SB 943, a bill that would increase the current tax credit for film production from 15% to 25%, is being heard today for a second hearing in the Senate today at the 3:00 session. An Ernest and Young study commissioned by the NC Film Office examined the impacts of the proposed increase. Proponents of the credit would have you believe this is a great way to attract money and much needed jobs to the state, but a closer look shows it is not as good as it may seem. From the study:
[The] level of credit cost and the estimated state and local tax impact results in a combined state and local return on investment of 0.92 in 2010 and 0.91 in 2011. In other words, for each dollar of state credit cost, state and local taxes would increase by $0.92 in 2010 or $0.91 in 2011. Ignoring the local tax impact that results from the 25% credit rate, the state return on investment is projected to be 0.69 in 2010 and 2011.
Does the state really need to be making more bad investments right now?
[update] The Senate decided that we do: the bill passed the second reading 26-19.
