Fevella’s Film Feud

by Tom Yamachika, President, Tax Foundation Hawaii

On Wednesday, May 31st, there was a press conference held at the State Capitol regarding the Hawaii movie and TV production tax credit.  Two of the main speakers were Kevin Holu of Hawaii Teamsters Local 996 and Senator Kurt Fevella (R, District 20).  Hawaii News Now shared footage of the event.

Mr. Holu complained that there were not enough local Teamster members working on the productions.  Earlier in the session, the Teamsters, testifying in favor of House Bill 1373, urged lawmakers to amend existing legislation by:  “Adding in safeguards to ensure that productions are engaging with local unions and hiring Hawaii residents and utilizing Hawaii-base businesses for goods and services.”  (The Senate Ways & Means Committee, which Senator Fevella happens to sit on, did just that, as we reported on about two months ago.)

Senator Fevella launched into a tirade about how the State is now administering the credit.  “This is Hawaii,” he said. “People are standing in line to film here but when you have one person making the decisions - that’s the discouragement, that’s the guy’s discouraging people to come here.”  (Apparently he filed a personnel complaint against the head of the Hawaii Film Office, Donne Dawson, to emphasize this point.) 

We wonder if the good Senator has been misinformed.  Do you remember Jason Momoa, the Hawaii-born actor who has made it one of his life’s projects to film a Hawaiian historical drama, “Chief of War”?  That series is indeed being shot now – in New Zealand.  Sure, part of the film was shot in Hawaii – on all of the major Hawaiian islands, according to the Hawaii Tribune-Herald, but, as it turns out, a good part of the movie is shot in New Zealand and a number of the principal cast members are New Zealanders, not Hawaiians.  It turns out that New Zealand offers international productions a production grant of up to 25% on qualifying New Zealand production expenditures.  Then, economics drove the location decision – “To survive, we had to go to Aotearoa [New Zealand] to survive for this, but by keeping the tax credit, it would give us the opportunity to keep us guys at home,” Brian Keaulana, “Chief of War” producer, was quoted as saying.  Perhaps the good Senator thinks that we could have or should have tried to force the production to do all of their shooting here.

Back to our good Senator’s speech.  Continuing his tirade, he had some choice words for mainland companies managing studios and productions in Hawaii.  “You’re darn right I have a problem [with them],” he said.  “Everything should be local. It’s our land, it’s our place, it’s our people.”

But we aren’t a country unto ourselves.  We’re part of the United States, as all Senators should know because they are required by Article XVI, section 4 of the Hawaii Constitution to take an oath to support and defend both the Constitution of Hawaii and the Constitution of the United States.  And the U.S. Constitution contains the Commerce Clause, which has been interpreted to mean that no single State has the right to turn away or discriminate against commerce from other States.  We’re all supposed to be one big happy family of States in this country.  Granting a small tax credit for out-of-state production payroll and a bigger one for in-state payroll, as was proposed this session, is one way of blatantly discriminating against other States, which state governments simply can’t do.  There are several other examples of such discrimination in the latest version of House Bill 1373, which died in this past session and, hopefully, will stay dead.

We are not sure that the Fevella Feud is now over.  We’ll know more in the coming weeks.  Until then, we hope that all parties can be better informed.