The Legislature’s debate over the budget and the film tax credit program continues as the legislative session begins to wind down. The focus is on what can be done this year to control the cost of the program without causing any harm to the industry by the possibility of reduced film production. Missing in the discussion is the long-term viability of the industry and its dependency on tax credits.
The motion picture incentive law states that its purpose is to develop an independent self-sustaining industry. Ten years and nearly $1.5 billion dollars in tax credits later, it is time to determine if the program is working as the Legislature intended. Indeed, if the local film industry’s claims are true, that even a small change in the credit would have a crippling effect that sends studios and filmmakers to other states, then it certainly begs the question.
Clearly, film production has had a tremendous economic impact on the state and we have done a great job of building film infrastructure. But we need to do a better job of leveraging the activity that the tax credits create and ensuring the growth of a more-indigenous industry. There is a difference between economic impact and economic development, just as there is a difference between an incentive and a subsidy.
At some point we have to determine whether the taxpayers are investing in an incentive program that is building a homegrown, self-sustaining industry as the legislation requires, or if it is simply subsidizing Hollywood.
It appears that the Legislature is not prepared to address this issue yet. To pull the rug out from the Louisiana businesses and thousands of film industry workers with a hastily developed quick fix is not prudent. But to ignore the growing cost of the program, its diminishing return on investment, and the industry’s tax-credit dependency in perpetuity is not in the best interest of Louisiana taxpayers or its entertainment industry.
Louisiana, with its innate creative talent, is uniquely positioned to be the nation’s center of entertainment content development, particularly in the digital age, but only if we come up with a plan that focuses on nurturing our own filmmakers instead of just Hollywood’s.
We have built a solid foundation. Now it is time to evolve and take the courageous next step. The business, economic development and legislative communities need to come together before next fiscal session and develop a well-thought-out strategy that incentivizes the growth of a homegrown industry. We can’t afford not to.
Sherri McConnell, consultant
former executive director,
Louisiana Office of Entertainment Industry Development