Here at the Locke Foundation, we’ve written extensively on incentives, including a recent publication by Jon Sanders on Film Incentives.  It was therefore with great interest that I read an article in today’s News & Observer about film incentives and The Hunger Games.

The first Hunger Games movie was filmed largely in North Carolina and it created some hype.  There has been much speculation about a boost in tourism associated with the film.  Maybe that’s happened and maybe not.  It’s really pretty hard to know for sure.  But here’s what is certain.  There will be a Hunger Games sequel out next year, and it will not be filmed in North Carolina.  Instead, much of it will be filmed outside Atlanta.

The News & Observer gives this explanation:

The original film’s location got chalked up to the state’s film incentive, which offers filmmakers a 25 percent refundable tax credit. But the state only qualifies movie salaries up to the first $1 million while Georgia is more generous. That likely influenced the Atlanta decision, Syrett said, especially since the young actors’ salaries have ballooned since the first film.

This is one of the many problems with these sorts of incentives.  Once the state starts offering incentives to film makers, then other states have reason to do the same, but to an even greater degree.  And then, if North Carolina wants to compete, we have to increase our incentives.  On and on it goes, with taxpayers pumping more and more money into the hands of actors, studios, and production companies.  Over time, the benefits become less and less able to justify the costs.

Instead, North Carolina should focus on creating an environment that is good for all businesses – film or otherwise – by lowering tax rates and creating a light and stable regulatory environment.  Those are conditions that will continue to attract businesses and grow our economy in a sustainable way, not just bring us the occasional flashy film.