Producers from Hollywood and elsewhere spent a record $200 million in Hawai'i last year making such movies as Ben Stiller's "Tropic Thunder" and the next installment in the "Indiana Jones" series.

That tops a previous record $164 million spent in 2004 — a year when three different TV series were being shot in the state, according to the Hawaii Film Office.

"It was pretty phenomenal last year," state film commissioner Donne Dawson said.

The surge wasn't solely because of Hawai'i's beautiful beaches and shining sun. The increase also was driven by a generous new package of tax incentives that provide up to a 20 percent rebate on production costs.

Last year, 28 productions registered for a projected $25.5 million in production tax credits, according to the Hawaii Film Office.

Those productions, which include ABC's hit show "Lost," spent a projected $174 million in Hawai'i and created 5,403 mostly temporary jobs.

Lawmakers boosted the production credit from 4 percent to 15 percent on O'ahu and 20 percent on the Neighbor Islands in 2006 to attract more film and television productions to Hawai'i and compete more effectively against states that offer similar incentives. Hawai'i also offers a separate 100 percent tax credit for film and TV investors.

Despite the credits and the strong performance last year, there are signs that film and TV spending could slow in 2008. Already a two-month-old Hollywood writers' strike has halted work on local productions such as the fourth season of "Lost." Only eight of its planned 16 episodes have been completed. Other projects also are being delayed, at least temporarily.

"They're in a holding pattern right now," Dawson said. "How that's going to offset the numbers for the coming year remains to be seen.

"Obviously those things that are either already working with finished scripts and unscripted projects are going to be coming to the fore — like commercial work."

In 2007, six feature films registered for state production tax credits, including "Pirates of the Caribbean: At World's End" and "Forgetting Sarah Marshall."

This year, several small feature films are planning to shoot locally, although there currently are no major Hollywood motion pictures scheduled for Hawai'i.

Dawson and others in Hawai'i's film and TV industry hope that a surge in TV commercials will keep crews busy in the meantime. TV commercial activity was expected to increase when the state made tax credits available to commercial projects with budgets of $200,000 or more in 2006.

In 2007, 16 TV commercial projects registered for production tax credits. That included national commercials for the Land Rover, Pacific Life Insurance Co. and The Hartford Financial Service Group, and commercials for such foreign products as the energy drink Lipovitan, Kao Essential shampoo and Shiseido cosmetics.

The film office discloses the project and production company identities but keeps financial data for all individual projects confidential.

TAX CREDITS' IMPACT

Proponents of the tax credits contend that the program's cost is more than offset by the economic activity, tax receipts and publicity for the state.

Tax credit critics question whether the state needs to stimulate the film and TV industry when the economy already is growing.

There's also concern that the credits are a bonus for those companies that would shoot films, TV shows and commercials in Hawai'i anyway. Among the 2007 projects that registered for production tax credits was a TV commercial for Bank of Hawaii and another featuring the iconic Hitachi tree, which is in Moanalua Gardens. In addition, the TV production company for "Wheel of Fortune" registered for the credit in conjunction with a local shoot planned for March.

For TV commercials, the production rebate results in bigger budgets and more local spending, said Honolulu independent producer Dana Hankins, who last year worked on commercials for Bank of Hawaii and The Hartford.

"The return of a small portion of the budget due to that rebate is making the state far more attractive and ... in some regard is increasing the production budget so that more money is being spent" in Hawai'i, Hankins said. Because of the tax credits, "We're back on the radar because we're competitive and hopefully that will continue to raise the (TV) commercial expenditures in the state."

While small in scale and duration, TV commercials help fill in the downtime between production projects.

"Every little bit helps," said Lisa Lee Mitchell, co-owner of Eclectic Concepts in Honolulu, which provides production coordinating and food catering services.

TV commercials "spend a decent amount of money here," she said. "It's good when work is here."

Reach Sean Hao at shao@honoluluadvertiser.com.