Lest you think it was just another New Orleans alphabet-soup political organization, the Louisiana Industry for Film and Entertainment announced its formation for the purpose of promoting the state’s film industry. But maybe its real motive is to help its members to continue reaching into the wallets of Louisianans.
Almost a decade ago the state got into the subsidization of the film-making industry in a big way through the offering of substantial tax credits. That largesse has helped the state, according to the group’s press release, rise to third place behind only history-rich California and investment-rich New York as a location.
Not mentioned, naturally, is the hundreds of millions of net loss to the state in terms of tax dollars going out in this corporate bribery for the industry compared to the triggered by these breaks. That should not surprise the informed who know that studies show that no jurisdiction even comes close to breaking even in this regard, and specifically in the case of Louisiana one dollar comes back for every seven spent. The jobs typically created are temporary with next to no upward mobility, and with misleading assumptions thrown about concerning them they actually understate the economic distortion these programs instigate.
Unfortunately, state and local politicians have been blinded by the bright lights and seduced by the glitz and glamour of the industry and no serious attempt has been made to reduce or eliminate this worthless welfare – even though this announcement ought to get people to reevaluate the situation; the state has difficult budgetary times ahead where the $100 million-plus doled out for this annually can be better used elsewhere, and the industry has matured to where such subsidies no longer are needed.
When the idea first hit the Legislature in 2002 in special session, proponents argued one benefit of the program was it could assist a small industry build up infrastructure, both in physical and human capital terms. Surely after nearly 9 years and hundreds of millions of dollars this has been done. In 2006 unwisely the Legislature removed its then-expiring sunset provision and made them permanent. Instead, legislators should terminate the credits at the end of this budget year.
Which perhaps is an unstated reason why this group has come to (wait for it) life. Enjoying living off Louisianans, the principals may understand that policy-makers may catch on that, after all this time, if the breaks haven’t spawned an indigenous industry able to stand on its own, it never well, focused on this thought by the looming budget shortfall. If its message is to continue them, politicians must put the public’s interest first and ignore private interests wanting a handout by ending this giveaway.
Posted by Jeff Sadow at 07:30