DENVER (AP) — Colorado’s film incentives office paid nearly $2 million to production companies without signing formal contracts, and it generally decides whether to offer subsidies based on talks with producers rather than ensuring economic benefits, the state’s nonpartisan auditor’s office said Monday.
Its findings were sure to renew Republican lawmakers’ criticisms of an office they say has produced little benefit for Colorado since it was created in 2012. GOP lawmakers this year tried to eliminate the program’s funding before whittling its $3 million budget to $750,000 for the fiscal year that begins July 1.
To qualify for taxpayer incentives, a Colorado-based production company must spend at least $100,000, and at least half its workers must be state residents. Out-of-state firms must spend at least $1 million for films, or $250,000 for commercials and other projects, to qualify.
Films, television shows, commercials and video games are eligible. The Office of Film, Television and Media issued nearly $11 million in incentives through 2016 for seven feature films, four documentaries, 13 TV shows and other projects.
But $1.9 million of that amount went to nine projects that didn’t qualify, and $1.3 million in incentives were awarded without contracts, auditors found. Partly as a result, the office can’t determine how many people are employed or how much tax revenue is generated by any project.
The film office reports that, between 2013 and 2016, its 31 projects created about 1,600 jobs and nearly $73 million in spending. The audit found it could not substantiate those figures.
Auditors further reported that the office “decides whether to offer an incentive based on undocumented conversations with interested companies” rather than using specific development criteria, auditor’s spokesman Stelios Pavlou said.
Among other measures, Colorado’s Office of Economic Development and International Trade, which oversees the film office, agreed to require advance documentation from companies before paying incentives; ensure that projects are completed in a timely manner; and strengthen its collection of jobs and tax revenue data.