Last week, I blogged about Gov. Perdue’s trip to Hollywood in order to bribe millionaire movie moguls with North Carolina’s enhanced film tax credits. In that post, I mentioned a number of reports showing the negative budgetary impact such tax credits have.
In this Journal of Planning Education and Research article, the researchers cast even more negative light on the efficacy of targeted film credits. The study’s authors note that due to a lack of transparency in data collection surrounding economic impacts of film tax credits, “there is scant analysis of the economic impact of subsidies based on real numbers. Thus, assertions of the efficacy of subsidy programs as an economic development tool remain speculation.”
Some other relevant excerpts:
The location decision-making process is driven by those who market and distribute media products: the major media conglomerates. As a consequence,when states undertake subsidy programs, they are not subsidizing the movie or the moviemaker but a major transnational firm such as the News Corporation or General Electric. It is their bottom lines that are padded with public money.
…studies by state fiscal officers provide direct evidence that these programs have a considerable negative impact on state revenues. Studies in Louisiana, Michigan, Rhode Island, and Connecticut all demonstrate that state residents are essentially providing grants to film and television producers to locate production in their state.So, there’s no evidence that film tax credits have a positive economic impact, the tax credits force taxpayers to subsidize the bottom line of multi-national movie studios, and have a negative budgetary impact – thus diverting scarce resources away from teachers, police, roads, etc.
Why exactly does the Governor think this is a good idea?