Louisiana film tax credits: We know how this movie ends


Louisiana Gov. John Bel Edwards returned from a trip to Hollywood last week to announce peace for our time with the movie moguls.

That kerfuffle over whether the state was really capping its generous tax credits and maybe trying to be a little more responsible about giving away taxpayer money has all been smoothed over. Louisiana assured the entertainment impresarios that we had our minds and priorities right again. The industry had been appeased.

“The message that I received loud and clear out there is that they really like Louisiana,” Edwards said Wednesday (Oct. 3), “they like doing business here and they have renewed confidence in the stability of the motion picture tax credit.”

Five days later, Netflix invaded New Mexico, acquiring a production studio complex as part of a plan to bring $1 billion in production to that state over the next 10 years while creating what the digital streaming entertainment company said could be as many as 1,000 production jobs a year.

Sure, you have to look at the “could be” and “as many as” with some skepticism, but it sure seems like a more serious commitment than the piecemeal production, catering jobs and on-set extra work that get sporadically generated in Louisiana. It will be Netflix’s first acquisition of a production studio complex, which The Los Angeles Times described as a significant step for the company that has usually leased production facilities.

New Mexico taxpayers still have to put some skin in the game.

Netflix said it will receive local funding for the project, including as much as $10 million from New Mexico and up to $4.5 million from Albuquerque.

The question is not whether we are losing this war, but whether we should be in it at all.

You may recall that an economic-impact study conducted last year for the Louisiana Department of Economic Development found that the state had given film producers $282.6 million in tax credits in 2016 while economic activity from the movies made in-state generated only $63.2 million in state taxes. That’s 22 cents in taxes for every state dollar invested in the program.

The study concluded that the film industry had created 14,194 direct and indirect jobs in 2016, a decent number and relatively high-paying, but still subsidized to some degree by the tax credit.

Revenue Secretary Kimberly Robinson, who accompanied Edwards on his California trip, told reporters that the state expects to release a new economic-impact analysis of the film program next spring that will be more positive in light of changes made to the program in 2017.

Robinson said she expects it will show that each $1 in incentives generates $5 in “economic activity” in the state. A positive review of film tax credits would be an outlier, by the way, as almost every independent study shows it to be a loser for taxpayers.

The film tax credit is not the only questionable incentive package that the state offers, and it may not even be the worst. But a big problem is that politicians, taxpayers, and even journalists can get a little starry-eyed over a program that brings famous actors and productions to town in what has become the legend of Hollywood South.

The whole thing, of course, is a race to see who gives away the most to the entertainment industry. As the numbers go down in real Hollywood, various contenders — Louisiana, Georgia, North Carolina and now New Mexico — try to become the next Lala Land until the moguls get tired of the scenery or get a better deal.

New Mexico is the current main-squeeze and may have even talked Netflix into settling down. At least for now.  

Edwards, meanwhile, spent two days in California meeting with executives from Netflix, Warner Brothers, NBC Universal, Walt Disney Studios, HBO, Hulu, CBS and Sony, and came back to Louisiana with empty hands and a dreamy look on his face.

“Quite frankly, they are very pleased about Louisiana,” Edwards said. “They all told me they appreciated the fact that I, as governor, went out and visited with them personally — it makes a difference.”

And if we can keep the taxpayers’ dollars flowing, they may even ask us to the movies.  


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