Money for movies
Published May 13, 2014
Editorial by Greensboro News-Record, May 13, 2014.
Wilshire Boulevard, meet Tobacco Road.
Such big-screen blockbusters as “Iron Man 3,” “The Hunger Games,” “Forrest Gump” and “The Hunt for Red October” were filmed, not in Hollywood, but in North Carolina.
But are the jobs, the spending and the positive publicity those film productions bring to the state worth the amount taxpayers are investing to lure them?According to figures released last week by the N.C. Department of Revenue, moviemakers spent nearly $245 million in North Carolina during the last fiscal year and qualified for $61 million in rebates. The average yearly total has been $57 million in rebates since 2011.
Those discounts are based on a formula that offers a 25 percent refund to movie and TV productions that spend more than $250,000 on specified services. As of late April, $35 million of those rebates had been paid so far this year from the state’s general fund. But the program will expire at the end of 2014, unless state lawmakers renew it, and its future is not clear. Some likely will question its benefits versus its costs when the legislature reconvenes this week.
The incentives certainly have their selling points. During the last fiscal year the 33 productions that qualified for rebates employed nearly 14,000 workers. Among the fringe benefits of a mega movie franchise like “The Hunger Games” was a budding tourism industry based on sites that provided settings for the film. Television shows that are filmed in North Carolina include “Sleepy Hollow,” “Homeland” and “Under the Dome,” all of which provide steady paychecks and ancillary benefits to the local and state economies.
Critics point to the number of competing states that have discontinued similar film incentives programs or allowed them to expire altogether. They challenge a study by an N.C. State professor that they say overstates the value of movies and TV shows to the state’s economy. And they say film production companies and studios tend to benefit the most from the film incentive program, but that’s hardly surprising and it still involves jobs and spending in the state.
The North Carolina program may not be perfect, but it earns considerably more than it costs.
Even so, the vast, “y’all come” scope of the program, which involves not only movies and television series, but some sports programs, talk shows and reality shows, could use an overdue trim. In 2010 and 2011, the state paid World Wrestling Entertainment (?) $570,000 in tax credits. In 2012, the late-night talk shows of Jon Stewart and Jimmy Fallon got $300,000 in film rebates when they broadcast from the Democratic National Convention in Charlotte (where else could you go to cover a convention in Charlotte ?). Better to focus the program on movies, scripted series and commercials.
Finally, opponents of film incentive point to valid and familiar arguments against the general idea of incentives.
But the reality is that incentives aren’t likely to be outlawed by Congress anytime soon, if ever.
North Carolina’s film incentives program may need some editing (what movie doesn’t?) but there’s no need to yell “cut.” This show should go on.
May 13, 2014 at 10:30 am
Norm Kellly says:
Gee, I was under the impression that corporate welfare was a bad thing.
Now I'm finding that corporate welfare is good. That is, if you are a favored company. But only if you are a favored company. What if Philip Morris decided to film a commercial in NC? I know commercials for tobacco products are NOT allowed to run in the US. But commercials are still legal in other countries. So if 'big tobacco' decided to take advantage of our film credits for a commercial that would run outside the US, would that be a good use of film credits? Or is it only for favored companies that the credit is good?
Why would it take an act of Congress to outlaw give-aways like this? Why can't the state simply make a decision to stop making the rest of us pay for incentives that benefit only a minority of businesses? Why should Company A pay taxes when Film Productions, Inc. gets a tax credit? Why should Company A do business in NC long term, many years, and still have to pay taxes, higher taxes, so that a temporary Film Productions, Inc can get a tax credit for doing temporary business in the state? Who deserves the 'reward' 'incentive' more? Someone who is committed to long term or someone who is mostly here for the benefit the state is willing to provide?
If the state PAYS some people to do business here, doesn't that automatically FORCE someone else to have to make up that difference? The state does NOT just simply give money away without making it up somewhere. So, who suffers in order for the state to reward the temporary boost to the economy? Who gets to decide who suffers and who benefits? Why would we allow someone to decide that a long-term commitment company needs to pay higher taxes/fees so a temporary company with no long-term interest in our state can be paid to come here, temporarily? That someone probably has an outside interest in doling out the money, anyway.
Isn't it just easier to eliminate all corporate welfare and make the playing field level? You know, that often heard but never understood line from demon politicians. The ones who claim that leveling the playing field means purposely penalizing those disliked by the demons in order to give more to the favored groups of the demons. But stealing from one group to give to the other group is somehow considered a level playing field by the demons. And their butt-buddies in the media, used-to-be news outlets. Why is it legal to penalize the one group in order to reward the other group?
