State Subsidies To Hollywood: Almost Every Program Has Been A Dismal Failure, Costing Taxpayers

from the where-are-those-jobs? dept

So we’ve had a couple stories recently about the immense failures of taxpayers being forced to shovel money to Hollywood studios via various local “incentive” programs to try to convince the studios to film their movies in various locations. The studios, with the help of the MPAA, of course, continually argue that these programs create jobs, jobs, jobs. However, as the NY Times investigation pointed out, those “jobs” really don’t seem to be appearing. Instead, film crews ship in a crew from LA or NY and hire just a couple of locals for low-level jobs… which last a few months and that’s it. The impact on the local economy appears to be minimal. And, basically, the studios just keep asking for more money playing different locations off of one another.

Adding more data to this mess (which has grown massively in just the last decade), Adam Thierer points to a survey of studies looking at how successful those programs have been in various states… and found that nearly all of them have flopped. The various studies show that the return for such subsidies tends to be less than par (i.e., a loss) in nearly every state studied. There were only two exceptions: New York and New Mexico — and both of those studies were done at the behest of the local film offices. With New Mexico, in particular, a separate, independent study found the exact opposite to be true, and found that the subsidy resulted in significant costs to the economy.

“Based on fanciful estimates of economic activity and tax revenue, states are investing in movie production projects with small returns and taking unnecessary risks with taxpayer dollars,” noted a 2010 Tax Foundation study. “In return, they attract mostly temporary jobs that are often transplanted from other states.” Studies of specific state incentive programs confirm this finding, almost universally finding miniscule revenue gains for every dollar of film subsidies offered. The adjoining table, derived from a meta-survey of film incentives studies by the Center on Budget & Policy Priorities, illustrates how much revenue was lost per net job created by film tax credits as well as how little revenue each program generated for every dollar of state revenues awarded.

 State Net Revenue Foregone per Net Job Created by Film Tax Credit Revenue Gained from Feedback Effects per  Dollar of Film Subsidy Claimed($)
Massachusetts $88,000 $0.16
Connecticut $33,400 $0.07
Louisiana $16,100 $0.13
Louisiana $14,100 $0.18
Michigan $44,561 $0.11
New Mexico $13,400 $0.14
New Mexico ($400) $1.50
Pennsylvania $13,000 $0.24
New York ($2,000) $1.90
Arizona $23,676 $0.28

The only two studies that have revealed positive results for such film incentive programs were both conducted by Ernst and Young on behalf of the New York and New Mexico film offices. All others have shown consistent negative returns.

In case it’s not clear, that last column shows the return per dollar spent on subsidies. If it’s less than a dollar, it means that taxpayer money is being lost and it’s not benefiting the local economy. If you’re wondering why there’s such a big difference in those two New Mexico studies, the full report goes into detail of just how weak the methodology was for the NM study claiming economic benefit. It involved massively overestimating the tourism benefits, contrary to actual data, and then double counting much of the supposed “benefit.” For example, the study claims that a significant “benefit” is the salaries provided to producers and directors… but those are rarely local residents:

As discussed above, such highly skilled talent tends to be imported from other states, especially California and New York. Consequently, these individuals likely spent a much smaller percentage of their compensation in New Mexico than resident employees did. While non-resident employees do spend money on food, housing, meals, and other items while working in New Mexico, those expenses are covered by allowances, which did qualify for the film subsidy and, therefore, whose economic impact had already been taken into account. E&Y’s apparent assumption that highly paid non-resident employees spent most of their salaries in New Mexico, on top of their living allowances, amounts to double counting.

Basically, nearly all of the evidence shows that these programs harm the economy, rather than help it. But they do seem to help studio bosses.

So why are states (and countries) so eager to hand over taxpayer subsidies to Hollywood?

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Comments on “State Subsidies To Hollywood: Almost Every Program Has Been A Dismal Failure, Costing Taxpayers”

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141 Comments
fogbugzd (profile) says:

Politicians want to be seen as doing economic development activities. The problem with real economic development activities is that they tend to disrupt existing businesses, which is a big no-no for most politicians. And so they have to select things that are clean and benefit local businesses rather than providing local competition. That leaves a very short list. In fact, until recently just one of the few safe economic development activity was promoting tourism.

Movies look like a godsend to politicians. It is clean. It helps local businesses but does not compete with them. It is flashy and the public (at least the public outside New York and California) loves to see their streets being closed so that someone can film a car chase. As an extra freebie the politicians often get to rub elbows with some movie stars.

How can any self-respecting local politician avoid throwing fistfuls of money at the movie studios?

Anonymous Coward says:

This article is ridiculous, Masnick, even for you.

Your intellectual dishonesty truly knows no bounds.

Of course they ship in crews, they’re making a fucking movie. Do you think they can just go down to the corner grill and ask Clem to be a key grip?

