by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
The Senate budget would cut $1 million from the $31 million Film and Entertainment Grant program. It would then make $16 million of it nonrecurring (which would mean that the next budget would not start with the presumption of $30 million).
Also, the Senate budget would transfer funds out of the film grant program and into other government programs. For 2019-20, it would transfer $23 million:
The following year, 2020-21, it would transfer $9 million:
It’s good that the Senate wishes to pare down the film grants. It gets us closer to the best incentives policy.
The best incentives policy for the state to incentivize film productions as well as corporate relocations, big businesses expansions, and small business growth is still lowering corporate tax rates across the board. All tax incentive programs starts with that understanding, anyway: If we give this industry a tax break, it’ll make this industry more productive! So why not cut to the chase and do it for all industries?
Beyond that, there are good reasons to at least pull back from the film grant, if not repeal it altogether. As shown here time and again, film incentives are net money losers for the state. They pretty much only benefit the outside film production companies.
But recently, the actions of major production companies and certain directors and actors have made it clear they think the incentives give them carte blanche to hold the state’s political culture hostage to their particular political tastes.
In the news this week, “Disney, Netflix and WarnerMedia say new abortion law may push their movies out of Georgia,” writes CNN of backlash to Georgia’s law banning abortion in cases in which an unborn baby’s heartbeat can be detected. There is now talk of Hollywood boycotting Louisiana for the passage of a similar bill. They’re also targeting Alabama, Mississippi, and Iowa for having un-California politics.
It ought to bring to mind pressure brought on North Carolina over House Bill 2. Never mind that Hollywood doesn’t understand extortion. “Give us what we want or we won’t take your money” is laughable.
Be that as it may, Hollywood does and will use state film incentives as a tool to try to influence state policy.
Happily, the best way of politely telling them to butt out is the better choice for the state’s overall economy, too. Get rid of the incentives and honor the intent behind them by extending tax incentives — i.e., a lower tax rate — to everyone.