Blockbuster Or Flop? Film Tax Credits Offered By States Bring Mixed Reviews
But Author Who Chronicled Atlanta-Based A-List Production Says Such Incentives Are Mutually Beneficial And Likely To Stay
By Meredith Jordan
The entertainment that movies provide is deeply embedded in American popular culture. And in recent years, the making of them in many states has become an important consideration in their economic strategy.
States have lured Hollywood movie production with tax credits, banking that shooting films in their area will substantially boost their economy. As of 2018, 31 states offered film tax incentives, according to the National Conference of State Legislatures (NCSL).
While the move has been controversial in some states and spurred legislative debate, largely over lost tax revenue and budget pressure, it has been a hit in others, such as Georgia, with Atlanta now being called “Hollywood East.” The state claims an economic impact of $9.5 billion since the film tax incentives were passed in 2008. Georgia doled out $600 million in incentives alone in 2016.
Meredith Jordan, an author who chronicled the making of Last Vegas, which was shot in Atlanta, Ga. and Las Vegas, says film tax incentives have proven to be mutually beneficial and are likely to stay.
“Tax credits have reshaped the face of movie production in the United States,” says Jordan (http://www.belowthelinebook.com), author of Below The Line: Anatomy of a Successful Movie, a rare behind-the-scenes look at an entire movie production. “To understand why much of the movie happened in Georgia is to take a quantum leap into the business of Hollywood in the new millennium. This movie had a $36 million budget, but with tax credits it became a $30 million movie for filmmakers.
“Tax incentives have come and gone in a lot of states. They’ve worked for the states that stuck with them.”
Some state politicians and economic experts say the benefits states receive in association with movie production aren’t enough to justify tax breaks for the industry. Some states have dropped or reduced tax incentives for films. Other state leaders see the credits as a necessary tool that stimulates the broader economy; New Jersey and Ohio are among those who called for bigger tax breaks recently for film companies.
Jordan notes some different ways film tax credits impact state economies:
- Creates new businesses and job sectors. States committed to the film industry see a steady flow of production annually, which creates new businesses sustainable for the long-term. “New companies open to service the industry,” Jordan says. “In Georgia, companies like Panavision and Central Casting have opened offices along with big studios like Pinewood. With time, other needed businesses have filled in, from prop and costume houses to catering companies and casting agencies.”
- Enhances existing businesses. In building an infrastructure for future filmmaking, the economic impact is felt across many parts of the already-existing business community. “When a film or TV show is produced, a lot of jobs come with it,” Jordan says. “People sometimes forget that studios also hire local companies – dry cleaners, caterers, paper shredders, hotels and florists. They buy clothes and furniture and greenery. All that has an enormous effect on direct spending. Other industries are impacted as well, including health care, manufacturing, food services, transportation, retail and real estate.”
- Increases awareness of the state. Filming locations show off a place. Some become cultural landmarks. All of that encourages tourism. “It all works hand-in-hand,” Jordan says. “It shines a brighter light on the state, making people aware of it and more appealing in the process.”
“The movie industry relies heavily on incentives,” Jordan says. “Take them away or cut them too much and they’ll stay home. The trend among numerous states is to make their tax programs appealing to bring Hollywood to them.”
About Meredith Jordan
Meredith Jordan (http://www.belowthelinebook.com) is the author of Below The Line: Anatomy of a Successful Movie. Jordan, who had the rare experience of being an embedded journalist for an entire Hollywood feature, chronicled the behind-the-scenes happenings in the making of LastVegas. An award-winning reporter, Jordan worked for East Coast news organizations for 25 years, including Dow Jones & Co., Cox Communications and National Geographic.