McCrory proposes to extend Hollywood cronyism
Published May 24, 2014
by Brian Balfour, Civitas Review online, May 23, 2014.
Gov. McCrory late yesterday signaled his approval to continue North Carolina's Hollywood cronyism in the form of targeted tax credits for film production.
Gov. Pat McCrory has proposed changes to North Carolina's film tax credit program that his administration says would cost the state much less than the one set to expire at year's end. … The budget "revises the state's film strategy in order to encourage long-term capital investments versus short-term projects with short-term returns," McCrory spokesman Josh Ellis said in a statement, and by "implementing a more cost-effective approach to encourage investment in the film industry in North Carolina."….Films made in North Carolina during the last fiscal year qualified for $61 million in rebates, according to state government figures. The proposed state tax rebate program would cost about $10 million annually, Ellis said.
Directing the film industry toward "long-term capital investments" is more central planning of the economy. So not only is McCrory giving his approval to granting unfair political privileges to politically-favored industries, he is attempting to micro-manage the industry's structure of production by favoring long-term vs. short-term projects. If such tax treatment of the film industry is supposed to create jobs in that industry, why not grant all businesses the same tax credits? Why play favorites? And perhaps the McCrory administration should check out this BusinessWeekarticle about the town of Allen Park, MI to learn more about incentivized "long-term capital investments" in the film industry.
In August 2009, Allen Park’s city council unanimously voted to sell $31 million in bonds to buy and improve 104 acres so Lifton could develop a $146 million studio as a tenant of the city. At the event announcing the partnership, then-Mayor Gary Burtka declared Allen Park “Hollywood 48101” (a reference to the city’s Zip Code), and Lifton spoke of cranking out movies the way Henry Ford mass-produced cars. Lifton promised 3,000 jobs, which would have made the venture, known as Unity Studios, the biggest employer in town. …. That script didn’t pan out. Lifton has vacated the property and returned to California, leaving Allen Park with a bad case of buyer’s remorse…..Allen Park is hurting as a result. The bond sale—now under investigation by the U.S. Securities and Exchange Commission—doubled the city’s long-term debt, and the annual bond payments of $2.6 million are draining its $20 million general fund. The city officials who approved the deal have all stepped down or been voted out of office.
May 24, 2014 at 9:19 am
Rip Arrowood says:
"...granting unfair political privileges to politically-favored industries..."
You act as if this is something new for Republicans.
May 25, 2014 at 10:42 am
Richard Bunce says:
Indus tires/special interests would be nothing new for either party whose primary and nearly exclusive goal is to maintain power and is achieved by purchasing favor by favorable treatment of their supporters or unfavorable treatment of their opponents. Of course the most egregious abuse of political power is to promise to provide to large groups of voters government benefits/services usually to be paid for by other smaller groups of voters via the use of the coercive power of government to confiscate the wealth/income of selective groups of citizens.
May 24, 2014 at 11:31 am
Richard Bunce says:
Government must get out of the picking winners and losers business... it is not right philosophically and the government officials are so bad at it.
May 26, 2014 at 10:20 am
Rip Arrowood says:
As long as businesses are allowed to contribute unlimited and anonymous funds to politicians - picking winners and losers will be common and expected in return.
May 28, 2014 at 4:33 pm
Richard Bunce says:
Voters are free to not vote for any candidate who takes unlimited and anonymous funds. Money does not vote, TV ads do not vote, people vote.