A big part of the economic benefit for the states and municipalities comes exactly from these crews and other participants coming to the location; a town’s revenue goes up via restaurant and hotel bookings, and the scenery functions as a world-wide tourism commercial for the state/town.

Of course you know this already, but you’re too much of an intellectually dishonest slimeball to pass on an opportunity to slam Hollywood, as you despise them because they are against piracy, something you clearly love more than blowjobs and god knows what else.

Chris Rhodes (profile) says:

Re: Re:

A big part of the economic benefit for the states and municipalities comes exactly from these crews and other participants coming to the location; a town’s revenue goes up via restaurant and hotel bookings

So if you take money from the owner of a hotel through taxes, skim some off the top (for government bureaucrats), and then give the remainder to a third-party who uses it to rent a room from that same hotel owner, how have you stimulated the economy? You’ve basically just forced the hotel owner to give out a free room.

In the future, try less spittle-flecked ranting and more critical thinking. The internet at large will thank you for it, I’m sure.

Anonymous Coward says:

Re: Re: Re:

You’re not making any sense (surprise).

The hotel owners make money from these patrons. They have to have employees to work at the hotels. That creates jobs. Those people are then making money.

The restaurant owners make money from these patrons. They have to have employees to work at the restaurants. That creates jobs. Those people are then making money.

The bar owners make money from these patrons. They have to have employees to work at the bars. That creates jobs. Those people are then making money.

And of course you ignored the other massive benefit I mentioned that the states receive: advertising their state to tourists.

Michigan’s tourism budget is over 27 million dollars a year.

And advertising their state for tourism is important to them because it works:

http://statenews.com/index.php/article/2012/03/michigan_tourism_increases_with_advertising_campaign

silverscarcat says:

Re: Re: Re:3 Re:

“trickle down economics”

You give money to people who own businesses in hopes that they hire more people, which puts more money into the hands of more people and thus it gets circulated out into the economy.

As we’ve seen in the past decade, that doesn’t work too well.

The best thing to do is to give money to poorer people and have them spend it into the economy. Poor and lower middle class people tend to spend more of their money than rich do, percentage wise.

silverscarcat says:

Re: Re: Re:5 Re:

1. Again, how many NEW employees are being hired? You can get by with a skeleton crew pretty easily, just have everyone do a few more things to make it easier on everyone and cover up the fact that if you had 3 more employees, you could cover those things and make it easier on everyone at the same time.

2. I never said anything about advertising.

John Fenderson (profile) says:

Re: Re: Re: Re:

The issue isn’t whether or not there is any additional revenue created by these activities. The issue is whether or not that revenue exceeds the amount of money handed out as incentives to get the production there. If it doesn’t, then it’s just burning taxpayers dollars even if the local hotel is full for the next month — it would have been more cost-effective just to give those tax dollars directly to the hotel.

I don’t know about the movies, but I do know that the last three times major manufacturing has been lured to my city we have taken a bath for it — the money earned did not come anywhere near the money spent.

silverscarcat says:

Re: Re: Re: Re:

The question is…

Even if the tourism budget is over 27 million dollars a year…

How many NEW jobs are being created?

You’d be surprised how skimpy a restaurant or a hotel staff can truly be and still work properly.

I’ve worked in the food service industry for the better part of 10 years, and I’ve seen rush hours covered by just 3 cooks, 4 servers and a manager with no extra help and things still run smoothly.

Suzanne Lainson (profile) says:

Re: Re: Re: Re:

And of course you ignored the other massive benefit I mentioned that the states receive: advertising their state to tourists.

I’ve followed along with the various states providing tax breaks to movies filmed locally.

I think a good case can be made that tax breaks shouldn’t be given to ANY business or industry, so I probably wouldn’t single out the film industry. Consider corporate welfare across the board instead.

The promotional value of having films made in your city/state is one significant reason why governments do this. If they figure they would be paying the same amount of money to a tourism board or in the form of advertising, they may feel the costs are about the same and that they would rather the money go to film crews rather than media publications and ad agencies.

depauldem (profile) says:

Re: Re: Re: Re:

None of the examples you list depend on the film incentive. Hotel jobs, bar jobs, restaurant jobs….all of them are not dependent on film industry patrons. Indeed, they would be better off if the state spent money on tourism spending. As for the tourism benefits you allude to from film & tv, please remember that setting matters….not where it is actually filmed. This is why Scranton benefits from the Office (filmed in Hollywoood); Boston benefits from Cheers (filmed in Hollywood); Miami benefits from CSI Miami (filmed in Long Beach); Dallas benefits from the old Dallas (filmed in LA)….and so on and so on and so on.

For the record, most of the major cash payments from Michigan to film & TV went to projects not set in Michigan at ALL. Red Dawn, OZ, Scream 4, Reel Steal etc. etc. etc.

