Shreveport film rebate strategy subverts development

As the Louisiana Legislature let slip away another opportunity to trim waste even as it battles to overcome a sparse revenue picture, it's instructive to review one of the most wasteful expenditures and to realize its reach extends beyond just the state level.

Under even less trying circumstances last year, no changes were made to the state's rebate program for filmmakers. Nor have the preceding year's typically disappointing statistics raised any desire in the Legislature to stop the insanity. But this is not the only government assistance of this fashion that movie-makers can get. Perhaps not wanting to be outdone by their colleagues at the state level, Shreveport politicians (and Caddo Parish lawmakers, for that matter) seem just as eager to throw away taxpayer dollars on dubious schemes that create opportunities for a few to follow their vanities but which do not provide more and wider spread economic development.

In 2009, the city announced rebates to two film producers for monies spent in Shreveport, about $138,000 on $5.4 million spent directly. These are considered rebates of sales taxes and represented about three percent of that total. They came about in 2009 when what was considered a disappointing 2008 for that kind of production made the city want to create a junior version of the state’s program.

Why from a fiscal standpoint is anybody’s guess. The state’s program is far more generous, so this means either Shreveport competes only against other Louisiana cities or can add very little incrementally as an incentive on top of those offered by the state to entice production as opposed to out-of-state competitors. As a result, we can expect this to have next-to-no impact, if any at all, and be a poor choice for tax dollar usage.

At least it’s not as bad as Louisiana’s program, where the state gets back in increased tax revenues only about a sixth of what it doles out, at last count costing state taxpayers $100 million extra (or the equivalent of 40 percent of the budget cuts to the state’s higher education system, or enough to assist about 3,000 more disabled Medicaid recipients per year). Or as bad as any other states’ program; as studies have show over the past 15 years not a single state incentive program, Louisiana’s included, has brought in more tax dollars that it shelled out.

That so many states and local governments have gotten into this racket makes the problem only worse, as they beggar each other in trying to woo all of these artists, increasing the corporate welfare transferred from taxpayers. Worst of all, it lowers the quality of what is getting made as the cost floor gets ratcheted down. The last thing we need are more Z-movies being made instead of students or the medically impoverished getting served.

But thinking about it at the local level, why is Shreveport subsidizing mostly out-of-state entities in a narrow band that adds about zero to local economic capacity? In the last year audited statistics are available, 2008, the city reaped nearly $110 million in sales taxes, so if 2009 replicates that figure, the figure given out represents about 0.125 percent of all sales taxes. So why didn’t the city just knock off a tenth of a percent on its general sales tax instead of such a narrowly-tailored credit? This broader-based tax relief would have spurred more increased economic activity than shoveling it all to a handful of individuals bent on self-actualization and skewing the local marketplace away from more productive uses of capital and the more useful jobs created by that.

So, if you’re a Shreveporter wanting his tax dollars stretched to cover things like servicing massive infrastructure debt, money-losing hotels and convention centers, declining airport services, closed parks, and the like, tough luck. But at least you can go rent yourself a movie made here and try to pick out all the locations. After all, the unemployed and underemployed have lots of time on their hands, and the disproportionately low-skill jobs that typify the Shreveport labor market leaves salaries where about all you can afford for entertainment is renting a flick.