The state official who decided to lay off most of the state's film office staff defended his decision yesterday, but film industry executives and artists warned that Hawai'i may miss out on some lucrative Hollywood projects.

The Lingle administration has put four of the six staffers in the film industry branch, including state film commissioner Donne Dawson, on a list of more than 1,100 layoffs of state workers in November. Another staffer in the film office has retired, so only the manager of the Hawai'i Film Studio at Diamond Head would remain.

The film office coordinates permits and tax credits for film and TV projects and helped generate $146 million in spending in the Islands last year.

Ted Liu, director of the state Department of Business, Economic Development and Tourism, said the layoffs do not mean the film office is closing. He said film office functions will be performed by other staffers or shared with other state departments and the counties. But he said the state's budget deficit means the state can no longer afford specialists like Dawson and her staff.

"The state is no longer in the position to provide services that it would like to provide or in the manner that we've provided them in the past," Liu told a joint informational briefing of the state Senate Economic Development and Technology Committee and the House Economic Revitalization, Business and Military Affairs Committee.

Dawson told the briefing the film office helps process close to 1,000 permits a year and helps certify local production and high-technology tax credits. Office staff act as troubleshooters when obstacles arise between filmmakers and state and county agencies, she said.

"I'm the one they call on when things are not going well and fires need to be put out."

Film industry executives and several artists and laborers who work on local film projects attended to support Dawson.

Jean Higgins, co-executive producer of the hit TV drama "Lost," told lawmakers that the layoffs could influence how Hollywood considers Hawai'i for future projects. She said her first telephone call when scouting locations is the local film office.

"You're essentially telling the film industry, 'Don't come here, we don't want you,' " she said.

Entertainer Willie K was also blunt. "If you take this out, both nationally and internationally, we're screw- ed," he said.

Liu suggested the film industry should have a role in financing the film office. He said, for example, that fees on the film industry could be used for a special fund that may help insulate the film office from future general-fund budget cuts.

"Industry benefits from the services of the film office. Industry obviously would prefer not to pay, but if the option is no service, or lessened service and paying something, there is a possibility of a partnership," he said.

State Sen. Rosalyn Baker, D-5th (W. Maui, S. Maui), asked Liu why he did not consult with the film industry on the layoffs. She also questioned why the state has been unable to provide an estimate of how much money will be saved through layoffs.

"There was never any 'we,' any talk about partnership, any attempt at collaboration," Baker said. "And so what we're left with are decisions that it seems to me were based on your lack of understanding of the function of these various offices and your lack of understanding of the competitive nature — if we just want to deal with film — of that particular industry."

Liu said he had the responsibility to reduce the department's budget and noted that the Lingle administration opted for layoffs only after furlough plans were blocked by public-sector labor unions in court. He said the administration has not come up with an estimate of the total savings from layoffs because some union workers have the right to bump junior colleagues to avoid layoffs.