Anonymous Coward says:

Re: Re:

Of course they ship in crews, they’re making a fucking movie. Do you think they can just go down to the corner grill and ask Clem to be a key grip?

Do you understand that this strengthens the point that these investments are foolish? Where are the newly-created jobs supposed to come from if they have to ship in crews?

A big part of the economic benefit for the states and municipalities comes exactly from these crews and other participants coming to the location; a town’s revenue goes up via restaurant and hotel bookings, and the scenery functions as a world-wide tourism commercial for the state/town.

You appear to have ignored the bit where those expenditures are covered by allowances and therefore already accounted for by the subsidy.

Anonymous Coward says:

Re: Because The Rich own gov'ts; it's their re-distribution scheme.

“So why are states (and countries) so eager to hand over taxpayer subsidies to Hollywood?”

Musing Mike never seems to grasp the obvious.

It’s obvious isn’t it? The conservative Republican legislators and Governors in places like Georgia, North Carolina, South Carolina and Louisiana secretly love Hollywood and all of their motion picture unions. Their affection and admiration induces them to lavish tax money on Hollywood liberals. Being liberal-loving rubes, they forego any studies or economic analysis. Instead they just dish out cash to their Hollywood soulmates.

Independant Monkey says:

Re: Re: Because The Rich own gov'ts; it's their re-distribution scheme.

Yet Hollywood is notorious in its hate of the Repubs, and generally opposed them, that would indicate this political operators that have been smart enough to secure an office, have suddenly decided to pay money directly into the coffers of their opposition…

Sounds like more of the MY party is perfect, the others are EVIL BS… grow up and disabuse yourself of the notion that parts are useful or for the good of any one but themselves.

depauldem (profile) says:

Re: Re: Because The Rich own gov'ts; it's their re-distribution scheme.

South Carolina killed their incentive. North Carolina’s incentive expires next year, and the conservatives who have come back into power their have signaled their desire to end the program. Gov. Perdue, a Dem, backed it. In Georgia, the conservatives running the state have only one report to base their support off of….and it was paid for by the MPAA, who is lying to them. Ignorance is bliss.

Finally, the Louisiana film division has commissioned three reports on the film incentive. ALL of them show massive losses for the state. In addition, one was done by the Leg. fiscal officer and another was done by a third party think tank….those two reports showed the same thing as the other three. ALL FIVE REPORTS show Louisiana is bleeding hundreds of millions of dollars for virtually no ROI to the state coffers. Does this surprise? No….It’s Louisiana. Who read there?

Again, stop drinking the kool aid. Or, wait…..are you a MPAA staffer?

Lord Binky says:

When I first looked at it, I thought ‘If you pay them less than the amount of money they will spend on buying coffee locally, I guess you can make it profitable’. Then I continued to read and saw even the low payout number’s returns were fudged.

How does paying someone $400 to film somewhere not pay off? Really, you just have to say sure I’ll give you $400 but you have to stay in one of our local hotels. TADA! PROFIT!(unless they aren’t staying long or bringing lots of people in which case, WTF are you doing giving them money to come there?)

Michael Long (profile) says:

Re: Re:

You mean that $400 you took away in taxes in the first place and gave to someone at the studio, who spends part it on a hotel room that actually has costs and has to be provisioned? And then pockets the rest.

You do know what the term “profit” means, don’t you?

If your sole incentive is to provide a stimulus, take the $400 and hand it directly to the hotel, cutting out the middleman. Better yet, let the taxpayers keep the $400 in the first place and THEY can spend it at local stores and restaurants.

Anonymous Coward says:

Re: Re: Re:

Uhm … when I click on Show insightful comments, yours doesn’t show up, but it has an insightful mark next to it. Strange.

Anywho, what the govt. doing here is theft. They are taking my money and giving it to someone else for the benefit of someone else, forcing me to spend my money how they think it should be spent (on entertainment) instead of allowing me to decide how I want to spend it. As if the govt knows best, they know how I should spend my money better than I and entertainment is how I should spend it. It’s theft, what they are doing is theft, they are forcing me to buy a product against my will that I may not want to buy. Doing it “to create jobs” not “because it benefits those being taxed” is theft, it’s no different than someone who breaks windows to create jobs for himself.

If they were doing it to build highways that’s OK, they are doing it because highways are in the public interest, they are doing it for me. Doing it to serve a public purpose, for my benefit, is fine. Doing it simply to keep others employed, which is what they admittedly seem to be doing it for here, is nothing short theft and theft is not OK even if it’s the government doing it.

