At a press conference at Cinespace Studios on Tuesday, State Senator Michael Lee announced that he and other Republican leaders in the General Assembly had signed a letter promising the additional funding, with a formal vote planned in mid-November.
Lee said legislators will direct the North Carolina Department of Commerce, which oversees the grant program, to prioritize the additional one-time appropriation of $31 million for eligible projects in the greater Wilmington area. As noted in the letter, they will also “assess all internal protocols, procedures, and processes at the Department of Commerce to ensure lawful allocation of funds.”
Lee, the Senate majority leader, said Senate President Pro Tem Phil Berger and House Speaker Destin Hall, along with Representative Ted Davis, Jr., had signed the letter, addressed to Republican Dane Scalise, vice chair of the New Hanover County Board of Commissioners, who was recruited by Davis to run for his seat after he chose not to pursue reelection. Lee and Davis credited Scalise with working “behind the scenes” to help secure the funding.
Film industry leaders, including Cinespace Studios Vice President Chris Crowder and Outer Banks showrunner Jonas Pate, along with the regional film and television production technicians union, IATSE 491, were on hand and celebrated the funding — although some film employees voiced concern about the long-term stability of the grant program, seen as essential to keeping film in Wilmington.
The announcement also drew some criticism, in particular concerning the timing of the announcement but also about the existing structure of the grant program.
Issues with the film grant program
The announcement comes after months of reporting about issues at the state’s film grant program and disruptions in the region’s film industry.
As WHQR reported in July, the state’s grant program had underspent its $31 million annual budget for years, generating a healthy reserve fund that later allowed it to spend more than the $31 million cap — during the post-Covid boom of fiscal year 2022-2023, more than $90 million in grants were given out.
More recently, the way the Department of Commerce has run the film grant has become a bone of contention — in large part, it appears, because it ran out of reserve fund money.
With the fund depleted, the program couldn’t make more than $31 million in grants per year. But, because the grants are agreed upon up front and paid out after post-production, there are already multiple years of financial commitments on the books. The Department of Commerce put out an official statement saying there would be “little to no program activity for the coming years."
Lee has strongly disputed the Commerce Department’s characterization of the situation, noting that it’s fully booked with active projects — and in July he said anyone “repeating the myth that North Carolina is closed until 2029 is doing Georgia's marketing free,” although his assessment of the situation has changed since then, given the additional appropriations announced this week.
Commerce Department officials have told WHQR and other outlets that they were operating under “explicit guidance” from legislative staff. In July, the department told WHQR the program “has been operated in accordance with the law and guidance from state budget officials. SB 257 [the state budget bill] included a funding model for the Film Grant Program that reverses previous guidance and would result in little to no program activity for the coming years.”
The legislative leaders’ letter to Scalise claims “no substantive changes were made to the program,” arguing that the film grant program always lacked the statutory authority to spend beyond their annual appropriation, calling it “mismanagement of funds.”
While the grants paid out by the film project are an annually published public record, Lee told WHQR that he and other top legislators learned about the situation during this year’s budget session, “we found out that there were issues in the accounting and what's been committed.” That led to an additional $15 million in funding, added in the budget correction — but problems persisted.
Production companies began announcing they were cancelling or relocating North Carolina-based projects, and the local film union said there was effectively a ‘closed’ sign on the region’s studios. As reported by Port City Daily in late August, industry members, including Pate and Kirk Englebright, co-founder of Dark Horse, a Wilmington studio that underwent a sizeable expansion in 2024, were extremely concerned. Industry leaders said, more than anything, stability was the key to making the film grant program successful.
Reponses
Pate said he was grateful for “such a fast and thoughtful response” to the film grant shortfall.
“It's been really gratifying to see this kind of emergency happen, but that it was dealt with, and there was so much teamwork behind it. So I'm excited to convey to the folks in California and other places that greenlight productions, that we're back open for business, and we got more to do, and that there are going to be new generations of North Carolina filmmakers to come,” he said.
Darla McGlamery, business agent for IATSE Local 491, which represents people working on film in Savannah and the Carolinas, called the funding an “opportunity,” thanking Lee, Davis, and Scalise.
