Another legislative session, and more wasted corporate welfare to the film industry goes out the door in Louisiana, even as other states get smarter and scale back their inefficient uses of money.
As previously warned on the heels of yet another discouraging report of this squandered money of the people, the state paid out more than $150 million extra a year each for the previous two years than benefits it received from these programs, which of a per-film basis pay tax credits to eligible producers who then keep them to reduce their tax liabilities or market them for cash. Yet despite tremendous budget pressures, the Legislature neither eliminated nor reduced the program, nor did Gov. Bobby Jindal cast a line item veto against those expenditures.
And it keeps adding up. Whether intentionally so, the reports legally required on the program are difficult to find on the Internet as they are not kept in any organized way (so use a search engine on a term like “fiscal economic impact Louisiana film incentive” to find them housed at the state site). But going back through them to the first year data were kept and adding on to the present, since then it’s almost a net $1 billion that has been transferred from state taxpayers to Hollywood moguls, independent producers short on talent, stars, speculators, those interested in tax breaks from the state, and the like – money that could have gone to education, the disabled, about paid for a new Big Charity, completely finish both legs of I-49, etc. Or it could have been used to wipe out completely corporate income taxes that would have spurred much more economic development and tax revenues than these boutique projects ever could have.
So why does this obvious profligacy continue? For one reason, some yokels in the Legislature are all impressed with the glamour associated with the film industry despite its vacuity, and they like being a part of it, especially those from metropolitan areas that get the lion’s share of production. Another reason is that those areas benefit very disproportionately from the credits and their own local governments have set up agencies to lobby for the business and even award their own corporate welfare as does Shreveport. Finally, as typical when government money flows to special interests, they turn around and use part of it to influence policy-makers to keep the gravy train rolling.
Posted by Jeff Sadow at 12:50