Anonymous Coward says:

Re: Re: Re: Re:

Oh, so if the government funds a charter school that’s theft? And what about your highway example. I live in the city and don’t own a car. That doesn’t benefit me, why don’t I get to decide? And recently there’s been talk about hiring more cops. But I live in a low crime area, I don’t need any more cops, why am I paying for them? And while we’re at it, I don’t use the public library either. Yet those thieves steal my money to benefit those who are too cheap to buy their own books and movies. And what about these social programs. I’ve never needed unemployment insurance, healthcare or subsidized housing. WTF? They’re forcing me to buy a product against my will!!!

iambinarymind (profile) says:

Because it's not their money...

So why are states (and countries) so eager to hand over taxpayer subsidies to Hollywood?

This is due to the money having been stolen from individuals through force/coercion. As the money being doled out by the State gangsters is not their legitimate property, they have no real incentive to be responsible with said money.

If we want things to get better, we must advocate consensual relationships & voluntary markets instead of a State monopoly on “taxation” (theft) & the so called “justice” system.

Try Voluntaryism instead.

silverscarcat says:

Re: Actually....

It is the government’s money.

It’s the job of the government to create all of the currency.

Sadly, governments have allowed that power to be turned over to the banks.

And, as much as we all hate it, taxes are needed, as they allow governments to keep functioning, which is what’s needed for most societies.

silverscarcat says:

Re: Re: Re: Actually....

You have to pay for things somehow.

Fire department, police force, animal control, sewage, garbage, roads, hospitals, military, social services.

Fact is, those all cost money. No single person has enough cash on hand to pay for any of that.

Just to cover the cost of 100 miles of roads, it costs over 50 million dollars, and then the roads have to get repaired in 3 months.

That’s what’s going on around here in my local area.

You think any one individual, or even a group of individuals has enough money to spend 200 million on roads every year?

And those that do, they’re not going to want to spend it on the roads and highways.

Not to mention bridges.

How about New York and New Jersey after Hurricane Sandy hit? You think that you can just get the money you need to fix those cities up from people easily?

Fact is, despite all the donations people have been giving (and it’s a lot) to help those people, the government still gave a lot more to help in the recovery efforts.

And how does the government get that money?

Through taxes.

Niall (profile) says:

Re: Re: Re: Actually....

That’s fine, when are you going to pay for your K12 education, and will you pay a use toll every time you use the roads? Oh, and the internet was created with tax dollars (military and educational establishments) so please feel free to make your contributions for using this as well.

Just pray as well that your house doesn’t catch fire or that no-one breaks in.

Anonymous Coward says:

Re: Because it's not their money...

“”taxation” (theft)”

Taxation is not necessarily theft. When the government taxes the public to fund public programs, things like public roads, etc… that are intended to serve a public purpose, that’s fine. But when they tax someone simply to create government programs simply for the sake of creating jobs, that’s theft. We already have a welfare system, we don’t need another welfare system disguising itself as a “job creation program”.

What they are doing here is theft.

Suzanne Lainson (profile) says:

Cultural programs

I’m not for or against film tax breaks. However, I would like to point out that some communities willingly pay money to support cultural activities. If a state views supporting the film industry as a cultural activity, it may feel the expense is worth it.

Here’s what is done in Denver. It’s not related to the film industry, but you can see how a tax is used here.

:: Welcome to SCFD: Making It Possible ::: Since 1989, Scientific and Cultural Facilities District (SCFD) has distributed funds from a 1/10 of 1% sales and use tax to cultural facilities throughout the seven-county Denver, Colorado metropolitan area. The funds support cultural facilities whose primary purpose is to enlighten and entertain the public through the production, presentation, exhibition, advancement and preservation of art, music, theatre, dance, zoology, botany, natural history and cultural history.

ltlw0lf (profile) says:

Re: Cultural programs

I’m not for or against film tax breaks. However, I would like to point out that some communities willingly pay money to support cultural activities. If a state views supporting the film industry as a cultural activity, it may feel the expense is worth it.

I don’t have children, but I don’t mind paying taxes for education because ultimately it helps us all out in the long run. I don’t use public transportation, but I don’t mind paying taxes for public transportation because it helps get folks that need it to work on time. I don’t have problems paying taxes for culture when culture is owned by the public and everyone may partake in it. Same with fire stations, police, military. Public funds for public service.

The government taking way too much tax and spending it on pet projects that don’t benefit the public at large, but instead benefit small “pet” corporations that return campaign donations and kickbacks to the politicians that championed them…I have a real problem with that. Giving Hollywood more money which they can squander away in Hollywood accounting, paying off bribes to their representatives, and not creating jobs or bettering the public as a whole is exactly what I don’t want my taxes spent on.

If Hollywood can have their tax breaks then I should get one too. I might even kickback some of my funds to the campaigns I want to see funded (as I currently do even though I still pay taxes.)

