Star-struck states waste millions of tax dollars on Hollywood productions, USC study finds

Source: Emily Gersema, University of Southern California – Sol Price School of Public Policy, Press Release, August 18, 2016

Many states such as New Mexico see returns of less than 15 cents on the dollar and attract no long-term employment opportunities, yet state lawmakers continue to invest millions in the filmmaking incentives.

Nearly all 50 states have lured Hollywood productions with millions of dollars in special tax incentives for filmmaking, but new USC research shows they fail to deliver the long-term economic benefits promised by industry lobbyists and lawmakers.

…..Thom has led two studies of the motion picture industry incentives that most states have enacted on the premise that hosting productions could grow their economies, create full-time steady jobs and improve wages.

The first study, published in July by the journal The American Review of Public Administration, examined the impact of the programs on states’ motion picture industry employment and wages. Thom found that the incentives had no sustained impact on wage growth and little effect on employment. The programs also failed to prompt an expansion or relocation of filmmaking businesses from concentrations in California and New York.

The second study, published recently by the journal American Politics Research, examined why states kept or terminated their incentives from 1999 to 2015. Thom and Ph.D. student Brian An of the USC Price School of Public Policy found a half dozen states ended the incentives as the Great Recession eased. States that slashed the incentives already had spent very little or had grown skeptical that the program wasn’t working, the researchers found…..
Related:
Lights, Camera, but No Action? Tax and Economic Development Lessons From State Motion Picture Incentive Programs
Source: Michael Thom, The American Review of Public Administration, Published online before print June 5, 2016
(subscription required)

Fade to Black? Exploring Policy Enactment and Termination Through the Rise and Fall of State Tax Incentives for the Motion Picture Industry
Source: Michael Thom, Brian An, American Politics Research, Published online before print August 2, 2016
(subscription required)