Last week I wrote about how the fight over film tax credits resumed in Colorado in the form of House Bill 12-1286 sponsored by state Reps. Tom Massey (R-Poncha Springs) and Mark Ferrandino (D-Denver). HB 1286 can be evaluated from two angles:
- First, the impact the bill might have on the state’s film tax credit (or movie production incentive) fund. In its current form HB 1286 would significantly expand the size and scope of the state’s film tax credit fund.
- Second, the bill would establish a new government secured loan guarantee for film, television and media producers. This expansion, though not unprecedented nationally, would be a dramatic change for the state of Colorado.
I address the first concern in my latest commentary for Colorado Peak Politics entitled, “Picture This: Film Tax Credits Demonstrably Wasteful, Ineffective.” Here’s an excerpt from the piece:
Ironically, as Colorado attempts the most aggressive expansion of this program yet, many states are going in the opposite direction. 2010 is widely considered the peak year for states paying out aggregate dollars for film tax credits. Last summer The Economist described this trend bluntly saying, “After a decade of escalation, a stupid trend may have peaked.”
Over the last few years states like Washington and Arizona have phased out their programs, and others refused to appropriate them money. Meanwhile groups like the Center on Budget and Policy Priorities and the Tax Foundation have effectively discredited film tax credits through comprehensive national studies. The details are especially grisly when honing in on specific states.
Let’s start with the “high flyers”: Michigan, New Mexico and Louisiana. For years film tax credit proponents cited these states as success stories. A 2008 New York Times article critical of film tax credits (considered contrarian at the time) has proven prescient. Author Michael Cieply wrote, “(S)tates are moving to rein in their largess that has allowed producers to be reimbursed for all manner of expenditures, whether the salaries of stars, the rental of studio space or meals for the crew.”
I will address the second concern (government secured loan guarantees for filmmakers) in a forthcoming op-ed. In the meantime, check out the full piece available online here. For more on film tax credits in Colorado, see my Denver Business Journal op-ed here; and my previous blog posts here and here.