Suzanne Lainson (profile) says:

Re: Re: Cultural programs

If Hollywood can have their tax breaks then I should get one too. I might even kickback some of my funds to the campaigns I want to see funded (as I currently do even though I still pay taxes.)

I lean the other way. Take away the tax breaks for every business, not just Hollywood. Let’s totally reinvent the tax code (not going to happen, I know).

ltlw0lf (profile) says:

Re: Re: Re: Cultural programs

I lean the other way. Take away the tax breaks for every business, not just Hollywood. Let’s totally reinvent the tax code (not going to happen, I know).

Oh, I do too. I’d love to see us go away from tax breaks period, whether for corporations or individuals. If society as a whole values something, then we all should pay for it. Might get folks thinking about all the waste.

Suzanne Lainson (profile) says:

Re: Re: Re:2 Cultural programs

The MPAA doesn’t need them, but a lot of small businesses need a tax break to keep running.

There are certainly some businesses I would favor over others for tax breaks, but it might be an easier sell to eliminate them for every business than to try to explain why some deserve them and others don’t.

Wally (profile) says:

Re: Re: Re:3 Cultural programs

Nothing comes at ease. The problem is simply that you can’t tell where it’s needed or not. When I mean small business, I mean local mom and pop’s opperations (like the books store down the street from where I grew up) and the small state businesses like Kroger. I see the tax breaks would work best on a location and employment basis for larger businesses like Wal-Mart and Sears.

The taxes that businesses will be paying is doubled that compared private citizens will for Obama care. That being said a tiny tax break will help since they are required to pay a tax for Obamacare just to break even.

Suzanne Lainson (profile) says:

Re: Re: Re:4 Cultural programs

The problem is simply that you can’t tell where it’s needed or not.

And that’s reason not to give any business a tax break. If you can’t tell who will benefit from it, just eliminate all tax breaks. At least it makes it simpler. And there’s less reason for companies to try to influence politicians if they don’t get any benefit from the tax laws.

If you strip out all the benefits and all the loopholes and make the tax system as simple as possible, there’s value in that by eliminating a lot of paperwork.

Anonymous Coward says:

Re: Re: Cultural programs

paying off bribes to their representatives

This is a familiar snivel amongst you Techdirtbags. Can anyone actually point to an instance where someone from the studios and or a politician was convicted of bribery. Same challenge for a judge which is also a frequent claim.

I’ll be waiting here.

ltlw0lf says:

Re: Re: Re: Cultural programs

This is a familiar snivel amongst you Techdirtbags. Can anyone actually point to an instance where someone from the studios and or a politician was convicted of bribery. Same challenge for a judge which is also a frequent claim.

I am sorry to keep you waiting, but none of us ever said bribery. Last time I checked, Campaign Contributions were not bribery. However, even without being bribery, they are troublesome because they turn political power into who can buy the most votes, not what is best needed for the constituents.

Also, just because there isn’t any examples of bribery in this case doesn’t mean that it isn’t happening. Law enforcement doesn’t usually go after these things except in the most grievous of examples, because they are difficult to prove and because it is usually not a good idea to bite the hand that feeds you (congress pays for enforcement.)

However, since you are all into challenges at the moment, I challenge you to find a single post I’ve posted where I accused the studios of bribery. Buying laws, yes, but all you need to do is donate a bunch of money to the campaign to get that.

However, there are plenty of examples of congress taking bribes even though they haven’t been convicted of bribery, and some examples of them being caught, though not for bribes from the entertainment industry. Judges have been caught too, but again, not for the entertainment industry.

depauldem (profile) says:

Re: Re: Re: Cultural programs

Um, Wheeler in Iowa. Patel and others in Louisiana. Two state reps in Michigan over Hanger 42. The producer of the last Richard Dreyfuss movie in Massachusetts. The Jewish Producer from Minn in Iowa. That’s just off the top of my head. Please stop waiting and google film incentive corruption. Lots of reading awaits you.

Suzanne Lainson (profile) says:

I don't see Texas on the above list

I don’t know if Texas is off the list because its tax breaks are working or not.

Don’t Mess With Taxes: Austin: “Part of the reason, in case you’ve missed the politicking by our governor who wants to be president, is that Texas works hard to write laws and regulators to make the state appealing to businesses. And one of the ways it does so in the creative arts field is via the state’s Film Commission tax incentives. Despite the state office’s name, the tax breaks are available not only to traditional television and movie productions, but also video game projects.”

Anonymous Coward says:

Unsurprisingly, you don’t know what you’re talking about Masnick.

http://www.georgiatrend.com/November-2011/Ka-Ching-Crunching-The-Movie-Numbers/

Legislators have been shown film is good for jobs: In 2007 there were 11,800 full-time equivalent jobs, according to the GDEcD?s Thomas, and there are now 25,000 in Georgia, more than double the number in four years. ?There are small armies that come in,? Bagwell says. ?For Necessary Roughness, they had a crew of about 230 people. On our lot, we have BET in one building and USA in other, and about 75 percent of their crew is hired local. Georgia is known for having strong crew. But we need more. If companies can?t find enough, they will bring in more L.A. people, so it?s better for us to train more local people, which is why colleges are ramping up their film programs.?

