La. senators question value of film tax credits during the budget crisis


By Kevin Frey

BATON ROUGE, LA (WAFB) –

The state’s budget crisis has some Louisiana lawmakers questioning whether film tax credits are a worthwhile investment.

Leaders from the Louisiana Economic Development organization told the Senate Revenue and Fiscal Affairs Committee Monday that the state gets back about 23 cents for every dollar invested in the tax incentive program. Meanwhile, at the parish and city level, they said that the rate of return can be up to $4.50 on the dollar.

“We’re broke. We don’t have the money to fund this,” said Sen. Jay Luneau, D-Alexandria.

“We’re seeing now trouble educating our children, coming up with the money. Healthcare, we’re lacking on that and we’re in a pretty critical situation,” said Sen. Neil Riser, R-Columbia.

Under the current program, movie producers can apply to get 30 percent of their in-state spending back in the form of tax credits. The aim is to help stimulate the movie business in Louisiana, which has been nicknamed “Hollywood South.”

Members of the film industry, meanwhile, indicated that the studies under-sell the impact of the tax breaks. For every film job created, two other positions are indirectly created as well, according to Robert Vosbein, the president of the Louisiana Film and Entertainment Association.

“Small businesses in the small towns, the lumber yards, it’s fabulous to have a movie come to town,” said Susan Davis, who owns a farm in St. Francisville that she rents out to movie production teams for backdrops.

“It takes us from surviving to being profitable. It’s 25 percent of our business. It’s a big deal,” said Gabriel Markel, who manages Markel Lumber Yard in New Orleans, which sells wood for movie sets.

However, ever since the state instituted a $180 million cap on the number of yearly film credit claims starting with the 2015-2016 fiscal year, film industry representatives said the number of films produced in Louisiana has dropped. As a result, owners of small businesses that benefit from the film industry said that they have seen a drop in business.

They said that paying for the credits is a worthwhile investment, especially when considering the alternative.

“What is the fiscal cost of that when they lose their jobs, when they maybe go on unemployment. There’s so many costs,” Davis said.

Lawmakers cannot modify tax credits during this year’s regular legislative session, though they could during a special session if the governor calls for one.

http://www.ksla.com/story/31988173/la-senators-question-value-of-film-tax-credits-during-the-budget-crisis

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