Snowbate: the rebate causing debate

During the legislative session there has been plenty of talk about Snowbate.

If you’ve watched a favorite movie or TV show that was recently filmed in Minnesota, odds are it was a result of the affectionately-titled incentive program.

The current budget proposal from the House would eliminate the program's $1.8 million in Fiscal Year 2017 funding and propose that it, as well as the Minnesota Film and TV Board, go unfunded in the next two-year budget period. In past years, funding has been as high as $5 million in the 2014-15 biennium and as low as $500,000 in the early 2000s.

The Senate budget bill would not only keep the program alive, but increase its funding by $5.5 million in Fiscal Year 2017.

But what is the program? Why does it receive state funding, and why does it matter to filmmakers and film fans alike?

Finance brings films

The tax-based Snowbate program offers rebates up to 25 percent of expenditures for filmmakers and production companies who spend more than $1 million in the state if they can prove that it generated economic activity.

Snowbate exists under the umbrella of the state-funded Minnesota Film and TV Board, which has been around since 1983 when a push from DFL governor Rudy Perpich aimed to put grant money toward what was then called the “Minnesota Motion Picture and Television Board.”

The board played an instrumental part in securing the filming of box office hits like “The Mighty Ducks,” “Fargo,” “Jingle All the Way” and “Grumpy Old Men” in Minnesota throughout the ‘90s, creating jobs and boosting spending at nearby businesses, such as lodging and dining in the process.

Based off the string of successes, the 1997 Legislature created the Snowbate program, which would eventually transition into the current system, funded through a grant to the Department of Employment and Economic Development. DEED then provides grants to the film board, which runs Snowbate.

ON THE WEB Learn more about the Snowbate

The board has received state-funded appropriations every year since its inception in 1983. The funding represents 75 percent of the board’s annual operations budget — private investment matching makes up the rest. Without state funding, the board would be forced to disband.

“Closing the film office would make Minnesota one of only two states in the country without an office serving as a gateway to this significant industry; it's akin to eliminating support for the tourism office,” said Lucinda Winter, executive director of the Minnesota Film and TV Board since 2005.

Films bring fans

Supporters say the Snowbate program essentially sweetens the deal, making film production in the state more affordable. It also keeps Minnesota competitive against others states and Canada, who often offer similar incentives.

“Like it or not, incentives in the form of rebates and tax credits are the tools that states and countries employ to attract production. Just like other industries, studios and networks that can locate production anywhere are partnering with those that offer an incentive to do so,” Winter said.

Currently, 37 states offer a production tax credit or rebates to producers of feature films, TV shows, documentaries and commercials.

According to the Minnesota Film and TV Board, 153 projects have been certified for Snowbate reimbursement since July 2013.

In 2015, Snowbate certified the feature film “Wilson,” starring Woody Harrelson and Laura Dern, to shoot for 30 days throughout the Twin Cities metropolitan area.

“Over the last three years, taxpayers have invested roughly $13 million in the Snowbate program,” Winter said. “The return is more than $50 million in new private spending, much of it on wages for Minnesota workers. More than 3,000 Minnesotans have been employed on the 153 projects that have been certified.”

The program hasn’t gone unnoticed within the industry, either.

“The Snowbate program was instrumental in us making our final decision to shoot in Minnesota,” said Mike Leahy, producer with Strike Accord Productions in Los Angeles. The company shot two films, “Girl Missing” and “Love Always Santa” in 2015-2016 in the state.

“Our budget was increased by the 25 percent rebate; it allowed us to spend more money on the movie, and our movie is better because of it. Without [Snowbate], Strike Accord would not be shooting movies in Minnesota; it’s the reason I keep it in mind for all future films,” Leahy said. He estimates that Strike Accord spent 90 percent of its budget within the state, employing more than 50 people in the process.

Supporters say Snowbate’s benefits warrant merit beyond a fiscal sense of economic development and job creation; they say the exposure on a national level complements program funding.

“From my perspective, the cuts are short-sighted. The money is only part of the positive impact that a film can bring to a state,” Leahy said. “The film business is unique and valuable in that it will become even bigger in years to come due to the new content providers online.”

“After several years of promoting, we are seeing real results — including a series for Netflix, two TV series for ABC, and an animated children's series being produced for Amazon Prime,” Winter said. “Our office is in talks for larger productions over the next 12 months, but all of that progress will come to a halt if the Snowbate program is defunded.”

Unpredictable expectations, opponents say

Although the funding for the program is admittedly a small slice in a much larger pie of available funds, critics contend it’s still ineffective when it comes to job creation and economic development in comparison to other state-funded programs.

"From my economic development perspective, there are other programs that give us a better bang for the buck; it's about funding what's necessary versus funding what's nice," said Rep. Pat Garofalo (R-Farmington), who chairs the House Job Growth and Energy Affordability Policy and Finance Committee.

“We’re getting rid of the film board simply because we think there are better ways to create jobs for Minnesotans than incentivizing entertainment,” he said.

Garofalo pointed to increased funding in the tourism industry, and increased technology and infrastructure development as examples.

“The approach is to bring a much more favorable business climate to all businesses in Minnesota,” Garofalo said.

Sen. David Tomassoni (DFL-Chisholm), who chairs the Senate economic development committee, has said the program is "extremely important," and helps spur job growth for industries across Minnesota.