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.”