So, Louisiana is losing jobs in the film and television industry. That’s a good thing that can knock some sense into lawmakers chasing the bright lights of movie stardom.
A company that rents out spaces often used for film production took some U.S. Bureau of Labor Statistics data and reported that the state lost the highest proportion of jobs in this industry since 2024. Even as there are states with much higher numbers of people working in the field, it still amounted to one of the highest absolute job losses in that time period.
It’s a comedown for the state that pioneered the notion of state subsidization of filmmaking by transferrable and refundable tax credits, passing that legislation in 1992. As many as 44 other states until recent years joined in to offer some kind of incentive, but that number has since fallen by several.
Because what all have found out is these incentives don’t have a positive rate of return and most of the taxpayer money, almost none of which flows into the pockets of their own residents (with the exception of Californians), would have been spent better on more productive forms of economic development or on badly-needed services. Louisiana is no exception; it costs well over ten thousand dollars a job created and the latest report showed overall it brought back just about 40 cents on the dollar.
The volume of business in Louisiana has decreased for four reasons. First, the other states jumping in has created a race to the bottom. Second, the state a few years ago changed program rules to cap the amount distributed, currently now down $125 million issued a year (although requests in excess of that in a year can pay out in future years). Yet despite that increased competition and diminished rewards, Louisiana still has among the most lucrative regimes where only California and Georgia can claim to have demonstrably more generous ones.
However, a third reason is that competition now comes worldwide, with countries such as some in eastern Europe offering much larger proportional subsidies at levels no U.S. state can match, to the point that it isn’t worth trying at all. Finally, with advances in technology the costs of movie-making have dropped to stunning lows, where you have YouTube-trained directors completely out of the Hollywood biosphere – avoiding its high overhead and unionized salaries – making films for under $1 million earning hundreds of times that; in other words, with costs so low films can be made anywhere for any amount that essentially moots the appeal of the credits.
These industry changes mean Louisiana should join those states dropping these programs, as the credits are evolving to be even less efficacious and more wasteful than ever. But still if nothing else happens in statute, these trends mean the drain on taxpayers should decline over time with taxpayers both having to fork over less of their money to out-of-state interests and allowing more of it retained by the state for other far more important purposes.
With the credits in place now for 33 years, once described as a transitory device to build up a state filmmaking industry, if that industry can’t stand on its own two feet by now it never will and should revert to its natural size not artificially inflated by taxpayer money. So, even if policy-makers won’t let the credits expire in a few years as planned, or better still yank them earlier, market forces might help taxpayers regardless.
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