How can this be? If the government gives money to incentivize economic development, how can that not promote economic development? An economist explains.
"Hollywood East" (NC) has been battling "Hollywood of the South" (Georgia) in film incentives since before 2009. And Georgia's been winning, according to film incentives' advocates in both states. But are they really?
The audit's accounting for the lost government use of the tax credits doesn't ask what economic activities would have occurred if the money was directed by individual taxpayers to whom it originally belonged. It assumes that their money is directed by government at no cost to the state economy.
The audit provides a much lower economic impact of Georgia's film tax credit than the Georgia Film, Music and Digital Entertainment Office does. But because of certain assumptions used in its model, the audit still manages to overestimate Georgia's film incentives' impact.
In 2016 Georgia granted $667 million in tax credits for film productions. In return, Georgia realized only $65 million in net new revenue, meaning the state self-inflicted a net revenue loss of $602 million.
Performance audits of the administration and economic impact of Georgia's Film Tax Credit ought to put the kibosh on any Tar Heel envy of it. To call it disastrous is insufficient.
This week, JLF’s Jon Sander’s published a research brief on film incentives prompted by a statement Gov. Roy Cooper released this week: [H]is press release announc[ed] the creation of a “Governor’s Advisory Council on Film, Television and Digital Streaming.” This group will “advise Gov. Cooper on efforts to grow and develop…
Film incentives have support in North Carolina on both sides of the political aisle. Jon Sanders, John Locke Foundation director of regulatory studies, says that’s flawed thinking. In this interview, he discusses states’ use of targeted incentives to lure film productions. WATCH.
