The North Carolina House of Representatives is currently considering HB 713, legislation that would award tens of millions of dollars in tax breaks to billion-dollar movie studios and production companies. Supposedly designed to create additional jobs during these trying economic times, this bill will in reality only further burden the hardworking taxpayers of North Carolina.
According to a fiscal note accompanying the bill, the total amount of lost revenue associated with this tax credit is estimated to be between $40 and $60 million annually. Should the General Assembly not pass any corresponding spending cuts this session, this shortfall will inevitably have to be closed by state taxpayers.
To make matters worse, there is little evidence to suggest that targeted film incentive programs actually promote sustainable job growth. In a January 2010 report published in response to similar legislation being debated in Iowa, the non-partisan Washington, D.C.-based Tax Foundation reported that such incentives fail to both “encourage economic growth overall” and to “raise tax revenue.”
In a news conference held earlier today, House Speaker Joe Hackney cited fiscal responsibility as being one of the primary focuses of the House Democrats during the upcoming legislative session. Amidst reports that the Senate Democrats will be dropping a proposed teacher pay raise from their budget proposal, one has to wonder whether or not it is responsible for the state to waste up to $60 million in an unproven tax credit program.