“We believed we were dead in the water, but these gentlemen did not stop. They found the political will that we needed them to find to dig deep and come in here and come up with a solution to a problem nobody in this room created,” McGlamery said. “We're buoyant right now. We're looking forward to taking the closed sign off of the Commerce Department.”
McGlamery also pointed to “growing momentum” behind a proposed federal-level film grant, which she said has support from President Donald Trump and Republican Tim Scott, the senior Senator from South Carolina.
Several other film employees and union members who spoke to WHQR said they were grateful, with one saying they were “cautiously optimistic.” Another said he was hesitant to “look a gift horse in the mouth,” but hoped that a long-term plan to stabilize the grant program to make it consistent would be hammered out in the near future.
The announcement garnered criticism from Jessica Bichler, the Democratic candidate challenging Lee for State Senate District 7 in the November 3 election. In a statement released by the North Carolina Senate Democrat Caucus, Bichler pointed to the timing and deeper structural issues.
“North Carolina’s film incentive program is fundamentally broken as a result of Republican leadership in the General Assembly over the last 15 years. Moving money around in a broken grant system isn’t a true fix, it’s a cheap trick to court votes a month before Election Day. Our film community needs a lasting solution to bring film projects back to New Hanover County. Lawmakers should revert to the film rebate system used prior to 2014, which allowed our film industry in New Hanover to flourish,” Bichler wrote.
The film rebate system, which didn’t have an annual cap, was allowed to sunset by Republicans in 2014. At the time, opposition came both from free-market groups like the John Locke Foundation and Americans for Prosperity and religious conservatives who objected to what they saw as ‘Hollywood’ ideologies. However, in subsequent years, Republicans — particularly in southeastern North Carolina — were more supportive. Lee led successful efforts to increase the funding for the grant program and make it recurring.
Other criticism came from residents who noted that this had seemingly been an exclusively Republican affair; Representative Deb Butler, whose district covers much of Wilmington, was apparently not invited. By the same token, in September, several Democrats held a roundtable — also at Cinespace Studios — including Governor Josh Stein, Commerce Secretary Lee Lilley, Butler, Wilmington Mayor Bill Saffo, and Tim Merrick, a Democratic school board member who is running against Scalise for House District 20.
Others echoed Bichler’s criticism of the announcement as a campaign ploy, noting that the money was not actually appropriated yet. Some questioned why the effort had taken so long, saying that some projects may have already chosen new filming locations, as well as noting the Dark Horse Stages being put on the market in September.
And, while Wilmington has long represented a significant portion of the film projects in the state, some echoed past concerns that the grant program disproportionately benefits one corner of the state — more so with priority spending on Wilmington-area projects. In response to a question from Port City Daily about the precedent being set for lawmakers to ask for grant money focusing on their own districts, Lee said, “We support North Carolina, but we represent our region right now, so we're really focused on kind of what we're doing here and making sure that we can support this region and what's been built in the industry down here.”
Next steps
Asked about the timeline, Lee said that the general assembly had not been in session recently. He acknowledged that legislators are gathering this week to consider a pause on the state’s gas tax, an effort to ease the economic pain at the pump that’s been inflicted on constituents for months due to the Trump Administration’s war in Iran, but said there wouldn’t be time for an appropriations vote.
“We're going to be for a very brief period tomorrow, but not enough time to be able to pull together the legislation. But to have them put a letter together like this signals to the industry that we are going to do something in the not too distant future,” Lee said.
Lee said that “for government” the response had been “lightning fast.”
Beyond the appropriations vote planned for mid-November, Lee said legislators will also look at policy updates and "safeguards" during next year's long session, but didn’t offer many details. Though he’d been critical of the Commerce Department in the past, he eschewed finger-pointing on Tuesday, saying, “we're trying not to focus on problems, but really focus on solutions.”
It’s not clear exactly what changes Lee and other legislators will pursue to “make sure this never happens again.” Lee said they would be talking to the Commerce Department and regional film commission but also producers, union members, and film industry workers.
