After a heated debate over priorities given the state budget shortfall, a House committee on Friday decided to keep the cap on credits for movies, TV shows and commercials shot in the state at $180 million a year rather than cutting it to $90 million.
The House Ways and Means Committee voted 8-4 to maintain the current subsidy even though some legislators suggested that the money should be used instead to stave off possible cuts in vital public services.
The state-subsidized credits incentivize production companies to film in Louisiana, once deemed “Hollywood South.” But the Legislature also is trying to solve an estimated $648 million “fiscal cliff,” and it is not clear if it will approve enough revenue measures to avoid the cuts.
“I think health care and education should be prioritized over Popeye’s commercials,” argued the bill’s sponsor, Rep. Phillip DeVillier, R-Eunice.
“I’m looking at something where we can prioritize our state dollars a little bit better,” he added. He noted a “poor” 23- to 25-cent return for each dollar that the state invests in trying to lure film productions.
By lowering the cap on the tax credits, the bill would have provided an additional $90 million to the state general fund.
[content-2] [jump] Rep. John Stefanski, R-Crowley, listed productions receiving the credit that he regarded as insignificant given the state’s current economic crisis. They included three Popeyes commercials, a Walmart advertisement and the TV show Pit Bulls & Parolees.
Chris Stelly, executive director of Louisiana Entertainment, a division of the state’s economic development agency, explained that the state subsidizes production companies, not the companies running the ads.
Rep. Julie Stokes, R-Kenner, praised the Popeyes commercial. “How often during a football game do you see the French Quarter being highlighted over and over again?” she said. “It highlights Louisiana in a very positive way.”
More movies used to be made in Louisiana. Legislators implemented measures in 2015 that resulted in declines in film production as wary producers began to seek opportunities in other states like Georgia, which has no caps on its tax credits, and then made other changes in 2017 to win some of the business back.
The film industry provides roughly 17,000 jobs to Louisianans, and state universities have recently adopted programs granting film-centric degrees. The aim of the credits is to encourage companies to spend funds on content created in Louisiana and other local vendors.
Mandi Mitchell, assistant secretary of Louisiana Economic Development, acknowledged that the film tax-credit program has not generated substantial returns for the state treasury. But she said that each dollar spent by the production companies has a impact of $4.32 as it ripples through the economy.
Rep. Barry Ivey, R-Baton Rouge, said he had never been an advocate for the movie industry. But he said he did not believe “in completely ripping out the rug underneath businesses who have invested millions of dollars in our state.”
Rep. Robert Johnson, D-Marksville, also supported the credits. “A lot of times we get criticized for credits we give out but this one seems to be actually producing jobs in Louisiana,” he said.
Stokes argued that the tax credit program was “competitive” and “strategic.”
“I hope that everyone will keep supporting the film industry and not destroying it,” she said.
Mitchell said that “constantly amending the film program is going to introduce uncertainty and cause companies to look elsewhere.”
“We would lose the industry, and that’s not being melodramatic,” she added.
[content-2] Louisiana Department of Revenue legal analyst Luke Morris explained that reducing motion picture tax credits could prompt litigation by production companies with existing tax credits.
Prior to production, Louisiana Economic Development reserves credits for motion picture applicants for the next fiscal year.
Those present at the committee in support of the bill included representatives from Louisiana AFL-CIO, Working People in the Film Industry, Ranch Film Studios of New Orleans, Louisiana Film and Entertainment Association, and Celtic Studios, based in Baton Rouge..
“Some people want to give away money to the film industry, to Hollywood, but at the same time some of those people don’t want to vote for any taxes to pay for this,” Rep. Jay Morris, R-Monroe, who supported cutting the subsidies.
“I’m not going to raise taxes to pay for it so TOPS gets cut, and health care gets cut,” he added.