Zero Upfront Cost
The mission of the Delaware Film Initiative is:
The film incentive program we propose is not a handout, it is a loan. It's not a grant, it's an upfront financing solution that studios are happy to repay.
But the state does not provide that loan, it is provided by the banks.
In fact, the state does not have to give a single dollar to any film.
What the state is doing is guaranteeing the loans for the banks.
Those loans have very strict requirements, including requiring the films to have insurance, provide their largest collateral, and to set aside 3 years of monthly payments in a savings account.
That means the loan cannot default for 3 years.
Delaware law requires that the state set aside the funds for any loans it guarantees. This requirement is part of why we have an AAA rating on our bonds, the highest rating any state can receive.
This means that the state must set aside $12 million into a savings account in order to launch the film initiative, which is a significant nest egg here in Delaware.
But that nest egg will be collecting interest for 3 years before a single dollar can ever be called on.
Thanks to legislation in our incentive program that taxes the new film industry, that $12 million will generate $7 million in direct tax revenue.
This entire program has been based on New Mexico's loan program, which has never seen a loan default in 6 years. But even if one loan were to completely default the tax revenue generated by all the films would more than enough to cover the default of one.
The Delaware Film Initiative would bring over 1,000 high-paying, green, recession-proof jobs to the state this year if passed, and it would not cost the state a single dollar. That's a program Delaware needs.
Contact your Senator, Representative
Let Legislative Hall know that you want to see the film industry in Delaware.
Or call (302) 744-4171 and they'll direct you to the right office.