And this:

Dominey estimates the number of film-induced tourism dollars since 2005 at $430 million.

Mike Masnick: Seldom right, never in doubt.

silverscarcat says:

Re: Re: Re: Re:

“And you’re a smarmy lickspittle to cover for such outrageous bullshit.”

And you, sir, are wasting the available oxygen for the rest of us.

Here’s a little hint for you…

I’m not a toady.

Calling me that in the form of lickspittle does little to endear you to anyone.

At least I’m brave enough to sign my posts.

You, on the other hand, are nothing more than a worthless P.O.S. who would have been better off as spunk on your father’s bedsheets.

Anonymous Coward says:

Re: Re: Re:2 Re:

silverscarcat? That’s bravely owning your post? OK, you can call me “Sir”. Are you happy now?

What a douchebag. You don’t like “toady” either? I’m fine with that. I thought “lickspittle” was fitting. How about “suckup” or “pissboy”? Those seem well suited.

silverscarcat says:

Re: Re: Re:3 Re:

Feh, since when do I suck up to anyone?

Point to any of my posts where I was sucking up to Mike or anyone here on techdirt.

Go ahead, I’ll wait.

And I know you’re thinking “ha ha, he’s responding, I’m winning”, all it’s doing is proving to everyone what an insecure little person you really are.

Did you forget to give your mommy and daddy a hug today?

Is that’s what’s wrong with you?

Do you need a hug?

Anonymous Coward says:

Re: Re:

I was wondering where your Georgia was on that list. If I read it correctly, Atlanta has become a film-city which is good for Georgia. As for the rest you have to ask yourself:

Are the states competing on giving the best incentives to filmmakers? In that case the numbers in the article makes perfect sense (they take a loss to get the activity in the local economy it brings, even though it is equivalent to peeing their pants to keep warm. As fogbugzd wisely notes, film making is noncompetitive for the local economy and you are therefore sure to have a positive effect off of it locally even though the effect is less than a third of what you used to get it).
How many big film-cities can there be in USA before the market gets satuated? It has been shown again and again that as soon as some companies are found in an area other companies of the same kind will find the area more attractive. Temporary filming as an incentives only model will bring is lightyears away from permanent well equipped areas where you only need to bring a manuscript and a dream to make a film.

Jay (profile) says:

Re: Re: Re:

Georgia is rotten in a number of areas. The inner city could use that money for education since it’s pretty high on the unemployment scale and needs more public housing along with less right-to-work laws.

If you reapply think Atlanta is doing well, please find evidence. I’ll be sure to fact check that considerably given my experience in that state.

depauldem (profile) says:

Re: Re: Re:2 Re:

My God. You speak of personal bias and then link to an article (not the actual study, btw) of a report paid for by the MPAA in support of film incentives? That report has as much credibility as a report paid for by Justin Bieber saying that he has more artistic merit than any singer on earth, ever. Sure….let’s trust that. And how is the kool aid in Jonestown?

Had you actually read that study, you might have noticed that E&Y actually conceded that the cost to the governments actually exceeds the roi state coffers. Try reading it next time….be careful not to spit your kool aid out.

Anonymous Coward says:

Re: Re: Re:2 Re:

Liberal Hollywood producers and their union cronies are still getting massive tax subsidies from conservative, anti-union Republicans in right-to-work states. Why is that those who hate liberal Hollywood the most seem to believe that these incentives pay off and you and Masnick don’t? Couldn’t be your bias blinding you could it?

Gwiz (profile) says:

Re: Re: Re:3 Re:

Couldn’t be your bias blinding you could it?

Nope. I prefer to base such things on actual verifiable facts. I belong to no political party and I vote my conscience. We are talking about my tax dollars here. This smells like pork belly spending to me at time where I live state police, local police, fire and road commission budgets are being slashed to pieces.

I looked through your linked “study” and I have to ask, why are the actual facts and numbers so spread out, disorganized and hard to reconcile? I work as a graphic artist and I recognize a sales brochure when I see one.

Anonymous Coward says:

Re: Re:

Once again, this is why I like Ohio ๐Ÿ™‚ When studios want to shoot here, no tax payer money is used at all. They aren’t taxed an they have to pay for street shutdowns.

Also, isn’t it illegal for a private entity to make a state pay a subsidy for shooting on your territory?? If not it needs to be a law.

