Republicans of all people want to bribe movie makers to make movies in their state.
Two Colorado Republican legislators, State Senator Nancy Spence and State Representative Tom Massey, are sponsoring , which would impose a 10-cent per ticket tax fee on movie tickets in Colorado, with the money to be used to incentivize/bribe movie production companies to make films in the state.
The details of the incentives/bribes were laid out in a bill in last year’s legislative session, , which Massey and Spence also sponsored, essentially a gift from Coloradoans to cover 10% of the film’s spending in Colorado, including up to $3 million for any one employee or contractor, as long as at least 25% of the film production’s work force used in Colorado is made up of Colorado residents.
It doesn’t matter that the movie business is “cool,” or that other states are getting more movies made on their soil by offering ranging from “transferable tax credits,” to rebates that sound like the latest Groupon (make a movie, pay no sales or hotel tax!), to New Mexico even offering “a 0% loan, with backend participation in lieu of interest.” It matters that this is the worst sort of corporate welfare and exactly the sort of thing Republicans should oppose tooth and nail.
Perhaps Senator Spence didn’t notice, but of the 14 other State Senate sponsors of HB 10-1180, only two were Republicans — and one, Al White, is Colorado’s prototypical RINO. So here she comes, playing a game that we usually expect from Democrats, supporting a tax increase under the guise of a “fee” in order to avoid the headache of allowing voters to decide on a tax hike as required under our Taxpayer Bill of Rights (TABOR).
Perhaps Spence and Massey didn’t notice, but a new study by the Center on Budget and Policy Priorities concludes that state film subsidies offer “Not Much Bang for Too Many Bucks.” The study makes a few key points:
• Since 43 states have film subsidy programs, “no state can ‘win’ the film subsidy war.”
• Subsidies cost states more than they generate in revenue, not least because they “incorporate one of two rare features into their film tax credits — refundability or transferability — that makes them especially generous and therefore costly to sponsoring states.” States “must therefore cut spending or raise revenues elsewhere.”
• Because most film production talent is in people who live in Los Angeles and New York, “the best jobs go to non-residents,” leaving for in-state hires “spotty, part-time, and relatively low-paying work that is unlikely to build the foundations of strong economic development in the long term.”
If Spence and Massey had done a little homework, they might have found the latest report by the State of Massachusetts on the impact of its Film Industry Tax Incentives. Some lowlights:
• “In 2009, the cost to the state per Massachusetts resident job created was $324,838…. For the period 2006 to 2009 the cost per Massachusetts resident job created was $133,055.”
• From 2006-2009, the state took in 14 cents of revenue for each $1 of tax credit generated and the total cost to the state was $224 million.
• Supporting the point made by the CBPP study, from 2006-2009, more than twice as much of the film making-related spending which the state’s tax subsidy applied to went to non-Massachusetts residents and business than to in-state residents and businesses.
Perhaps the most incredible outcome from Massachusetts, and one that should keep all legislators, but especially Republicans, from supporting film industry tax subsidies is that the program has compelled the state to reduce spending on other areas, presumably including health, education, and safety, by over $135 million in order to offset the film subsidies’ net cost to the state and allow the state to maintain a balanced budget.
And finally, perhaps Spence and Massey didn’t notice that quite a few states, including the film subsidy pioneer New Mexico, have or will soon curtail their film subsidy programs. In her recent State of the State address, New Mexico Governor Susana Martinez called for “reducing the state’s film subsidy from 25% to 15%,” noting that:
This has been incorrectly referred to as a tax credit. It has nothing to do with taxes. The way it works is when a film is made in the state, New Mexico taxpayers cover 25% of the costs. It’s a simple and straight-forward subsidy — 25 cents on the dollar. And it’s been taken advantage of…. One film company spent $100,000 chartering an actor’s private jet and New Mexico taxpayers paid $25,000 of it.
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H/T to National Review Online