It turns out that a network early-afternoon talk show decided to decamp
to New Orleans for the week leading up to the game, enabling it to score
perhaps a million dollars in state tax credits from two kinds available for programs of
that nature. This begs the question of whether it would have made its way to
the state without them and, given the glitz surrounding the event, it might
have anyway. If so, the state threw away a million.
Extending this to entertainment programming in general, the fact is
some of those made in Louisiana would have been made without a single cent
tossed some fat cat’s way. Of course, many did come precisely because of the
credits and would not have otherwise. But since in aggregate the program has
cost state taxpayers over $800 million more than tax revenues created by this
activity, the state would have been better off without the credits as even if
they only returned a fraction of the subsidized revenues in state tax revenues,
the costs would have been zero (instead of the estimated $135 million gained
revenues versus approaching $1 billion in tax dollars forgone).
Even if every single movie, reality show (ever wonder why so many these
days seem to be in Louisiana; why not when the state or a broker will cut you a
check for 25.5 to 29.75 percent of your variable costs depending on the kind of
credit and if you sell them back for the mandated rate of 85 percent?), and
talk show that has descended on the state in the past decade had not appeared,
the state still would be hundreds of millions of dollars better off. And, in
this instance, it’s not like anything was created that wasn’t already there;
the show still would have gone on in absence of those credits, if not in the
state then back in New York or elsewhere. All the state did was effect a net
transfer of wealth from its citizens to CBS Corp.
Proponents of the program are loath to admit it’s a net money-loser for
the state, but always try to justify it by talking in terms of “jobs created”
and “economic activity.” But, given its money losing, the only relevance these
criteria have is if the jobs stay and activity continues without so much, or
any, of the credits being paid out. And, in fact, originally the program was
conceived in these loss leader/startup terms, that they would provide a period
for the building up of infrastructure that would make them no longer necessary.
But only a few years after they went into effect, instead of giving them a
sunset or continuing a sunset provision, the Legislature went ahead and
overwhelmingly approved of making them permanent.
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