Budget & Tax

Weinstein film cost Oklahoma taxpayers $4.6 million

November 6, 2017

Jay Chilton

In 2005, the state of Oklahoma implemented a film incentive program with the goal of attracting movie and television productions to the state. “August: Osage County,” produced and distributed by the Weinstein Company, took advantage of the program in 2013, costing Oklahoma taxpayers more than $4.6 million.

To date, the Oklahoma Film + Music Office has paid more than $14.7 million in incentives, while the state has received approximately $2 million in returns for a return on investment of approximately 13 cents for every dollar expended in rebates.

The program is promoted as one of the most generous such movie location incentive programs in the nation, offering a 35 percent cash rebate—37 percent with music production—and an in-state minimum spending requirement of $50,000. While the incentive total is capped at $5 million, most production companies look at Oklahoma as one of the most attractive states in the country for film production tax breaks.

The Weinstein studio’s Oklahoma movie is set in northeastern Oklahoma. Principal filming for the movie took place at the Boulanger home near Pawhuska. Minor filming sites were in Barnsdall and Bartlesville, where the cast and crew lived during filming. The movie stars Meryl Streep, Julia Roberts, Ewan McGregor, Chris Cooper, Sam Shepard, Benedict Cumberbatch, and Abigail Breslin.

Dylan Sellers, president of production for The Weinstein Company, said that filming in Oklahoma was an economically sound choice for the company because of the rebate and would not have been filmed in the state otherwise.

The State of Oklahoma paid $4,640,598 in taxpayer subsidies via the Film Enhancement Rebate Program for the filming of the movie.

“It’s a great honor to be filming in such a scenic and culturally expansive state,” Sellers said. The movie, he said, “would not be possible without the generous support from the people of Oklahoma.”

Jill Simpson, then director of OF+MO, told Oklahoma Today that when her office learned in 2008 that The Weinstein Company optioned the movie rights for August: Osage County, she and her crew began soliciting Tracy Letts—Tulsa native and author of the Pulitzer Prize-winning drama—and The Weinstein Company to make the film in Oklahoma.

“To a studio of The Weinstein Company’s caliber, Oklahoma was more or less an unknown quantity,” she said. “It took a lot of convincing to get them here.

“We had to work three times as hard to show the value of coming here. We had to have an incentive, or we wouldn’t have gotten the movie.”

Director John Wells said in the same article that he fought to convince Harvey Weinstein that Oklahoma should be the film’s location.

“You couldn’t do this anyplace but Osage County,” he said.

However, in an interview with the Tulsa World, he that the state’s cash rebate was instrumental in bringing the production operation to Oklahoma.

“Without the incentives, we don’t come here. That was the Weinstein Company edict: We shoot somewhere that we’ll receive an incentive of some kind. Despite the major cast, this was not a major-budget movie, so that was important to the studio.”

Wells continued to say that the Oklahoma Film + Music Office went to extraordinary lengths to accommodate him and his crew.

Then OF+MO assistant locations manager Chris Kucharski explained one of the extraordinary lengths he went to in accommodating the film company.

“We got a heavy, heavy rain one night before we were going to shoot at the house,” he said. “Base camp was a muddy mess. It became impassable.”

The article tells how Kucharski orchestrated more than fifteen dump trucks of gravel and a small front-loader to build a temporary pad for the actors and crew to move in and out of their trailers.

“I can tell you that (Jill) Simpson and the people of Oklahoma basically wouldn’t let me leave the state. They got a helicopter to fly around to locations, and that really helped.”

Multiple leaders and administrators within the state’s film office and tourism department have repeatedly praised the movie production program as a driver of economic activity and a boon to the state’s tourism industry. However, not everyone agrees.

In November 2016, the State of Oklahoma Incentive Evaluation Commission released the Film Enhancement Rebate Program Draft Report. The report was commissioned to assess the effectiveness of the rebate program and provide suggestions for actions or improvements. The report was prepared by the Philadelphia-based PFM Group, financial and investment advisors who perform policy and program analysis consulting as one of their offerings.

The program’s stated goals were to:

On page one of the report, the results of the assessment were disappointing for rebate program proponents.

To the question of whether the program was achieving its goals, the answer was a definitive no: “There is no evidence that the Oklahoma film industry has strengthened during the time period when the rebate has been available.”

Return on the investment for the program was said to be weak and episodic. The report stated that regardless of any changes to the program’s administration or efficiency, “return on investment to the state will likely always be negative.”

CIJ made multiple phone calls to the Oklahoma Department of Commerce to ask about the discrepancy between statements made by elected and appointed leaders within the department and the Rebate Program Draft Report. In addition, the department was asked to explain the circumstances surrounding the provision of a helicopter for the use of The Weinstein Company during the filming of “August: Osage County.” However, those calls have not been returned.

The report concludes that the rebate program fails in every goal category it was designed to accomplish. Concerning job creation in the state, the program failed to perform as expected.

“From a height of 418 employees in 2008, the Oklahoma Film industry has contracted to 217 employees in 2014 (‐92.6 percent),” the report noted. “By comparison, a similar analysis conducted by the Massachusetts Department of Revenue reported a net positive growth of 1,503 jobs following the implementation of the state’s film incentive program (+34 percent). In other words, while there appears to have been modest growth in the number of film production businesses located in Oklahoma, the film rebate program does not appear to have succeeded in growing the number of jobs or payroll associated with those businesses.

“Even if Oklahoma were to succeed in fostering a robust film and television industry,” the report said, “the resulting job creation would neither be stable nor self-sustaining. Continued funding of this activity creates an industry whose business model is dependent on ongoing state subsidies.”

With regard to enhancing the state’s image on the national stage, the results of the study were less conclusive but still disappointing.

“The effect on Oklahoma’s image nationwide is unclear, but likely limited,” the consultants said. “It should be acknowledged that, while the economic benefits associated with film tourism are likely insubstantial, a positive, widely viewed depiction of the state will promote civic pride and through association make the areas more attractive places to live and work.”

However, when assessing the value of, “positive depictions” and “civic pride,” the report said that perception is subjective and inexact. For instance, in “August: Osage County,” the family living on the northern plains of Osage County is depicted as deeply dysfunctional, violent, and vulgar. The lead characters use regular, extensive profanity and are heavy smokers. Some Oklahomans have expressed doubt that Oklahoma is regularly depicted in a positive light in the movie, which was based on a play by Tulsa native Tracy Letts.

“The effect on tourism, if any,” they said, “depends on a host of idiosyncratic factors such as the popularity of the film, whether the filming location is shown in an attractive way, and the accessibility of the filming location.”

The consulting team finished their report by offering the following recommendation: “Since the credit does not provide sustainable economic development and provides little return on investment to the State of Oklahoma, the project team recommends that the State should repeal the program or allow the film enhancement tax rebate to sunset as scheduled in 2024.”