Arts funding diverted to help keep film industry in Maryland

Netflix's Capitol Hill drama "House of Cards" may receive millions more in tax credits to continue filming in Maryland, now that the General Assembly has agreed to make more funding available. But the local arts community may not like the politics.

To secure the extra funding, the General Assembly authorized state economic developers to dip into a $2.5 million pot of money called the Special Fund for the Preservation of Cultural Arts. It was created in 2009 to support arts organizations.

In a statement late Sunday, John Schratweiser, executive director of advocacy group Maryland Citizens for the Arts, said: "We're very disappointed that the General Assembly has taken away $2.5 million intended for Maryland based nonprofit arts organizations that serve diverse communities across the entire state to use for other purposes. Those being hurt by this decision are the Maryland arts organizations that serve Marylanders of all ages, day in and day out, that employ more than 12,000 Maryland residents and provide an annual economic impact to the state of over $1 billion. They were hit particularly hard during the recession and were looking forward to finally receiving these funds that were included in next year's budget by Governor O'Malley."

Lawmakers say it was an economic decision. "House of Cards," for example, contributed $250 million to the economy and 6,000 jobs during the past two seasons, according to economic reports.

"We believe the revenue generated in the state by having these productions here is tremendous, so certainly we want to encourage other films to be filmed here, and we don't want to lose what we have," said Sen. James "Ed" DeGrange Sr., an Anne Arundel Democrat who sits on the budget and taxation committee.

He added, however, it was unfortunate to cut other arts funding.

"You have to make decisions and sometimes the choices aren't what you would like," he said.

The money, part of a nearly $39 billion state budget approved Saturday, authorizes the Department of Economic Development to use the arts fund and another more general "sunny day" fund to beef up tax credits for the film industry.

The amount available for credits began at about $7.5 million in Gov. Martin O'Malley's proposed budget and grew to $11 million before the extra money was added. Now the amount available totals $18.5 million.

Media Rights Capital, the California company producing the Netflix series "House of Cards," had complained the $4 million it was offered by the O'Malley administration this year was substantially less than the $26 million it had received in the two previous years.

Officials with Media Rights Capital threatened to leave Maryland, briefly setting up a standoff with lawmakers, who threatened to use eminent domain powers to acquire the assets of any production company that has received tax credits and moves its filming out of state. That language was taken out of the budget legislation.

Extra credits could now be given to "House of Cards" as well as "Veep" and other shows filmed in the state. "House of Cards" has filmed much of its first two seasons in Harford County and Baltimore, including renting space in The Baltimore Sun building.

A spokeswoman for Media Rights Capital had no comment "other than we love shooting in Maryland."

State economic development officials said it's too soon to say how much funding "House of Cards" will receive. The film tax credit program still needs to be approved in separate legislation, which was expected before the close of the 2014 session, according to Karen Glenn Hood, a spokeswoman for the state Department of Business and Economic Development. The legislative session ends at midnight tonight.

Del. Frank S. Turner, a Howard County Democrat and vice chair of the House Ways and Means committee, noted $1.3 million remains in the arts fund, though much of it already has been allocated, including to area museums.

He said the other $2.5 million that can be diverted to the film industry is still funding the arts, and in this case, could help continue driving a significant economic engine in the state. In Columbia where "Veep" is filmed, for example, the old GE appliance warehouse had been largely vacant for 20 years.

"We can't discount that, or the jobs," he said. The tax credits are, he said, "another tool we have to work with."

meredith.cohn@baltsun.com