Tax Incentives for Film Production? We’ve Seen This Movie Before: When will state lawmakers learn that throwing money at Hollywood producers is a policy guaranteed to flop?

By Pat Garofalo and Michael LaFaive. Mr. Garofalo is director of state and local policy at the American Economic Liberties Project. Mr. LaFaive is senior director of the Morey Fiscal Policy Initiative for the Mackinac Center for Public Policy.. Excerpts:

"According to Michigan’s nonpartisan Senate Fiscal Agency, the state doled out up to $186,519 in taxpayer money for every job created in 2008. These jobs weren’t the kind that would have benefited the state in the long run. In 2009 an outside consultant hired by the state found that 2,763 short-term movie jobs had the same economic impact as merely 254 full-time, yearlong jobs. Even that oversells the benefit, since film industry positions are often filled by people from out of state.

Remarkably, after spending half a billion dollars on film incentives between 2008 and 2015, Michigan saw only a modest increase in film-industry jobs. In 2013 the state’s jobs agency reported the program created no full-time jobs. As for revenue, Michigan Economic Development Corp. documents we’ve seen demonstrate that Michigan’s film program lost the state money in 2014."

"Louisiana was the first to spend big money on subsidies for moviemaking. It had a small program that started in 1992, but a major expansion in 2002 caused scores of major productions to rush to the Bayou State. That inspired other states to start their own programs, and Louisiana had to spend to keep up. Costs spiraled out of control. Eventually lawmakers capped the subsidy program."

"State film incentive programs don’t create permanent jobs that benefit residents. A 2018 survey of studies by Kennesaw State University economist J.C. Bradbury found that they return an average of only 27 cents per dollar invested. A study published in March by the Massachusetts Tax Expenditure Review Commission found the return on investment in the Bay State was 14 cents. In 2015 Maryland’s Department of Legislative Services reported to the General Assembly that film subsidies hurt the state’s economy, because the money could have been spent on things that actually create jobs and boost wages. In Kentucky, where subsidies were recently expanded, policy makers tried to avoid this pesky reality by releasing a taxpayer-funded study that ignored any evidence showing the subsidies’ failure."