Rhode Island just put a cap on the tax break it gives to movie production companies.

Tourism folks there are worried the move will cause filmmakers to go to neighboring states, such as Connecticut.

That’s according to an article in The Providence Journal.

But Feinberg and Murphy dispute that the change will put an end to Rhode Island’s movie business or even seriously limit it. Since its inception in 2004, the state has issued an average of $15 million in yearly credits –– in 2006, the state gave out more than $22 million in credits, while in 2007 it gave out $13 million.

What it could do is convey an unwelcome sign to Hollywood movie makers.

“We’re sending out the message that we’re becoming less film friendly when in fact Connecticut and Massachusetts are becoming more aggressive,” said Lynne McCormack, Providence’s director of arts, culture and tourism.

Massachusetts two years ago passed legislation, which like Rhode Island’s, offers a tax break on 25 percent of all qualified production costs. Connecticut followed suit, upping those credits to 30 percent. Both states also offer sales tax breaks and have no caps.

But the investment return from the movies is questionable. A report by the Massachusetts Department of Revenue suggests that the tax incentives there have cost the state more than $100 million in lost tax revenue over the last three years. A similar analysis by Rhode Island’s Department of Revenue is now “being finalized” and is due out next month, state officials say.