(FORTUNE Magazine) – For moviemakers on a budget, Canada used to be a mecca. Heck, Toronto was even cast as Providence in an upcoming Showtime series. That is, until legislators secretly gave the producers $300,000 and then passed generous tax incentives to entice them to the real Providence. (Some lawmakers weren't happy about the cash grant.)

Rhode Island is hardly alone in trying to lure Hollywood back home. Twenty-nine states--twice as many as a decade ago--offer financial incentives for film and TV production. The most generous ones are seeing results.

When Pennsylvania passed a 20% tax credit last year, for example, it promptly attracted the film Annapolis from, well, Annapolis. Louisiana is particularly generous; a $10 million production, in theory, could get a $1.7 million tax refund. The Big Easy is now one of the most popular film locations in the U.S.; production spending jumped from $20 million in 2002 to $337 million last year. That's almost enough incentive to make New Orleans the next New York. Almost. -- Barney Gimbel