Jeepers Wally, no wonder the Beaver thinks you’re an idiot:

http://www.ohiofilmoffice.com/Incentives.html

Wally (profile) says:

Re: Re: Re:

Man you’re out in force. Ohio gives inscsentives in the form of a LACK OF SHOOTING TAX….. Being a resident of the Cleveland Metropolitan Are…yeah, I you bet I would know where my tax dollars go. But ok, be a troll first to “correct” me see how stupid you seem.

You know those charts you’ve shown us??? They aren’t from an independent entity from either side and in fact are the VERY charts that the MPAA use to snooker states into using subsidized loans from the MPAA to shoot. Ohio doesn’t tax them but it is required in my state, and especially in the greater Cleveland Area to get a shooting permit and a permit to shut down streets when needed.

Anonymous Coward says:

Re: Re: Re: Re:

Christ, are you ever slow. What do you think this means:

Ohio Motion Picture Tax Incentive ? Offering up to 35 percent refundable tax credit

From diverse landscapes to a solid crew base and low cost of living, Ohio offers a vast range of incentives for your next production. The Ohio Motion Picture Tax Credit provides a refundable tax credit that equals 25 percent off in-state spend and non-resident wages and 35 percent in Ohio resident wages on eligible productions.

Hint: It means if you spend $1 million, you get back $250,000 to $350,000. THERE’S NO SUCH THING AS A “SHOOTING TAX”, stupid.

cosmicrat (profile) says:

A little misleading

“… as the NY Times investigation pointed out, those “jobs” really don’t seem to be appearing. Instead, film crews ship in a crew from LA or NY and hire just a couple of locals for low-level jobs… which last a few months and that’s it. The impact on the local economy appears to be minimal.”

This could be more than just a little misleading. It’s anecdotal, but in my state the last few movies and TV shows have employed on average better than 80% local crew. A recent project is estimated to have spent $50 million. More than half that went to local businesses or local residents as wages. They took, I think about $3.5 mil in incentives, but a lot of this was in tax breaks -taxes they would not have paid if they had not brought the production here! So let’s estimate: 30 million dropped locally minus 3.5 million in taxes that wouldn’t have been collected anyway, oh, looks like my state benefited after all.

You keep bringing up Michigan and Iowa. Everyone in the industry knows MI and IA were fiascoes. Corporate welfare whether in the the form of tax abatements, stimulus or any other form is controversial, and I tend to be against it in general, but if you are going to do a film incentive program there are right ways and wrong ways to do it. There are success stories to balance out the horror stories.

And Mike, this is not any kind of an ad-hom, but just to examine your motivations, aren’t you a tech writer? Isn’t this a little off your beaten path? I realize you dislike “Hollywood” because it gives us the MPAA and crap like SOPA and so forth, but it really seems like you are trying to discredit an entire industry out of spite when the topic at hand doesn’t have anything to do with tech, piracy, copyright maximalism or anything else you normally write about. And if you are going to crossover into covering the production industry, hey that’s good. I value your perspective, but I would heartily advise you to learn more about the industry you’re so gleefully bashing. You have an impressive ability to pull together and analyze data, but you certainly don’t seem to have spent much time on set.

Now a few questions:

– Have you looked at the incentive programs in the Canadian provinces? These are the ones that really kicked it off in the ’90s.

– Are there any incentive programs in the tech world?

– How do film incentive programs stack up against corporate and economic growth incentives in general? Are there any industries in which you would support incentives and why?

Keep trying Mike. I value your contributions to the dialogue but I just wish you could have the experience of working in the business for a while before you start pontificating about it.

Anonymous Coward says:

Re: Re:

Hold up. If the anti-Techdirters are now arguing that there are a ton of jobs in the film industry and things are generally rosy…

How the hell has piracy killed the industry?

JESUS CHRIST, talk about a straw man. Who the hell said that? The entire discussion has been about the effectiveness of state tax incentives and percentage of local hires versus crews brought in from LA and NY. I realize Masnick has shit on his face after his nonsensical assertions but you only make him (and you) look worse with this most recent fabrication.

Anonymous Coward says:

Re: Re: Re:

Strawman? It’s a fact that piracy is brought up regardless of whether the article has any relevance to the topic of piracy. It’s also a fact that the MPAA has been choosing between “there are lots of jobs!” and “piracy has killed all jobs!” when it fits them.

It’s a comment on general MPAA strategies. I’m not seeing what’s it got to do with Masnick.

Suzanne Lainson (profile) says:

Still not sure why you are singling out Hollywood?

There are so many tax breaks given out to so many different companies/institutions that I’m not sure why Hollywood deserves its own post here. Look at the broader questions, not just one industry.

Here’s just one example if you really want to open up the discussion the bigger issue of tax breaks.

Should Churches Get Tax Breaks? – Room for Debate – NYTimes.com

Suzanne Lainson (profile) says:

Re: Still not sure why you are singling out Hollywood?

