Thursday, January 14, 2010

Race to the Bottom

I took a mean-spirited little swipe at competing U.S. states' (and by extention, over-the-border provinces') film tax credits in one of my posts the other day when, speak of the devil, the Tax Foundation, a "non-partisan, non-profit research organization" came out with a study today written by William Luther, "Movie Production Incentives: Blockbuster Support for Lackluster Policy".

You can read the Cliffs Notes here and here.

I am less than thrilled with the tax incentives being given out for up to 42% of in-state production costs by my home state of Michigan, where the Detroit Free Press reports that "Michigan's government forecasters estimated earlier this week the state's film incentives would result in a net loss of $98 million this year and $120 million in 2011."

It's interesting how each of the 44 states involved in the race think they are uniquely qualified to become the next seat of the nation's film industry.

Either you're interested in this topic or you're not. If you are interested, Luther's report debunks a lot of the canards about how giving out these tax credits will supposedly generate bagfuls of additional revenue for the states and provide lots of jobs for the unemployed. I do want to point out one particular favorite part of the report, where Luther notes (see page 11 of the .pdf file in the first link above):
State pride is commendable but it is wishful thinking that places like Lansing, Michigan will become the next Hollywood. However,that's what a series of TV spots pushed by Governor Jennifer Granholm (and starring actor Jeff Daniels) describe as happening if the struggling state keeps its film tax incentive program. Lured by film production credits, the argument goes, the rich and famous will flock to Michigan, boosting the state's economy and image in a single effort. The probability of such a transformation actually occurring is extremely small, but the dreams of Tinsel Town can die hard for citizens and statesmen.
If a company shoots on location because it's germane to the script, that's fine. But there's no need to uproot actors and production staff out of California on a wild goose chase looking for the best sweetheart deals just so you can wriggle out of paying your fair share of the costs for mundane and non-glamorous things like roads and sewer systems.

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