The thousands of jobs that Louisiana’s film credit supports are valuable, but are they providing enough return on the state’s investment? The reality is no, and a study for the state by LSU economist Loren Scott painted a dismal picture of Louisiana’s generous program of film tax credits, finding that the state gets less than a quarter for every dollar it spends.
Now the film industry, national and local, is challenging Scott’s study, arguing that the indirect economic impact of the credits isn’t getting the, well, credit that it deserves.
Hollywood’s rosier scenario is that the program has those indirect benefits, including responsibility for tourism.
Yes, tourism. That is connected to movies because an online survey of 1,381 recent visitors to Louisiana showed that 14.5 percent of tourists were “induced” to come to New Orleans or Louisiana because of movies and TV shows filmed here.
Spin off more than 20,000 jobs from that number, and by a miracle of stagecraft, the film tax credit breaks even.
That sounds, as economic analysis, laughable on its face.
Louisiana’s generous subsidy program was designed to build a new industry for our state, and it has: We have surpassed Hollywood as the nation’s moviemaking capital.
Government has a role to play in nurturing new industries, but taxpayers should demand that the subsidies will eventually end and the new industry will be standing on its own two feet. That is not happening with the film giveaways. The cost keeps rising — it’s grown more than sixfold in a decade, and in the past two years we’ve spent nearly half a billion dollars.
Supporters of the giveaway program argue that if the state cuts off the subsidies, Hollywood will take its business elsewhere. But that underscores the problem: A decade of subsidization has not succeeded, and there is no end in sight.
Louisiana has a budget crisis so towering that we may be cutting aid to higher education by four-fifths, forcing tuition increases that will smother our young people under even more debt. In 2011, the state spent more money subsidizing one film — “Green Lantern” — than it did on all of The University of New Orleans.
Even Hollywood’s strongest advocates know there is insufficient support in the Legislature to continue paying for unlimited subsidies, especially since states from Massachusetts to Michigan are talking about ditching their motion picture giveaways.
A pathway toward more limited credits should begin this year but provide a glide path rather than a crash landing.
We like the film industry in Louisiana. Louisiana taxpayers lavishly supported the productions in their infancy, and the industry has been a friend and a good employer. We just want the industry now to support itself like any other grown-up.