Local filmmakers and film buffs hoped it was just a blooper reel as they watched the popular Motion Picture Competitiveness Program pass in the state Senate, but die before reaching a vote in the House during budget wrangling last May.

While supporters were confident there were sufficient votes to pass the bill (SB 5539) in the House, Speaker of the House Frank Chopp linked the bill to a House bill related to housing and homelessness, which did not pass in the Senate.

This effectively ended the film incentive’s chances for funding. Speaker Chopp says some lawmakers were concerned about giving tax breaks at a time when social services and education were being cut, and others worried that the program didn’t deliver sufficient results. As of December 2011, Washington was one of only 10 states without a film-incentive program.

The program, a $3.5 million tax incentive in the 2010–11 budget, was established in 2006 to provide funding assistance for the making of films, TV series and commercials in Washington state, allowing contributors to claim a dollar-for-dollar business and occupation (B&O) tax credit while “helping filmmakers bring their vision to the small and big screens,” according to a Department of Revenue notice.

To qualify, productions had to meet a budget threshold: $500,000 for feature films, $300,000 for television projects and $150,000 for commercials. The program returned 30 percent on dollars spent in Washington, including salaries for Washington state resident cast and crew, costume and equipment rental, catering and material to build sets.

In the past five years, 71 projects have benefited from the film incentive: 29 feature films, five movies of the week and 37 commercials. The program has given out $17.9 million in incentive money since 2007. Total amount film companies have spent in the state as a result? A whopping $69 million. Now double that number to account for the “multiplier effect” (the money spent on hotels and services by film crews, according to the state’s Joint Legislative Audit and Review Committee), and you have a program that brought in $137 million—eight times what it originally cost. Those sound pretty much like blockbuster numbers to local cineasts.

Amy Lillard is the executive director of Washington Filmworks, a nonprofit formed to support the growth of the state’s film industry. In addition to the enormous return on the investment, Lillard says that ours was the only incentive program that required productions to provide health and retirement benefits.

“As they’re cutting those services in Olympia, they’re also cutting this program that provides those benefits,” she says. Lillard adds that Seattle is home to about 2.5 skilled film crews, many of whom will now be forced to find work elsewhere.

These crews include costume designers, best boys, gaffers, key grip operators and all those other folks whose entertaining job titles crawl past in movie credits. “Any producer in their right mind is going to go to the places where they can get the best deal,” she says. “Except for the Space Needle, the general audience doesn’t know if a movie is shot in Portland or Seattle.” Lillard believes the film incentive is an economic development program.

Northwest Film Forum executive director Lyall Bush agrees. “It seems very clear that millions of dollars are being brought into the state as a result of the program,” he says. “In ending the program, the state loses many opportunities for both income, which we can count, and glamour, which we both can and can’t count.” Bush says that cancellation of the program is especially frustrating to those who have worked for many years to make Washington a competitor in the lucrative Northwest market.

“If we don’t invite in large productions from New York and Los Angeles, it’s not as if those productions are going to disappear from the face of the earth. They’ll go to British Columbia or Oregon. They have pointy trees there, too.”

Although most of the films supported by the Film Forum do not have a budget large enough to make them eligible for the film incentive, Bush fears that the loss of the incentive will have lasting repercussions for producers of small and medium-size films and TV shows. “We are now at a pivot point,” he says. “I can easily see a day when the kind of filmmaker the Film Forum supports will feel a painful squeeze with the loss of the incentive program. The state should understand that by supporting the film incentive, great things get produced and the state makes money as well.”

Local big-time producer Jennifer Roth (Black Swan, The Wrestler, The Squid and the Whale) has this to say about the local film climate, after bringing several big-budget films here, including World’s Greatest Dad with Robin Williams: “Seattle is an excellent place to make a movie. Fantastic locations, talented crew, and it’s a city that absolutely everyone wants to visit. Seattle is a character in any film. It has art, history, music, it’s intriguing and sexy. We have one of the most literate and educated populations of any American city, and people write screenplays about our city that get shot in Vancouver.”

Even though Seattle is on everyone’s A-list for a movie location, Roth acknowledges that it’s virtually impossible for the state to build up the industry without a tax incentive.

“Right or wrong, incentives are simply part of the equation now for film investors and studios. The reason America lost work to Canada in the 1990s … was because Canada trotted out incentives well before any state in the U.S. did.” Roth adds that Los Angeles is the only city in the U.S. that is succeeding without an incentive, and even there, production is down. She says that, in addition to losing the money that comes with film production, there are other financial considerations. “The most obvious loss that we will suffer will be to tourism,” she says. “Sleepless in Seattle alone brought in an estimated $100 million to the Puget Sound area.” Will Roth be able to bring any more big-budget films here for filming without a tax incentive? “I would be laughed at for trying.”

It isn’t just the big-budget Hollywood films that have benefited from the program. Local independent filmmaker Lynn Shelton (Humpday), whose latest film, Your Sister’s Sister, recently sold to IFC Films, has never received film incentive money for her feature-length films, but she relies on the local talent that a thriving industry provides. “Even those films that do not qualify for incentive money need to have access to the crews that work here,” she says. “I can’t make a film alone. I need a team of highly skilled people to help me.”

Shelton’s 2010 MTV series, $5 Cover, which did receive incentive money, followed the doings of 13 Seattle bands. That series employed 75–100 people on the crew and 50–60 people in the cast. Shelton recently signed on to direct the multimillion-dollar film Laggies, to be shot in L.A. “If the Washington state incentive program were still in place, I would have immediately started pushing to bring it here for filming,” she says. “Without the state incentive, there’s no way to compete.”

Shelton characterizes the local filmmaking community as being worried but not despairing about the future of the incentive program. “We have a beautiful community of homegrown filmmakers here, including established filmmakers and up-and-comers. But in order to keep nourishing the community that has been developing in this state over the past dozen years, talented film collaborators need to be able to make a living here.”

Will the state’s film industry fade to black? Not so fast. Though it’s had to cut staff and services, Washington Filmworks is still administering the remaining incentive money through June 2012, and it plans to lobby for reinstatement of the bill in the new legislative session.

“Some legislators, even in my party, are against all tax incentives,” says State Representative Phyllis Gutierrez Kenney (D-46th), an early champion of the original bill. “They can’t see the big picture and the jobs that this incentive creates.” Since the bill is technically still alive, the new legislative session can vote to move it over to the House. When that happens, Representative Kenney will again champion the bill. “I’m not going to give up on it. This is a program that will bring jobs to the state.”

“We are in a tight situation with the budget,” adds Kenney, “but how are we going to get out of it? By cutting programs that create jobs and bring in revenue for the state? We have to spend money to generate money.”