REPEAL THE HOLLYWOOD TAX CUTS! Although, in the case of North Carolina, it’s a Hollywood Handout.
The program, which last year replaced a more expensive film tax credit, received $10 million in the last fiscal year. The House proposed $40 million annually, while the Senate wanted it kept at $10 million. The state chapter of Americans for Prosperity called the appropriation a “Hollywood handout” and urged email recipients to oppose the spending.
“In lean times for families and small businesses, handing hard-earned tax dollars to Hollywood film executives is reprehensible and irresponsible,” group spokesman Joseph Kyzer said in a release.
Film industry supporters argue movies, TV series and commercials generate jobs that make grant payments a net positive for the state. Film boosters blamed the loss of the tax credit program for keeping productions out of the state.
As I noted in the Wall Street Journal a while back, these things are just cronyism:
Of the nine “Best Picture” nominees in 2012, for example, five were filmed on location in states where the production company received financial incentives, including “The Help” (in Mississippi) and “Moneyball” (in California). Virginia gave $3.5 million to this year’s Oscar-nominated “Lincoln.”
Such state incentives are widespread, and often substantial, but they don’t do much to attract jobs. About $1.5 billion in tax credits and exemptions, grants, waived fees and other financial inducements went to the film industry in 2010, according to data analyzed by the Center on Budget and Policy Priorities. Politicians like to offer this largess because they get photo-ops with celebrities, but the economic payoff is minuscule. George Mason University’s Adam Thierer has called this “a growing cronyism fiasco” and noted that the number of states involved skyrocketed to 45 in 2009 from five in 2002.
In its 2012 study “State Film Studies: Not Much Bang For Too Many Bucks,” the Center on Budget and Policy Priorities found that film-related jobs tend to go to out-of-staters who jet in, then leave. “The revenue generated by economic activity induced by film subsidies,” the study notes, “falls far short of the subsidies’ direct costs to the state. To balance its budget, the state must therefore cut spending or raise revenues elsewhere, dampening the subsidies’ positive economic impact.”
Like most government subsidies, these serve mostly to benefit the people who dole out the cash. In this case, it seems largely about letting state politicos hobnob with Hollywood types and feel special.