Film subsidies should not pay off

Wyoming lawmakers will consider a proposal to provide subsidies to the film industry in the next legislative session. This would reinstate a program that the Wyoming legislature passed in 2007 and ended in 2018 after allocating $ 1 million for projects statewide.

WyoFile reported that the Joint Committee on Travel, Recreation, Wildlife and Cultural Resources voted to advance a proposal that would allow filmmakers to request up to $ 3 million in rebates for production expenses through from the Wyoming Department of Tourism.

The intent of these grants is to create jobs and promote Wyoming tourism by featuring the state in movies. Many states offer grants to the film industry and compete with each other to offer the most generous packages possible in order to attract production teams.

During the committee hearing, industry representatives bragged about the thousands of dollars contributed to a community through these projects and the jobs that would be created. They also warned that failure to provide good grants could result in the loss of films featuring Cowboy State. Two examples they offered were the 2005 film “Brokeback Mountain” and the ongoing ABC television series “Big Sky,” based on the work of Wyoming writer CJ Box; the two productions were attracted to other regions for financial reasons.

The industry may promise big returns and great promotional benefits to bring our state to the big screen, but more and more states are becoming skeptical of the return on investment they are getting for their film subsidy programs.

In 2010, the Left Center on Budget and Policy Priorities conducted a study that found little benefit for the programs. Companies that produce movies and shows have often established relationships within a state and will choose a location based on those relationships, regardless of grants, the study found.

The jobs that these programs promise to create go mostly to non-residents. The skill sets applicable to production are often found in the labor pools of states like New York and California, which have strong film and television production industries.

“Jobs for state residents tend to be unequal, part-time, and relatively low-paying – hairdressing, security, carpentry, sanitation, moving, storage and catering – which are unlikely to lay the foundation for a job. solid economic development in the long run, ”the study explains.

The conservative Tax Foundation conducted a study in 2012 and found that, “Aside from studies funded by economic development authorities and the Motion Picture Association of America, an industry trade association, almost every other study has revealed that film tax credits generate less than 30 cents. for every dollar spent.

A 2016 study by Michael Thom of the Price School of Public Policy at the University of Southern California found only minimal economic benefit for refundable tax credits in terms of employment, and only an impact temporary for wages.

When Virginia evaluated its film incentive program in 2017, she found that the state film tax credit and grant “had had mixed success in achieving their goals. While the incentives influenced most of the productions that received incentives to film in the state, the growth of the film industry in Virginia has been very weak overall, even after an increase in spending thanks to its incentives. .

Another analysis of New Mexico’s very generous cinema incentive programs found that between 2014 and 2016, for every tax dollar invested in its cinema grant program, state and local governments received about 43 cents of tax revenues ; a study by New Mexico State University found that the state program only earned 15 cents for every dollar in grants. The New Mexico program has also been found to support very few jobs for the cost.

Many other analyzes have been done for other state programs and find similar results.

The problem with trying to generate economic spinoffs for film and television productions is that you are dealing with a very mobile industry. It is the nature of their “on-site” business to pick up and move easily and quickly. Even if they are attracted to one state’s grant program, it is extremely easy for another state to attract them with better programs. States are therefore obliged to give more and more in order for the industry to be happy. It is a race to the bottom at the expense of taxpayers, for ephemeral jobs.

With mining revenues declining and the state budget strained, the Wyoming legislature is going to receive many proposals on how to diversify the economy. We hope our representatives will take a close look at them.

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