Maryland (Map, News) - In a war of incentives to lure film productions to cities around the country, Maryland is treading water to remain competitive.

“The administration and the General Assembly have been very supportive, but we are losing ground,” said Hannah Byron, assistant secretary for the Department of Business and Economic Development. “We are behind our competition in terms of having a tax credit incentive program and states like Connecticut, Mississippi and Louisiana are gaining ground,” she said.

Jack Gerbes, director of DBED’s Office of Film, agreed. “We have the locations, but it’s not about location — it’s about incentives.”

Gerbes pointed to “Annapolis,” a film about the Naval Academy being shot in Philadelphia, and the musical remake of Baltimore native John Waters’ Baltimore-set “Hairspray” — which is being shot in Canada because of attractive tax credits.

In the last decade, Maryland’s film industry has added $770 million to the state’s tax base, including more than $158 million in 2006 alone, making it a major part of the state’s economic war chest. But somehow these numbers seem to have escaped Maryland delegates, who Wednesday voted to slash Gov. Martin O’Malley’s fiscal 2008 funding level of $6.875 million for the state’s Film Wage Rebate program (the same as last year), to $4 million.

“The governor was certainly disappointed that the House cut the funding and is hopeful that it will be restored in the final budget,” said Rick Abbruzzese, the governor’s press secretary. “The industry is incredibly competitive. Last year all the funds were used by film projects in Maryland so the demand is there.”

The Senate, however, supports keeping the current funding levels for the program. “The way it works is that after filming is complete, film companies apply for the rebate,” said State Sen. David Brinkley, R-Carroll County. “We estimate that for each dollar they spend the state earns $20 in tax benefits.”

Despite the cut, the House unanimously approved lifting a $2 million rebate cap per production based on wages, in favor of a rebate package based on the total production costs of films, commercials and animations in excess of $500,000, which is in line with other programs across the nation.

The rebate package excludes sports broadcasts, talk shows and student films.

However, Byron recognizes that more has to be done.

“We will be looking at various tax credit programs to see which ones we can emulate here in Maryland,” she said.

rchappelle@baltimoreexaminer.com