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Filed under: Audio •Budgeting •Business •Distribution •Editing •Legal •Post Production •Pre-Production •Production •

Film-Office Tax Credits Scandal!

The Los Angeles Times has an interesting article about Iowa’s “alleged abuses of its film tax credit program.”  I don’t know how surprising this is, given that the Iowa film office apparently described their program as “half-priced filmmaking.”

It would be wrong not to note that the LA Times has a horse in this race - there is more than a hint of schadenfreud in this piece - but on the whole, this revisits well-trodden ground.  Jeez, even I wrote about it!

Not to pile on, but there is yet another article on the subject this morning from the New York Times (registration probably required), regarding New Jersey’s film subsidy program, which Republican Governor Chris Christie is looking to gut.  The intense problem of gauging these programs effectiveness is summed up in this one excellent paragraph, written by NYT reporter Michael Cieply:

Studies about the efficacy of film credits, which became widespread in the last eight years, have been maddeningly divergent in their conclusions, depending on methodology, the structure of the credit and, sometimes, who sponsors the report.

I believe we have a BINGO!

When I wrote about Wisconsin’s film subsidy program back in 2009, things were tough for state governments.  By all accounts, things are worse in 2011.  If I were a betting man, I’d wager that film subsidy programs are going to become an even more endangered species in the near future.

What do you think?

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New Mexico’s new governor is looking to scale back the state’s tax credit from 25% to 15%. An admittedly narrow report showed a poor return on the credit (I think it was under 20 cents on a dollar); a wider-ranging report showed well more than $1 of follow-on income produced for each $1 spent - divergent, as you say.

One problem with New Mexico’s tax credit program was that in an attempt to avoid abuse, it is so narrowly worded that it excludes a lot of smaller players from taking advantage of it. As a result, it’s the film production houses in California etc. where most of the money is sent when the film is done and the crews go home, which doesn’t look good in political commercials.

The deeper question: Is media creation an important enough industry to offer subsidies to attract, and to use as a form of jobs program? The answer changes if you restrict your incentive program to just big films, or broaden to include industrials and/or web videos and/or commercials etc. etc.

Posted by Chris Meyer  on  01/21  at  12:03 PM

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