Film Tax Credits Roll Out Jobs, Not State Revenue
Governor Jindal’s tax overhauls, presented to the legislature Thursday morning, include nixing almost 200 exemptions, and tweaking a few others – like the Motion Picture Industry Development Tax Credit.
Some members of the industry are worried the incentives will be at risk during upcoming debate in the legislature.
Tom Anton is a director who's made two films in Louisiana. (Including one that's slated to come out next week.) He shot his first movie here because of the tax incentives – even though half of his movie took place in Michigan.
"Once I started looking at it," Anton said, "there was not way we could have afforded to shoot it in two states."
Louisiana gives back 30 percent of the film’s expenses on in-state goods and services in tax credits if filmmakers spend over $300,000.
And if the filmmakers aren’t paying taxes in Louisiana? They can sell the credits back to the state or to people who are paying taxes here.
But that opens up the door for fraud. Filmmakers could inflate their budgets, get extra credits, and sell them off.
Despite that the program creates thousands of direct jobs every year, the state gets in back only a dollar in taxes for every seven it spends in credits. Jan Moller, director of a public policy think tank, says Louisiana can’t afford to subsidize the film industry.
“That’s a policy decision we’ve got to make," Moller said. "This is an area of the budget that’s been growing by leaps and bounds every year, even as we cut healthcare, education, and some of the critical services the state is expected to fund.”
The governor is proposing to start a credit registry to mitigate fraud. And cut more costs, he wants filmmakers to stop getting credits for financing fees, and to cap the credits for actor’s salaries at a million dollars.