Business columns: State finances and movies don’t mix
Legislators need to wipe the Hollywood stardust from their eyes, said Josh Barro in RealClearMarkets.com.
With their tax receipts plunging and unemployment costs rising, many states are cutting spending, said Josh Barro. But only a handful, including Kansas and Arizona, have cut subsidies for film and television production. The other states that offer such subsidies should follow suit, because “these programs are a waste of money.”
Contrary to the way they’re sold to state legislators, film and TV production subsidies aren’t job creators. Sure, production companies hire locally during production, but those jobs “are temporary and end when production ends.” And even after a state has spent heavily to lure production companies, it can lose them quickly to other states offering better deals.
But the real problem is that the subsidies represent a significant drain on state treasuries, returning only 19 cents in tax revenue for every dollar awarded to production companies. Legislators need to wipe the Hollywood stardust from their eyes. “Bribing people to do business in your state is not a sustainable way to grow the economy.”