Dan Way reports for Carolina Journal:
Lawmakers in 2015 OK’d $10 million a year for the grant program, but the current budget tripled the amount to $31 million. In 2017 legislators removed a July 2020 sunset date, making the grant program permanent.
The present program lets production companies collect grants up to $12 million for a TV series season, $7 million for feature-length films including made-for-TV movies, and $250,000 for commercials.
Gov. Roy Cooper’s recommended state budget continues funding the film grant program at its current level for fiscal years 2019-20 and 2020-21, state Budget Director Charlie Perusse told Carolina Journal. Cooper’s 2017 budget recommendation called for reverting to the tax credit system. The governor didn’t do that this budget cycle.
Jon Sanders, director of regulatory studies at the John Locke Foundation, says reviving film tax credits is a bad idea. States are reversing course on film handouts because they aren’t the economic catalyst advocates claim. North Carolina’s nonpartisan legislative fiscal staff shredded claims about film subsidies industry insiders made in 2014 before the tax credit was killed.
Among other findings, Fiscal Research said the state lost $45.3 million on the tax credits, receiving just 54 cents back for every dollar invested. And those losses didn’t account for opportunity costs — the ways money spent on the film credit could have been used for other purposes in the general economy or to reduce public sector spending.
Fiscal Research staff said a glowing report by the film industry citing economic benefits of subsidizing filmmaking was replete with errors and mistaken assumptions. The staff attributed the mistakes to a series of misunderstandings about state tax laws.
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