“We've tweaked the film grant through the years, for market forces, and we've been working with the industry, but we probably need to take a wholesale look on how this is all working and whether we're achieving the goals that are set out before us,” Lee said.
Davis added, “there are two things that we need to have, and that's, one, transparency — the legislature needs to know what's going on with the Department of Commerce as far as the grants that they're giving. And also accountability. The legislature needs to know how much money that each one of these grants are, so we can all keep it together and make sure that we've got the money to cover [them].”
Below: Letter to Commissioner Dane Scalise
October 5, 2026
Vice Chair Dane Scalise
230 Government Center Drive
Suite 175
Wilmington, NC 28403
Via Electronic Delivery
Dear Commissioner Scalise,
Thank you for your continued engagement related to the North Carolina Film and Entertainment Grant Program. Your feedback and advocacy regarding film incentives, regional workforce impacts, and supporting industry infrastructure have been invaluable. Our Southeastern counties possess a rich combination of history, culture, economic vitality, and natural resources that have served as a beacon for generations of creators, artists, and filmmakers. We understand and concur with your perspective regarding the critical role that film production plays in the paychecks, tax bases, and daily lives of your constituents and colleagues.
The State Budget Act (G.S. 143C-6-8) has always controlled Film Grant Program spending, limiting financial obligations to appropriated funds. These controls both protect taxpayers and provide necessary stability to the film industry. However, as documented in recent discussions, the Department of Commerce has operated the program on a cash flow basis for years, despite lacking statutory authority to do so. Apart from small adjustments like increasing the individual award maximums, clarifying definitions, and adding the multi-productions bonus, no substantive changes were made to the program in the 2026 Appropriations Act (SL 2026-41).
Regrettably, the Department has been obligating funds beyond what has been appropriated, resulting in a substantial overcommitment of resources. For example, the Department's own funding study produced this year projected that the program would need $70 million to meet obligations this fiscal year, while it had only $62 million in cash on hand. In order to secure the program's solvency, the General Assembly responded by appropriating an additional $15 million during the 2026 short session (SL 2026-61), above and beyond the recurring annual budget. Even so, the Department now maintains it actually has nearly $50 million in additional obligations over the next two fiscal years. The consequences of going beyond what is statutorily permissible and spending more than what the Department has are visible and real.
Nevertheless, we do not wish to allow the mismanagement of funds by the Department of Commerce to negatively impact the hardworking citizens who contribute to this critical regional industry. Consequently, we are supportive of appropriating an additional $31 million for new film projects in fiscal year 2026-27 and creating accountability measures while the General Assembly reviews possible reforms in the next legislative biennium. These funds, equaling the entire North Carolina Film Office budget, supplement $46 million already provided by the General Assembly in 2026-27 and would be made available before December 31, 2026. Combined, these existing and planned allocations represent a total program commitment of $108 million across the 2026-27 and 2027-28 fiscal years.
Given the large economic footprint associated with film production in New Hanover and surrounding counties, this commitment of additional funding will be prioritized for qualifying projects filmed in the region. In order to effectuate this commitment, we seek a formal response from the Department of Commerce within 14 days regarding the prioritization of qualifying projects. As we near the 2027-28 Regular Session, our members will assess all internal protocols, procedures, and processes at the Department of Commerce to ensure lawful allocation of funds in the future. We look forward to further deliberation over statutory reforms and improvements within the North Carolina Film Office. However, we believe immediate action is necessary to ensure stability for the industry.
North Carolina's film industry supports thousands of jobs in the Lower Cape Fear Region and across this state, and we want to provide the support necessary for sustained success. But we feel it is our duty to uphold the current law and ensure that taxpayer funds are being spent wisely, rather than in an unchecked or imbalanced manner. Please do not hesitate to reach out with questions or concerns as we further engage the Department of Commerce. We look forward to continued discussions regarding this critical concern for your broader region and personal constituents. Thank you for your partnership, outreach, and counsel.
Sincerely,
Phil Berger, President Pro Tempore, NC Senate
Destin Hall, Speaker, NC House
Michael Lee, Majority Leader, NC Senate
Ted Davis, R-New Hanover, NC House
