New York Times: States’ Film Production Incentives Cause Jitters, by Michael Cieply:
Already on the hook for billions to bail out Wall Street, taxpayers are also finding themselves stuck with a growing tab for state programs intended to increase local film production.
One of the most shocking bills has come due in Louisiana, where residents are financing a hefty share of Brad Pitt’s next movie — $27,117,737, to be exact, which the producers will receive by cashing or selling off valuable tax credits.
As the number of movies made under these plans multiplied in recent years, the state money turned into a welcome rescue plan for Hollywood at a time when private investors were fleeing the movies. But the glamour business has not always been kind to those who pick up the costs, and states are moving to rein in their largess that has allowed producers to be reimbursed for all manner of expenditures, whether the salaries of stars, the rental of studio space or meals for the crew. …
By this year, about 40 states were offering significant subsidies, turning the United States into what the Incentives Office, a consulting firm in Santa Monica, Calif., has called the New Bulgaria. It is a reference to what was once the film industry’s favorite low-cost production site.
Virtually all of the programs use a state tax system to reimburse producers for money spent on movies or TV shows shot in the state. Some, like Michigan’s, simply refund a percentage of expenditures to the producer. Others, like Louisiana’s, issue a tax credit that can reduce the taxes a production pays or be sold to someone else. Either way, the state gives up revenue that otherwise would be collected to put money in the producer’s pockets.
Advocates, of course, argue that these programs create jobs. …
Elsewhere, however, critics have sharply challenged the notion that state subsidies for the film business can ever buy more than momentary glitter. “There’s no evidence yet that this is a particularly efficient or effective way to create jobs,” said Noah Berger, executive director of the Massachusetts Budget and Policy Center. The nonprofit center reviews budget and tax policies in Massachusetts, which is spending about $60 million a year on producer credits. A recent study by Mr. Berger’s center pointed out that the state’s film credit, at 25 percent, is five times higher than that offered to those who build in designated economic opportunity areas, and more than eight times the state’s standard investment tax credit.
4 responses to “NY Times: Financial Meltdown Causes States to Rethink Tax Subsidies for Movies; $27m for Brad Pitts’ Next Film”
But what about Brad Pitt’s economy?
There’s nothing like a financial catastrophe to focus your spending priorities. Some states are pondering whether financing Hollywood projects is…
But what about Brad Pitt’s economy?
There’s nothing like a financial catastrophe to focus your spending priorities. Some states are pondering whether financing Hollywood projects is…
But what about Brad Pitt’s economy?
There’s nothing like a financial catastrophe to focus your spending priorities. Some states are pondering whether financing Hollywood projects is…
But what about Brad Pitt’s economy?
There’s nothing like a financial catastrophe to focus your spending priorities. Some states are pondering whether financing Hollywood projects is…
But what about Brad Pitt’s economy?
There’s nothing like a financial catastrophe to focus your spending priorities. Some states are pondering whether financing Hollywood projects is…
But what about Brad Pitt’s economy?
There’s nothing like a financial catastrophe to focus your spending priorities. Some states are pondering whether financing Hollywood projects is…
But what about Brad Pitt’s economy?
There’s nothing like a financial catastrophe to focus your spending priorities. Some states are pondering whether financing Hollywood projects is…
But what about Brad Pitt’s economy?
There’s nothing like a financial catastrophe to focus your spending priorities. Some states are pondering whether financing Hollywood projects is…
But what about Brad Pitt’s economy?
There’s nothing like a financial catastrophe to focus your spending priorities. Some states are pondering whether financing Hollywood projects is…
I bet it’s very easy to overestimate the value of filming in a particular state. I can imagine Louisiana legislators seeing this as product placement — but the only time I really notice the background in a movie is when I’m already familiar with where they’ve filmed it.
But for some reason, the movie industry seems to play by different economic rules. For a business Americans are still good at, it sure doesn’t show a good (or stable) return on investment.