My sense is that while the “Hollywood is evil” posts find an audience here, it’s not a huge issue among voters in general. In fact, as they continue to consume what Hollywood puts out, they seem to like Hollywood.

Rather than focusing on lobbying done by Hollywood, why not find a way to stop lobbying by every industry, or lead a crusade to reform campaign financing? A large group of people actually care about those issues and interest is shared across a broad political spectrum of voters.

In fact, if you want to weaken “big media,” pull the money out of campaign financing so there is no money going for political ads.

Suzanne Lainson (profile) says:

Re: Re: Still not sure why you are singling out Hollywood?

Here’s a follow-up to the Atlantic article. I pulled an excerpt but there is a lot more in the article.

Middle Class Political Economist: NYT Series Illuminates — And Confuses — The State of the Subsidy Wars: “Finally, as Phil Mattera at Good Jobs First points out, the deals database misses a number of large awards, leaving out Tennessee’s $450 million (present value) subsidy to Volkswagen and an even bigger package for ThyssenKrupp in Alabama. It also underestimates other awards, including Apple in North Carolina and Boeing in South Carolina. I also found that it underestimated subsidies to Dell and Google in North Carolina by omitting the local subsidy portion of the awards, a problem Ms. Story is aware of, as I noted in my last post.”

btrussell (profile) says:

Still not sure why you are singling out Hollywood?

Short term, Hollywood is being very abusive with their funds and power. They are using our money to erode our rights. They cost us money and cultural freedom. It needs to stop now!

Long Term, I agree with you, but it is too late to do away with one sweep, we need to start somewhere.

I don’t think we are ready to impose our laws on GOD yet.

Suzanne Lainson (profile) says:

Still not sure why you are singling out Hollywood?

Short term, Hollywood is being very abusive with their funds and power. They are using our money to erode our rights. They cost us money and cultural freedom. It needs to stop now!

Hollywood doesn’t bother me. It’s the fossil fuel industry I am more concerned. Something that affects my health is biggest biggest concern. For example, fracking is happening next to elementary schools now in Colorado. Cities are passing laws to prevent fracking within city limits and they are being threatened with lawsuits for doing so.

Citizens are finding that they don’t have much power against the oil and gas lobby.

Suzanne Lainson (profile) says:

Re: Still not sure why you are singling out Hollywood?

Some environmental issues are triggering some interesting political alliances. The push for the pipeline, taking land from landowners in Texas and Nebraska, is gaining protests from traditionally conservative voters and politicians.

Keystone Pipeline Sparks Property Rights Backlash ? Oil and Natural Gas | The Texas Tribune: “Former Perry gubernatorial rival Debra Medina, a Republican from the Ron Paul wing of the GOP, is another critic. She said the pipeline flight shows how ‘crony capitalism’ has stacked the deck in favor of big business interests while running roughshod over small business owners and average Texans.”

Similarly here in Colorado, fracking is moving into heavily populated suburbs and there are a lot of protests from homeowners who don’t want drilling within feet of their homes, schools, and parks. Even if safety issued are settled (and they won’t be without adequate testing), there are still the issues of noise, traffic, dust, and water disposal that come with the drilling. That lowers the quality of life and property values for those living next to the drilling sites. Liability lawyers are just waiting for the accidents to happen to sue the hell out of any companies involved. However, the way these things tend to go is that any company that is involved in an accident will go out of business if sued, so the damaged property owner or victim won’t get any money.

Paul Q. Merritt says:

NM and NY

Hello Mr. Masnick,
My name is Paul Merritt and I find your article to be very interesting in that I am a Grip from New Mexico and I am currently working in New York. That said, your article should make perfect sense in explaining my reason for being. Here’s the rub with reality that you might be avoiding, though (I am sure this is accidental, btw). You see, people travel for work every day. Some may only travel a mile while others travel thousands of miles. Anyway you slice it the taxes and other sundry bills still get paid. As for the studies you mentioned, suffice it to say, you obviously not done your research in anyway shape or form. In the future please hold yourself to a higher par in practicing your journalistic integrity.

Monday (profile) says:

Jobs don't actually appear...

When I was a resident of the Eastern seaboard, a film was partially made where I was living at the time, and they did exactly what you stated in the start of your article.

The shipped in everything except extras. They even had the sets flown in – lumber, paint, the bloody nails for their nail guns.
As I said, the only employment was four working days for extras, a free meal – we even had to pay for coffee. Nevertheless, I said to myself “Fok that!” and was drinking the same coffee Ethan Hawke and Eddie Marsan (both pretty cool guys) were drinking for the time I was on set. Nobody provided massive work opportunities, and no long-term employment ever materialized.

That was it. The movie never came to fruition here, debuted in Europe and that was it. I eventually found a copy of the dismal failure.

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