Politicians love spending other people’s money, but they’re particularly star-struck when it comes to subsidizing Hollywood. More than three dozen states — including Nevada — offer handouts to lure film and TV production companies.
Never mind that, despite the pronouncements from those who benefit from such largess, this type of corporate welfare does little to stimulate actual business activity. A 2012 report by the Tax Foundation revealed that “film tax credits cost states revenue” and that such incentives “largely shift production from one sector to another without producing a net increase in economic activity or employment.”
Take New York state.
Nick Gillespie of Reason magazine reported last week that a highly touted “film hub” near Syracuse, created in 2014 with $15 million in taxpayer money to attract film production, was just sold for $1. The studio had “promised to produce hundreds of jobs and bring Hollywood’s glitter to central New York,” The New York Times reported earlier this month.
Instead, the project was “anything but a success,” the paper noted, primarily benefiting the builder who won the “lucrative contract.”
Many states have scaled back or eliminated film subsidies in recent years, but the Silver State plowed forward in 2013 — thanks to state Sen. Aaron Ford, D-Las Vegas, who is now the chamber’s majority leader — and set aside $80 million for film handouts. Most of that fund was later diverted to partially pay for the Tesla incentive package, but the program remains on the books.
The New York fiasco should serve as a cautionary tale for Nevada. There are much better uses for taxpayer resources than lavishing cash on Hollywood producers.