[Editor's Note: This story has been corrected to reflect that LBP's Tim Mathis wrote the report.]
Louisiana’s lawmakers must be seeing stars.
That would at least explain the continued push to lure Hollywood to Louisiana via tax credits, which according to the Louisiana Budget Project, is expensive and has done very little for the state’s economy.
LBP analyst Tim Mathis writes in a recent report that the Motion Picture Investor Credit has proven unsuccessful in creating permanent jobs, and for every $7.29 paid in credits, only $1 comes back to the state’s coffers.
That credit alone resulted in $85.2 million in losses in the state’s individual income tax revenue during the 2012 fiscal year. When you combine all the film tax credits offered by Louisiana, the amount in lost revenue for the 2012 fiscal year comes to a whopping $231 million. In the last 10 years, the amount in lost revenue caused by the state's film industry tax credits equals more than $1 billion.
What’s more, Mathis notes, is that the overwhelming majority of individuals to claim the credit – more than 90 percent – reported annual incomes of more than $250,000.
“Most people who claim the film credit buy them through brokers in $10,000 bundles from movie producers in order to offset the taxes they owe,” writes Mathis.
LBP director Jan Moller says the incentives Louisiana offers to the film industry are disproportionately increasing while budget cuts to education and health care keep coming.
“It’s a question of priorities and we think it’s probably time to start reigning in the cost of these subsidies,” Moller says. “The question is not whether we want the film industry here, the real question is what are we willing to pay to bring them here?”
The state launched the film industry subsidy program in 1992 under the notion that it would begin being phased out in 2010. Yet, state lawmakers had other ideas, and in 2009 passed legislation making the program permanent.