Folks, I gotta give credit to those fine writers over at the Bluegrass Policy Blog for calling my attention to this article below that shows what a bad idea it is to offer film studios tax incentives.  At least now I don't feel like a lonely voice railing against the darkness.  Plain and simple, until the film industry can caption more of it's offerings, the deaf and hard of hearing community should be screaming loud and clear to their lawmakers 'NO!".  From their attempts to get $240 million plus inserted into the recent federal economic stimulus bill, to this recent steamroll through the Kentucky legislature, the Motion Picture Association of Americas' lobbyists have been doing their level best to earn those big lobbying fees they bill out.  Pay attention to the portion that I have highlighted in red in the article.

February 27, 2009

Pennsylvania Considers Dropping Film Tax Credit; Nebraska Considers Adopting One

by Joseph Henchman

We applauded Wisconsin Governor Jim Doyle (D) a few days ago for proposing elimination of the state's film tax credit. We noted:

Bribing companies to bring economic activity to your state means one of two things. Either they were going to come anyway and you're just wasting tax dollars for no benefit, or they weren't because something about your state isn't attractive to business. Picking a handful of industries to shower benefits on undermines the creation of a broad-based welcome mat for all types of business.

The Commonwealth Foundation reports that similar proposal from state Sen. Pat Vance is now under consideration. Pennsylvania spends $75 million per year on the program, which provides a 25% tax credit for films that spend at least 60% of their budget in the state. Vance cites a new state study showing that the program generated just $18 million in new tax revenue. (Emphasis added by me).

Aside from film tax credits providing no net benefits and diverting attention from true tax reform, states should be aware that as each state tries to outbid each other for these productions, the costs have risen to the point that a new entrant stands no chance. Michigan is basically paying out cash to films, and many other states have very generous credits. California recently upped the ante on their film credit program, so now you have to contend with the credit and their nice weather.

So for a state like Nebraska, which has no film tax credits but still manages to attract productions, one option is to break the bank trying to wrest a few productions out of states determined to subsidize this industry. Another option is continuing attracting the productions it does, avoid picking winners and losers and complicating the tax code, and otherwise sit back and enjoy movies subsidized by other states' taxpayers. Alas:

“By shooting in Nebraska you’ll get everything else, the great people and all of that, but you will spend more than shooting in Iowa," said Robinson.[...]

As for tax incentives, the state is aware of the disparity. "We're working toward creating a really effective film incentive package to place before the Unicam in 2010," said Omaha Film Commissioner Kathy Rocco.

Unbelieveable that ANY state would consider keeping or proposing a tax incentive that is shown to be such a hit or miss proposition.  Isn't Pennsylvania right now considering closing their school for the deaf?  I wonder how much of that net loss of $57 million dollars incurred by the state for trying to lure filmmakers there would have benefitted the school for the deaf in Pennsylvania?  I'm pretty sure they could keep the school open and there wouldn't even be a debate about whether or not to close it if it were not for tax boondoggles such as this.  And the scary thing is, is that incentive is almost word for word the same as the proposed one in Kentucky.  Kentucky has proposed now, a 20% refund on the income tax.  As evidence by the above and related articles, the problem with this, is that most of the money spent goes toward out of state workers who fly in, film, and fly out.  It amounts to little more than a perk for the fim director, really.