Should state’s film efforts fade to black?

Measuring the benefits of film tax credits in Connecticut is akin to figuring out the ledger on a motion picture after factoring in box office, streaming, DVD sales and the overseas market.

No one has ever been able to definitively declare Connecticut’s efforts a “hit” or a “flop,” but there are plenty of reasons to scrutinize the receipts.

A CT Mirror investigation published this week offers several plot twists surrounding credits awarded to Blue Sky Studios, which was Connecticut’s marquee star just a few years ago. After producing hits such as the “Rio” and “Ice Age” franchises, along with “The Peanuts Movie,” the Greenwich-based studio seemed to anchor a future for film production in the state and launch careers in an enticing industry.

Disney, home of the happy ending, crushed those dreams when it purchased Fox studios, which included Blue Sky in its portfolio. Another cartoon factory was one asset Disney apparently didn’t need. Blue Sky faded into the sunset, and 469 employees lost their jobs last February.

The Mirror reports Blue Sky was receiving Connecticut’s Film and Digital Media Production Tax Credit rather than the Digital Animation Production Tax Credit. The difference is more than a few words. Blue Sky should have maxed out at $15 million a year, but was instead granted $32 million every 12 months. The result was reportedly an excess of $83 million.

And, just to put a cartoon exclamation point on the matter, the last $32 million payout was disbursed less than two weeks before Disney announced the closure of Blue Sky.

Did Connecticut give Disney $32 million for nothing? Shouldn’t state residents at least get some Fast Passes at Disney parks?

Alas, while companies have to surrender credits if they leave the state, that’s not the case with Blue Sky because it was shuttered.

In its 2019 report, the Connecticut Department of Economic and Community Development (DECD) estimated the average economic impact of the Film and Digital Media Production Tax Credit resulted in a loss of $58,510,604. While that’s not even half the price tag to produce, say, “Ant-Man,” it would seem to demand a closer look at the books.

The DECD apparently agreed, and hired a consultant. That act can seem like a copout.: When faced with a challenging financial kerfuffle, spend more money for an outside opinion.

The agency hit the pause button on its 2020 report to get feedback from the consultant. That result was expected last summer. Like any troubled film production, it was delayed again and is expected to be delivered soon.

We’ve supported some of the state’s film measures, and they still merit reasoned consideration. The Film Infrastructure Tax Credit, which helps fund facility construction costs, for example, has boosted Connecticut’s success stories with ESPN, World Wresting Entertainment and NBC.

The more fleeting film sets that occasionally roam around the state also deliver invisible benefits by luring tourists and backing local businesses.

But Connecticut has made other mistakes regarding tax credits, notably overlooking its own fine print that allowed producers to sell them to other entities.

Don’t blame Disney, Blue Sky or any other filmmaker for the state’s box office woes. What should be coming soon to an auditor’s office near you is a closer look at Connecticut’s bookkeeping.

Did Connecticut give Disney $32 million for nothing?