Louisiana Film and TV Tax Credits Trigger Debate: What Is the Payoff?

After a state agency report concluded that Louisiana’s film and TV tax credit program supports thousands of jobs but at a heavy cost, the MPAA and film industry representatives countered on Monday with a far rosier picture of the value of incentives.

Louisiana boasts one of the most generous tax credit programs in the country — one that supported 12,107 jobs last year, according to a study commissioned by the state’s Department of Economic Development. But that study, unveiled last month, also showed that the state was getting just 23 cents on the dollar back in taxes from the tax credit outlay.

The MPAA and the Louisiana Film and Entertainment Assn., however, challenged the methodology of those figures. They say that such things as tourism have to be considered, or the economic impact of visitors drawn by the locales of movies such as “Beasts of the Southern Wild” or TV shows like “Duck Dynasty.”

They argue that the return on investment to Louisiana tax coffers breaks even. Their own study showed that in 2013, production and tourism spending related to movies and TV shows generated state tax revenues of $95.1 million and local tax revenues of $85.9 million, for a total of $181 million. According to the Louisiana Department of Revenue, $178.9 million in tax credits were redeemed that year.

In a conference call with reporters, MPAA senior VP Vans Stevenson argued that the value of the credits should be measured also by other factors like the creation of a permanent entertainment industry creating high-paying jobs.

“The bottom line is if these credits weren’t working and creating jobs and investments in Louisiana and elsewhere, they wouldn’t be there,” he said.

The MPAA study, prepared by HR&A Advisors, showed up to $4 billion in economic output from movie and TV show production in Louisiana in 2013.

The production spending associated with the tax credit, their report showed, supported 10,800 jobs, generating up to $471.2 million in personal income.

Tourism spending connected to movies and TV shows supported 22,720 jobs, the study showed, and up to $766.6 million in personal income.

The tourism figure was generated from an online survey of 1,381 recent visitors to Louisiana that showed that 14.5% of tourists to Louisiana were “induced” by movies and TV shows filmed there.

Questioned about the methodology of the survey — conducted by a market research firm and not a scientific polling firm — Stevenson pointed to the the draw of Hollywood to visitors to California.

“Why is Southern California such a tourist mecca since the 1930s?” he asked. “It’s because of Hollywood, and that is spreading across the country.”

Still, the public interest group Louisiana Budget Project took issue with the MPAA report, calling it “deeply flawed.”

“A typical viewer of a typical Louisiana-based production doesn’t even know they’re watching a Louisiana movie,” the group said of the tourism figures.

Although Gov. Bobby Jindal has not scaled back the program in his latest budget, some lawmakers have proposed significant changes, like limiting the expenses that can be claimed and capping the annual credits at $300 million.

Stevenson said such changes have to “be balanced against keeping the program predictable as well as competitive.”


More Biz

  • Chuck D of Public EnemyGods of

    Public Enemy’s Chuck D Slams Grammys Over Deborah Dugan Ouster

    Chuck D, frontman of Public Enemy — who are receiving the Lifetime Achievement Awards at the Grammys next week — posted a long statement on Instagram criticizing the Recording Academy over its sudden ousting of new president/CEO Deborah Dugan yesterday. Dugan, who had been in the job only five months, was placed on administrative leave after [...]

  • Any Given Wednesday With Bill Simmons

    Spotify in Talks to Acquire Bill Simmons' The Ringer: Report

    Spotify is in early talks to acquire The Ringer, the digital content and podcast network launched by ESPN alum Bill Simmons in 2016, according to a report in the Wall Street Journal. A representative for Spotify declined to comment on the report. Reps for Ringer did not immediately respond to a request for comment. Spotify’s [...]

  • Deborah Dugan arrives for the 20th

    Deborah Dugan's Recording Academy Ouster Follows Multiple Tussles With Board

    “Change is afoot,” Deborah Dugan said more than once during interviews with Variety in the weeks before her shocking removal from her post as president/CEO of the Recording Academy after just five months on the job. During those conversations, Dugan spoke of changes she planned to make in the Academy’s staffing organization, its Board of [...]

  • Weinstein Trial

    Does Harvey Weinstein's Jury Selection Strategy Make Any Sense?

    Harvey Weinstein’s defense team appeared to have a strategy for jury selection: keep white women off the panel. They didn’t put it that way, because picking jurors based on race or gender is illegal. But on Thursday and again on Friday, prosecutor Joan Illuzzi accused the defense of using its peremptory challenges to systematically exclude [...]

  • Bob Iger

    Bob Iger's Disney Compensation Drops to $47.5 Million in 2019

    Disney chief Bob Iger saw his compensation for 2019 drop to $47.5 million, a 28% decline from his 2018 pay package. Disney’s leader earned $3 million in salary and a $21.8 million bonus, plus another $10 million in stock awards and $9.6 million in stock options, Disney disclosed in the company’s annual proxy filing with [...]

  • Peter Chernin'Spies in Disguise' film premiere,

    Disney and Chernin Entertainment Parting Ways (EXCLUSIVE)

    Disney and Peter Chernin are ending Chernin Entertainment’s long-standing film production deal with 20th Century Fox (recently rebranded to 20th Century Studios), Variety has learned. The split was a mutual and amicable one, driven by the simple fact that Disney rarely brings on third-party partners to finance its feature films. “I have nothing but praise for [...]

  • NAB Show Partners With Variety for

    NAB Show Partners With Variety for Executive Leadership Summit

    The National Association of Broadcasters (NAB) Show has announced that it will be partnering with Variety to produce the third annual Executive Leadership Summit, taking place Sunday, April 19 at the Las Vegas Convention Center. NAB Show is the world’s largest convention encompassing media, entertainment and technology, where global visionaries convene to bring content to [...]

More From Our Brands

Access exclusive content