upcoming session.

Sources

QUICK HITS

SCOKY to hear a gay rights case featuring Lexington T-Shirt company Hands On Originals, which was ruled in violation of Lexington’s Fairness ordinance by the city’s Human Rights Commission.
http://wfpl.org/kentucky-supreme-court-to-hear-gay-pride-t-shirt-discrimination-case/
Pegasus Institute hired two professors, one from UofL and one from UK, to be researchers. That’s a huge step in the right direction for them, and definitely can be seen as addressing the issues Robert had with them when they were on the show.
https://www.lanereport.com/83563/2017/11/paul-coomes-and-john-garen-to-join-pegasus-institute-as-senior-fellows/
Winston Bennett, former Kentucky basketball player turned Bevin administration labor cabinet staffer was fired for sending really gross & flirtatious emails to women.
https://www.courier-journal.com/story/news/politics/2017/11/27/kentucky-basketball-winston-bennett-fired-bevin-emails/884093001/

11/30/17 — Movies and Roads

Written by Robert Kahne