The Real Impact of State Motion Picture and Television Production Tax Credits
A USA Today story that posted last night on the economic impact of statewide film and television production tax credits unfortunately omits important facts that would have been helpful in presenting a balanced story. While the piece accurately notes that productions spend heavily with local vendors and small businesses including lumber, dry cleaning and lighting, it fails to take a comprehensive look at the economic benefits that have been reaped by states that have built and maintained a robust credit program. The motion picture and television industry is a portable one, and producers need a consistent, reliable economic environment in order to plan to bring production to a state. That’s why states like Georgia, Illinois and New York have enjoyed such economic benefit in the form of jobs, spending and tax revenue. You can read about some of their successes here, here and here. Numerous studies over the past two years have shown that incentive programs for film and television production have resulted in a significant return on investment for a number of states including Massachusetts, North Carolina, New York and Florida. Unfortunately, the story doesn’t mention any of this data. These programs generated new revenue for state coffers, created tens of thousands of jobs and stimulated business for local vendors. In short, they provided an important economic boost to the state. Here are a few highlights from those studies:
- New York: A December 2012 study found that production incentives supported 28,900 jobs and generated $6.9 billion in economic spending in the state in 2011. The study also found that jobs within the film and TV industry in New York grew by nearly 25 percent between 2008 and 2011 – even while private sector employment as a whole declined by 1.6 percent during that time.
- Florida: A March 2013 study on the economic impact of the Florida Film and Entertainment Industry Financial Incentive Program estimated that state and local tax revenues in Florida in the 2011-2012 fiscal year totaled $547 million. The study also found that the incentive supported 87,870 jobs and $2.3 billion in labor income, as well as $7.2 billion in economic spending across the state, both through production spending and induced tourism.
- North Carolina: An April 2013 analysis of the economic impact of Iron Man 3, which filmed in North Carolina, found that the film was responsible for $179.8 million in spending and 2,043 jobs in the state. The analysis also found that the production was responsible for $104.1 million in labor income across North Carolina, and that spending associated with the film engaged 719 vendors in 84 communities across the state.
- Massachusetts: A May 2013 study on the economic impact of the Massachusetts Film Tax Incentive Program found that for every $1 of film tax incentive awarded in 2011, $10 in spending was generated. A total of $37.9 million in film tax credits generated $375.3 million in economic output, and the incentive was responsible for 2,220 jobs in the state.
Nearly 40 states around the country have implemented programs to encourage the local production of movies and television in their communities for one simple reason: motion picture and television production is a driver of local economic growth and capital investment. When looking at the economic impact that these credits have on local economies, it’s important to look at the whole picture. More state-by-state statistics on the production tax incentives can be found HERE.