Dear John was able to do what no other movie was able to do: knock Avatar out of the top spot on the box office chart. Filmed almost entirely in the Lowcountry, Dear John followed a growing tradition of successful Hollywood blockbusters utilizing Charleston as their set, including The Patriot, The Notebook, and Cold Mountain.

But with the state’s budget facing its third consecutive year of cuts, government agencies are no longer able to simply trim the fat to stay operational — now they have to cut away muscle and bone as well. The S.C. Film Commission is no exception.

Their 2009-2010 budget totaled $10,426,863. Most of that figure goes to rebate pools that provide incentives to major films like Dear John to shoot in the Palmetto State. However, the 2010-2011 budget currently making its way through the S.C. House and Senate further trims the Film Commission’s funding to $10,319,680, sparking fears that programs or jobs could be lost. Still, that’s a smaller percentage cut than the overall cuts to the S.C. Department of Parks, Recreation, and Tourism (PRT), which oversees the Film Commission.

What’s raised the most concern is not the cut to the commission’s budget, but a provision written into the budget that allows unused film incentive money allotted for employee wages, a roughly $10 million pool each year, to be directed to the Parks and Recs’ Destination Specific Tourism Program. Those funds could then be used by cities like Charleston to market themselves to travelers.

Unclaimed funds from the rebate incentive pool have thus far been surrendered and unused. According to Peter Wentworth, a Charleston-based film producer and production manager, carrying over unused funds to help increase the next year’s budget would encourage more films to locate here and allow two major movies to film in the same year without the worry of rebates running out. Allowing excess funds to be directed to another program sets a precedent that worries Wentworth.

“In this lean budgetary year, people have been eyeballing that incentive pool that was created after years of lobbying,” he says.

PRT Communications Director Marion Edmonds explains that the excess money doesn’t go to PRT directly; it simply funnels through their budget. Finding unused money that’s already allocated and putting it to use is commonplace in tight budget years, he says, as a way of keeping programs afloat that might otherwise be cut completely.

“What the legislature has done, as the budget crisis has developed, they have given agencies flexibility to use unexpended funds in some categories to keep themselves running,” says Edmonds. “It’s not the goal of the legislature to create some hidden slush fund, but rather to say, ‘Hey, if the money isn’t used, here’s where it’s going to go.'”

Edmonds attributes the decrease in major films coming to S.C. to the economy, not on a shift in the rebate percentages. Previously, filmmakers received a 20 percent rebate for in and out-of-state workers. The rate for out-of-state crew has since been cut to 10 percent. Edmonds points out that our state was able to snag both The Notebook and Dear John away from North Carolina, which is not only the setting of both books but a powerful film-industry state.

However, Robert Redford’s forthcoming film The Conspirator seemed like a South Carolina sure thing, but the director ultimately choose Georgia. Edmonds says that’s a “win some, lose some” scenario.

“We have a very competitive product we can offer,” says Edmonds. “It’s just that it’s a dismal time, and the industry is changing. Where we can get out there and compete, we’re still going to be strong.”

Although they’re not able to release information, Edmonds says that the Film Commission is in talks to bring another major movie project to S.C. right now. And although the agency’s new budget calls for significant cuts, those numbers inevitably change as the bills make their way through the House and Senate in the next month.

Both the Charleston Film Festival at the Terrace Theatre last week and April’s Charleston International Film Festival are including full-length and numerous short films by an array of local filmmakers, some making waves nationally.

John Barnhardt, whose short film Dust will screen at the Charleston International Film Festival, says that even though the incentives are geared toward major films with minimum $1 million budgets, the trickle-down effect on the local scene is dramatic. When blockbuster films consistently locate here, a homegrown network of talented crew is formed, and this only further encourages more movies to locate here and hire locals. And as more residents become involved in the film industry, the more you can expect independent projects like Dust.

“There’s one thing that won’t ever go away, and that’s movies, because people need an escape. The naval base went away. Steel mills will find another place to burn steel,” says Barnhardt. “This is not a dying industry.”