by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Last week, before Louisiana governor Bobby Jindal declared himself a 2016 presidential candidate, the governor quietly signed legislation into law that caps state tax credits for film in the state at $180 million per year that will save the state $77 million annually — a wise move, given that the Louisiana government currently faces a $1.3 billion budget deficit. In response, Hollywood producers have threatened to take their film projects to states that offer larger film tax credits, such as Georgia.
Capping film tax credits is a new position for Governor Jindal. He has largely been supportive of tax credits, which were originally introduced in the state in 2002. Becoming a 2016 Republican presidential candidate may have given him a new view on special-interest tax credits and how they can threaten a state’s fiscal outlook.
While Louisiana is not as well known as Los Angeles for its film industry, New Orleans in recent years — since Louisiana’s generous tax credits were introduced in 2002 — has become a popular location for filming some of Hollywood’s highest budget films. …
… Until now, there have been no limits on credits extended by the Louisiana Motion Picture Tax Incentive Act, which provides a 30 percent tax credit on all qualified motion-picture expenditures, with no project or program cap and a 5 percent credit for payroll expenditures on Louisiana residents.