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11.3.12

LA citizens give up hundreds of millions to win "Oscar"

No doubt state residents are all jazzed up about the recent Motion Picture Academy Award for Best Animated Short Film to a state outfit, Shreveport’s Moonbot Studios. We should be; after all, we paid for it.

While the state is not allowed to release exact names and figures, from comments made by the studio’s principals, they have accessed the state’s motion picture film tax credits, reducing their costs by an unknown amount. They aren’t the only ones; the latest data show that in 2009, the program rebated out $182.4 million, garnered only $24.8 million in net additional taxes attributable to that activity, for a net loss to taxpayers of $157.6 million, or a return of about 13.5 cents on the dollar.

This isn’t a new pattern. Since the first certified credits began trickling out in 2004 through 2009 (as found here, here, and here), they have produced $440 million more in forgone state tax collections than additional state taxes collected attributable to them. Hard data aren’t yet available for 2010 and 2011, but estimates suggest that figure even may have been doubled since. What we do know accounts for roughly $100 for every state resident.

Other studies (such as this and this) empirically have validated the general theory that this kind of tax credit anywhere doesn’t pay for itself – all they do is subsidize the making of movies beyond what without this distortion of corporate welfare the market demands. Yet Louisiana persists in continuing and seems unlikely to change; certainly not in this upcoming session where such repeals are prohibited.

So, if you’re a Louisiana citizen, next time you’re in the neighborhood of Moonbot Studios, ask to see the statuette. It was your blood, sweat, and tears that went into financing the effort that won the prize, and thereby it’s as much yours as the film’s creators’. You might as well, because you aren’t going to get much else from your dollars going to supporting the lifestyles of the rich and now famous.

1 comment:

Anonymous said...

Jeff, can't argue with anything you've said here. My concern is that, once the generous state tax credits end (can they go on forever?), the movie industry will pack-up and leave Louisiana with the tax payers left "holding the bag". Of course, no elected or public officials will be accountable if and when this happens.