Lower taxes that encourage business investment are economical, not, as The Advocate’s recent editorial called Louisiana’s Motion Picture Production Tax Credit “wasteful.”My firm, Arduin, Laffer & Moore Econometrics, on behalf of the Louisiana film industry, reviewed the tax credit’s impact in the state, and it is clearly beneficial.
Louisiana is now undeniably an international destination for producers, and the private sector has responded by investing substantially in infrastructure and world-class production facilities. As a result, in just 14 years, the Louisiana production industry has grown from an average of 22 projects per year to 145 annually.
Moreover, production-related employment grew by 252 percent during that same period, compared with just 6 percent employment growth across all occupations in Louisiana. The production industry supports 11,017 direct jobs in the state and $508 million in wages in Louisiana. And these aren’t just “jobs;” many are well-paying careers for Louisianans in an exciting field. In 2015, the average wage associated with production-related occupations was $55,600, which was 38% higher than the average private sector wage in Louisiana.
Total employment and wages generated by productions are actually significantly higher when workers in occupations that support productions, such as carpenters, caterers, stylists, publicists, writers, etc., are included.
In 2015, television and motion picture productions spent $1.1 billion at firms in the state. But even then, it’s difficult to measure precisely how much economic activity the industry generates because it has such a far reach. If a caterer makes an extra dollar thanks to a film, for instance, it’s more likely than not that they will spend that dollar locally, and that in turn, will support another job, which will keep the cycle going.
It’s also hard to overstate what the television and motion picture industry does for tourism. A study by HR&A estimates that the economic output associated with film tourism amounts to another $2.401 billion. Productions are important for Louisiana’s cultural identity and add to its quality of life.
Finally, it is important to note that the production tax incentive program was never intended to be a quick cash grab for the state; it has always been a long-term research and development (R&D) program, so The Advocate’s assessment is far too short-sighted.
The lawmakers who originally crafted the legislation launching the tax incentive program knew it wouldn’t be a windfall for the government’s coffers; instead, they were hoping to create an industry that will benefit the people of Louisiana, and it has done that.
Louisiana’s television and motion picture industry is only beginning to mature right now, and it has much, much more potential to deliver as long as the industry can count on the continuation of a stable and predictable Motion Picture Production Tax Incentive Program.
president, Arduin, Laffer & Moore Econometrics
Fort Lauderdale, Florida