USC Takes on Tinseltown’s Subsidies

NMFO Black Square(1)

Here’s something you won’t be hearing from the New Mexico Film Office: Research has, once again, confirmed that giveaways to Hollywood are a sucker’s bet for taxpayers.

Michael Thom, an assistant professor at USC, has published new findings on the “incentives” that states provide to film and television productions. He “looked at job growth, wage growth, states’ share of the motion picture industry and the industry’s output in each state,” and found that on average, “the only benefits were short-term wage gains, mostly to people who already work in the industry. Job growth was almost nonexistent. Market share and industry output didn’t budge.”

Thom’s first study, published in the American Review of Public Administration, concluded that between “1999 to 2013, the average annual percentage change in film production employment remained at or slightly above zero — even in California and New York, the headquarters of the entertainment industry.”

The professor’s second analysis, published in the journal American Politics Research, looked at “why states kept or terminated their incentives.” Dead-enders, he found, refuse to acknowledge reality: “After a state has invested tens of millions of dollars, no politician wants to acknowledge that the program is a waste of taxpayer money.”

Amazingly, despite its small size, New Mexico was one of the biggest-spending subsidizers of Hollywood. At $490.3 million, the Land of Enchantment bestowed more largesse on the industry than Texas, Florida, North Carolina, and Illinois!

Thom’s research is a welcome addition to the mountain of evidence demonstrating the failure of taxpayer “incentivizing” of the entertainment business. Let’s hope it gets some serious attention — from elected officials from both parties — in Santa Fe.

Print Friendly, PDF & Email

3 Replies to “USC Takes on Tinseltown’s Subsidies”

  1. As I understand it, the film industry makes no permanent investment in facilities: The studio buildings, sound stages, etc. are owned by other investors (probably including the taxpayers). Yet filmmakers can damage a state through the kind of economic bullying we saw in North Carolina when the entertainment industry objected to a transgender bathroom law. So not only are film subsidies a poor investment, but they expose us to potential financial risk.

  2. re: film subsidies. You don’t know the half of this. Jon Hendry, the Local 480 business agent is a powerful and unrelenting mover and shaker who will destroy anyone who opposes him. He has made himself wealthy and controls with an iron hand who works and who doesn’t. The state subsidizes him and his accomplices at the expense of many others in New Mexico. The Hollywood chaps think NM is a sucker and you should ask this simple question: If the glamour profession is such a hot financial opportunity why hasn’t California done more to keep them there? You should also ask around to other states that initially subsidized the film business and have abandoned it as a poor investment because the big money makers are not locals and the profits earned by the finished product go elsewhere.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.