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No justification to give more money to make movies

Shreveport’s City Council, mayor, and the Caddo Parish Commission recently demonstrated that these yokels remain as blinded as ever by the chimerical bright lights of Hollywood.

The Council unanimously, and with Mayor Cedric Glover falling all over himself to sign the ordinance into law as quickly as possible, voted to relieve filmmakers working in the city of at least some city sales tax. The measure permits as much as a $150,000 rebate (depending upon just what activities are paid for and how they are taxed, perhaps as much as $6 million in expenditures) but any concern that spends at least $300,000 in the parish is eligible. Repeat performances increase the ceiling even more. The parish came up with a much less intrusive, but equally as obnoxious program that will rebate as much as $23,200.

It’s more than just star-struck politicians who now get the chance to puff out their chests a little more and will find more opportunities to rub shoulders with film industry types. Slick producers and glad-handing lobbyists (which include city film officials) also praised the move to the skies. As well they would – the former now can get corporate welfare and the latter can justify their fees and paychecks.

The losers of all of this, of course, are the citizens of Shreveport. Because the one thing the politicians, the producers and others in the industry, and the lobbyists never will admit and desperately do not want the public to know is that these kinds of programs cost far more taxpayer dollars than they ever return in revenues to government.

A couple of months ago the state’s latest report on its film tax credit programs came out. Supporters of them seized on one figure that showed $763 million in “economic benefit” was produced by the presence of the state credits. What they ignored and tried to distract from was the fact that of the about $115 million that the state paid out in credits, it saw only $15 million from taxing these and derivative activities come back to it. The other $100 million or so simply represented a transfer of wealth from taxpayers to a small handful of people who like to make and invest in the making of movies – many not even Louisiana citizens.

It’s not like any of this is news. Five years ago the Legislative Fiscal Office observed that only around a sixth of the money that goes out comprising these credits comes back. (And it conceded this to be a generous estimate as it assumed no film activity would have occurred at all without the credits.) This corroborates what other policy studies of programs of this nature across the country have shown since then, research which also demonstrates these credits tended to distort economies away from more productive uses of these funds.

So if a child wonders why Shreveport pools aren’t going to be open, or if city business owners struggling in harder economic times reflect upon how city sales taxes may be pushing them out of business, or parish residents wonder about where to get the resources to fix animal control problems, no doubt they will rest easier knowing that, in addition to the almost $23 per man, woman, and child that each Louisiana resident transferred in 2007 to people running around making movies, that these critical resources at the local level will line even further the pockets of a few. Glover and the Council complain about how they need to make budgetary ends meet, yet they foolishly embark upon a plan that analysis shows will drain even more dramatically city resources – or funds that if left in the economy by a general lowering of sales taxes probably would increase economic activity and the resulting government revenues far more than by taking it from the productive citizenry who don’t want bribes to be here and giving it to nomads who insist they have to have these handouts to have anything to do with the city.

The state faces a similar question as laws governing the existing credits, supposedly transitory in nature to allow the film industry to develop and which are supposed to wither away in a few years, look to be altered by state politicians this legislative session. One hopes the advocates of extending these credits are asked to demonstrate the hard numbers about how economically the state is better of with them than by using the funds in alternative ways or by leaving the money in the hands of its earners, and maybe these officials won’t be so smitten by the glitz as were the hayseed Shreveport and Caddo elected officials. So far they haven't been, and the bills look to be on their way for approval to make the state credits permanent.

I’m all for the making of movies – a significant portion of my academic career has been spent studying and teaching about politics and the cinema: presenting research here and abroad, publishing in the area, serving as an officer in the professional organization dedicated to the study of this, and teaching courses on it at three different universities. But government subsidizing the making of movies at the expense of other vital services and/or at the sufferance of other taxpayers cannot be justified on any economic or moral grounds.

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