The state is moving ahead with plans to lay off most of the current Film Office staff, though it has come up with funding to save one of the four positions that were to be cut.

As it now stands, three of the five workers in the office are being laid off, including film commissioner Donne Dawson. Two of the staffers who helped with film permitting and tax credits worked their final day yesterday. Dawson departs Dec. 4.

The three are victims of Hawai'i's $1 billion budget crisis and are among hundreds of workers being laid off by the state. The move to chop the staff has produced an outcry from industry executives, who question cutbacks at an office that helps generate business for the state.

The office helps process about 1,000 permits annually, certifies local production tax credits and helps find solutions when problems arise between filmmakers and state and county agencies. It also helps market Hawai'i as a versatile location for films and television productions. ABC's "Lost" is one of the higher-profile TV shows to work with the Film Office and use the Hawaii Film Studio facilities.

The changes have been noted on the Mainland, with some reports erroneously saying the state is closing the office. The Los Angeles Times yesterday wrote about the office's pink slips in its Company Town blog, noting "It's no day in paradise for Hollywood's so-described 'Tropical Back Lot.' "

The Department of Business, Economic Development and Tourism yesterday sent out a press release to reiterate that the Film Office isn't closing and to say that its core services and functions will still be delivered in a timely manner.

The decision on the office's staffing, as well as on other cuts at the department, was made by director Ted Liu, who said he began looking for ways to save Film Office positions after hearing the industry's reaction to the proposed cutbacks. Liu, during a September legislative briefing, said the state couldn't afford to keep specialists like Dawson and her staff because of the general-fund deficit.

But since that time, "we've gotten a whole lot of feedback from folks, including the industry," Liu said yesterday. He said people were concerned about how film permits would be processed and who would handle the 15 percent to 20 percent state film production tax credit.

That led him to explore ways to keep permitting specialists and the four positions' combined salaries of upwards of $250,000, he said. In the end, he got funding to keep on Sandra Ichihara, a senior film industry development specialist. Only Ichihara and Tammy Hasegawa, manager of the Hawaii Film Studio, will remain on the Film Office staff after the layoffs.

With the departure of Dawson, Georja Skinner, head of DBEDT's Creative Industries Division, will take a more hands-on role in the office. Skinner is a former Maui County film commissioner and will help in permitting and tax credit administration along with three others in her office who will get additional duties.

"I'm very eager to make sure we provide the same level of service," said Skinner, saying she is confident the transition will go well and hopes there won't be any hiccups.

The new staffers will have to bring themselves up to speed on certifying of the state film tax credits, which have generated about $500 million of activity here since their inception in mid-2006.

"We'll have a pretty well-rounded staff to step in and do our best," she said.

The office's telephone numbers, e-mail and Web site remain unchanged.

Liu said he is continuing to explore ways to finance the office through creation of a special fund drawing from permit and processing fees and other revenue. That change, however, will most likely need to be acted on by the Legislature, he said.