The state’s legal team may challenge some, if not all of the $32 million in state tax credits already awarded to movie and TV projects filmed in Iowa.
Deputy Attorney General Eric Tabor briefly testified by phone before a legislative committee this morning to update lawmakers on the criminal investigation of the state film office.
Governor Culver fired the film office director in September and shut down the film tax credit program after revelations of shoddy bookkeeping and possible abuse of the program, like tax credits claimed for the purchase of luxury cars and iPods.
Senator Rich Olive, a Democrat from Story City, is co-chair of the Legislature’s Government Oversight Committee. “At this point I have no idea…if they anticipate canceling all $32 million or 50 percent of it or what number that may be,” Olive says. “But it is interesting and I think appropriate that they look at challenging all $32 million because if they should not have been awarded, then they shouldn’t receive those.”
The $32 million in tax credits for movie and TV productions does not include the dozens that were pending when the program was shut down just over a month ago. The tax credit program had several legal restrictions. For example, the credits were for goods and services purchased from Iowa-based businesses, but investigators believe some movie producers ignored that restriction.
“They need to look at all of the tax credits that have been awarded and make sure they have been done appropriately,” Senator Olive says. “And, if not, then challenge those that have not been.”
Olive, like nearly every legislator, backed the program’s creation, as supporters argued it would help create jobs for Iowans. Olive says legislators have to ask several questions once the criminal investigation is complete.
“We will have to take a look and see if we actually created jobs. Were they good-paying jobs? Did it stimulate tourism? Did it stimulate the economy? And then (consider) what changes we need to make,” Olive says. “And the reverse of that is if it did not go a good job, then we eliminate the program altogether.”
Tabor, the chief of staff for Iowa’s Attorney General, spoke briefly by phone with Olive and other members of the Legislature’s Government Oversight Committee this morning. Tabor told lawmakers he couldn’t say much until their criminal investigation is complete, but Tabor said it appears many of the restrictions on the tax credits were “not followed at all.”
Representative Vicki Lensing, a Democrat from Iowa City, is the other co-chair of the Legislature’s Government Oversight Committee. She asked Tabor to give lawmakers a plan for redrafting the rules for the tax credits for film productions.
“I look at non-related expenditures and sponsorship and how some of these entities got their tax credits and the timing of the tax credits,” Lensing said. “They would appear at this time to be problematic.”
On September 18, the governor ordered the state’s film, television and video promotion program suspended until “all reasonable questions about the administration of this program are answered.” A few weeks ago a key lawmakers suggested the program could be suspended for at least a year and some lawmakers say it should not be restarted.
(This lead of this story was updated at 12:08 p.m., after an aide to Tabor sent an email clarification of Tabor’s testimony this morning. The story was updated again at 12:36 p.m. after the aide called Radio Iowa, again, to say Tabor did not intend to suggest criminal charges would be filed within “a couple of weeks.”)