Hollywood handouts 

Incentives – including state tax credits, cash rebates, grants, sales tax exemptions, and free police barricades - used by 44 states and the District of Columbia to compete for Hollywood films don’t create permanent jobs, spur economic growth or even bring in tax revenue, according to a new study by the Tax Foundation. http://www.taxfoundation.org/publications/show/25706.html.
 
 “The only thing these incentives create is the need for ongoing credits and subsidies. As other states sweeten their incentives, productions move on,” says study author William Luther, who recommends that states repeal their film incentive programs and compete for projects based on lower taxes and regulations for all industries.
 
Kansas has already done so. But most star-struck public officials aren’t taking the hint even though the Associated Press reports that cash-strapped states gave $1.8 billion in tax breaks and other advantages to the entertainment industry from 2006 through 2008.

“The [Connecticut] credit does not ’pay for itself,”’ concurs Jennifer Weiner, a policy analyst for the New England Public Policy Center. “Increases in economic activity spurred by the film credit generate some additional tax revenue for the state from a variety of sources. This additional revenue is likely to offset some, but not all, of the initial cost.”

Michigan has the nation’s highest unemployment and a $700 million budget deficit, but still gave Hollywood filmmakers $48 million in incentives last year and is expected to more than double the sweeteners this year. Republican State Sen. Tom George admits that “we don’t even get back half of what we pay out. I don’t even know if we get back a quarter of what we pay out” – but inexplicably supports the Hollywood handout anyway.

D.C. – which is now literally nickeling and diming city residents by charging them five cents for each bag to hold their retail purchases – promised Columbia Pictures $2 million to shoot a film starring Reese Witherspoon and Owen Wilson in the city. Last month, the production company demanded the $1.4 million it hadn’t yet received.

But really, how can you expect public officials to think about mundane stuff like your money when there’s a possibility they could get their photos taken with Brangelina?



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A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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