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April 2nd, 2015

Baton Rouge, Louisiana



How much is it worth for Louisiana taxpayers to have movies made throughout the state?  Apparently, quite a lot.  Recent studies have shown that for every new dollar created in jobs, equipment, catering and all the spin off income, Louisiana taxpayers are paying out four times that amount. Bring a dollar in and pay from the state treasury four dollars out.  What kind of deal is this?

In 2002, the Louisiana Legislature authorized a program that offered significant subsidies to motion picture producers who shoot their films in the state.  The program was designed to increase local film production, and producers from all the big Hollywood studios rushed to cash in.  Louisiana’s Office of Economic Development has bragged for years about all the new jobs the program created, and the domino effect of dollars being spent in the state.  But no one until recently has put a pencil to the bottom line.  Neither Louisiana’s taxpayers, nor few in state government, have had any idea how much this program is really costing.

Brad Pitt made a movie a few years ago titled “The Curious Case of Benjamin Button” that was only partially filmed in Louisiana.  Yet the movie received a Louisiana tax subsidy of $27,117,737.  The entire budget was only $167 million, and the New York Times called the cost to Louisiana taxpayers “shocking.”Â  So the question is, whether this glamour business is bringing economic development to Louisiana, or is the state getting little more than momentary glitter?

Louisiana also has a reputation in Hollywood of playing fast and loose with the rules in place.  The higher the budget, the more the program costs taxpayers.  And get this.  Until recently, a production company filming in Louisiana could get tax credits for work done outside the state.  So we are talking here about inflated budgets and work done outside Louisiana, all underwritten by Louisiana taxpayers.  Is that a good deal or what?

A new legislative mandated study was released last week showing that gross tax revenues from all movie production sources, including jobs, rentals, catering, and all other spinoffs brought in a total to the state of approximately $50 million.  But only half of this sum went to the state treasury, where the other half went to the coffers of local government.  The tax credits for all this work, money taken away from the state treasury, totaled $222 million.  So the state brings in 25 million, and pays out 222 million.  That’s more than an eight to one ratio negative to the bottom line. What are we missing here?

The Executive Director of the nonprofit Massachusetts Policy Center issued a report recently that stated: “There is no evidence yet that this is an efficient or effective way to create jobs.”Â  The study went on to point out the tax credits in most states are four or five times higher than that offered to those who build in designated economic opportunity areas, and often more than eight times greater than the standard investment tax credit.”

So far, Louisiana legislators have shown little interest in reviewing the economic impact on the state’s treasury.  One voice raising questions is that of Greg Albrecht, who is the chief economist for Louisiana’s legislative fiscal office.  “There’s no way you can say this makes money for the public treasury,” he said recently.  “It’s an expensive way to create jobs.”

Forty states now offer various subsidies and brag about their low ““ cost production sites.  With so much competition, Louisiana should look at whether giving such abundant tax breaks makes economic sense.  And right now, the financial benefits look questionable.


“The problem is not that people are taxed too little, the problem is that government spends too much.”

Ronald Reagan

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers throughout the nation and on websites worldwide.  You can read all his past columns and see continuing updates at http://www.jimbrownla.com.  You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9 am till 11:00 am, central time, on the Genesis Radio Network, with a live stream at http://www.jimbrownla.com.


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