Special favoritism for film productions is still a bad idea

Economics hasn’t suddenly changed. So there’s no need to expand dramatically the state’s film grant program, especially not to five and a half times the level it was in 2015.

But House Bill 473 and  Senate Bill 358 would both pump up the state’s “Film and Entertainment Grant Fund” to $55 million.

States reviews of their own film incentive programs1 have consistently found they are net money losers. NC’s previous program was returning only 19 cents per dollar:

film studies

There are reasons for that, and they have to do with the economics of people choosing what’s the best use of their own money vs. politicians making political decisions with other people’s money.

You may not grasp the ins and outs of public-choice economics. But even so you can tell that those dollars are no longer going to their best use. There are consequences for that.

You can explore those consequences in a 2016 study in the academic journal The American Review of Public Administration. Prof. Michael Thom of the University of Southern California found that state film incentive programs have no impact on their states’ economies or industries. They basically just benefit film companies and current workers.

NOTE

  1. Studies referenced in the chart above were prepared for, sequentially: Connecticut Dept. of Community and Economic Development, New Mexico Legislative Finance Committee, Arizona Dept. of Commerce, Pennsylvania Legislature, Wisconsin Dept. of Commerce, Michigan Legislature, Missouri Tax Credit Review Commission, New Jersey Economic Development Authority, Greater Cleveland Film Commission, Louisiana Budget Commission, Massachusetts Dept. of Revenue, and North Carolina Dept. of Commerce.

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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