State Film Tax Credits Spared Big Cut by Legislature
May 10, 2013
As state legislators debate a budget that would hack Louisiana’s spending on areas from health care to transportation, film industry folks were keeping their fingers crossed for a “no," until the bill changed.
Locals have grown accustomed to film crews and celebrity sightings in what’s often termed the ‘Hollywood South,’ especially in the past couple of years. The Motion Picture Investor Tax
However, Louisiana’s budget crisis made lawmakers uneasy about the loss in tax revenue. Gov. Bobby Jindal publicly came out against the credits, which some figures say cost the state $170 million in taxes from 2012.
Legislators in the House took the reins from Jindal after deciding to turn away from the gov's budget plan, but film tax credit cuts stayed in the proposed spending plan in the form of House Bill 696. Initially, lawmakers proposed to cut the program by $34.5 million. On Thursday, however, the cuts were diminished to $20 million, which is a number that sits better with the film industry. That bill passed the House Friday.
"...Today they were able to get a change passed which is, for the most part, perfectly acceptable to the industry," said Will French, President of the Louisiana Film and Entertainment Association.
French said that number crunching of how much money is lost with tax breaks misses the long term effects for the state’s national reputation and long term economic growth.
The program cost the state $170 million in taxes in 2010, and $168 million in 2012, according to a report from the state auditor. However, French said that those figures actually indicate an increase in state revenue when one considers how much the film industry has grown.
“The industry has grown by 85 percent,” said French. “It’s 85 percent larger as an industry, and the actual cost to the state is starting to creep down,” he explained.
French said that the strict tax analysis fails to address matters of employment, business sales, and ‘the brain drain.’ “On an annual basis, the film industry provides $1.1 billion worth of business spending and supports 14,011 jobs,” said the industry veteran.
Stepping back from money signs, French said that the positives far outweigh the negatives when one considers Louisiana on a national stage (or set). “Everyone is not tied to being in Hollywood anymore,” said French. “There is a 50 percent reduction in on-location shooting in L.A. The longer we can keep our nets open and steer that migration into Louisiana as opposed to other states [the better],” he said.
Whatever your opinions are on Swamp People and Duck Dynasty, French said reality television is growing the tourism industry in places that would have otherwise remained under the radar.
“Monroe, Louisiana derives a lot of tourism because of Duck Dynasty,” French said. “It keeps the tourists coming, and it raises our profile.”
With more money and more talent comes technology, said French. “It’s higher quality, it’s more user friendly,” said French. “Now you can do a film from start to finish on location.”