Over the weekend, New Mexico’s likely GOP nominee for governor touted the state’s role as a “major destination for our country’s film and TV industry.” It was painful to read U.S. Rep. Steve Pearce‘s tweet, since Errors of Enchantment has consistently debunked the specious claims of the subsidize-Hollywood lobby. (Most recently we looked at the dearth of pilots being shot here.)
But to aid Pearce’s understanding of film-and-television corporatism — as well as to inform all candidates running for state-level offices — Errors of Enchantment has compiled a handy chart of the Rio Grande Foundation’s database of independent analyses of state “incentive” programs.
The numbers are stark. After more than a decade of research, not one study has shown that return on taxpayer “investment,” per dollar, exceeds 49¢. Liberal states, conservative states. Legislative researchers, executive-branch auditors. The results are the same.
Never mind its boosting of an industry infested with far-left activists, and its funding of a militant union that forcibly extracts tribute from workers. Handouts to Hollywood are a net money-loser for taxpayers. And that’s why New Mexico should join the growing list of states that have repealed their costly and unproductive giveaway programs.
Well, there are some studies (usually sponsored by the film industry or unions) that include nebulous, indirect ‘marketing’ effects, e.g. being a film location boosts a state’s reputation/brand. These will sometimes claim break-even or higher returns on investment. Since such marketing effects are almost impossible to measure, one can put any sort of number on them.
Just think how much Breaking Bad did to enhance Albuquerque’s reputation as a place to live and do business…
If you read the post again, you’ll see that our database is of “independent analyses,” not papers/studies produced by the industry or state film offices. They’re not worth the paper they’re printed on.
In addition to the direct subsidies, states that are all-in on corporate welfare for Hollywood also spend taxpayer dollars in many other ways. I was recently at an event in Santa Fe that focused on the many film/TV courses offered by the state’s system of higher ed. Future analyses should include these ancillary freebies.
No doubt about the value of industry or state film office economic impact studies. Beyond the bogus return on investment numbers that one reads in commentaries on film incentives is the often stated misrepresentation that the film production tax credit is just a reduction in the taxes that the film industry pays (rather than a direct payment type of subsidy, which it is in fact).
Progressives constantly rail against “big corporations” not “paying their fair share” but seem to have a blind spot when it comes to the TV and film industries, which are probably the world champions of tax dodging and subsidy farming. See for example: https://www.hollywoodreporter.com/news/tax-loopholes-5-ways-hollywood-500180