by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
Georgia, with its extremely generous movie production incentives, is reaping good press with comically inflated numbers of economic impact from film productions.
Nevertheless, new research from Kennesaw State University economist John Charles Bradbury finds “little evidence” that movie production incentives help state economies. Bradbury’s research finds that film incentives help film production companies but don’t have incentives advocates’ expected spillover effects in the economy.
The results indicate that neither MPIs [motion picture incentives] in general, nor specific types or levels of tax credits, are associated with overall state economic performance. There is a weak association between low-level non-resident labor tax credits and growth of the film industry in states; thus, any gains that MPIs may have appear to be limited to the film industry and do not spill over into the overall economy. In addition to providing policy guidance regarding MPIs, this study’s findings are applicable to other types of development tax credits that states may use in the attempt to foster economic development.
That last bit is also not a new finding in economic research, but it still should put the kibosh on any state official’s enthusiasm for enormous, unprecedented “transformative” incentives for Amazon and Apple.