Other states will give much more. Montana, for instance, offered enough that it stole the production of “Yellowstone,” the television serial that, for three seasons, had allegedly brought tens of millions in economic development to rural Utah. Season four was filmed almost entirely in Montana.
You should already know how this will go.
Check that. Some Hollywood people don’t want to film in Georgia any more because of some election-related laws that state has passed.
The volatile world of competition over film productions doesn’t hinge on money alone. Politics can come along and smack you in the face, much as it does with the convention and trade show business. Just ask certain outdoor retailers why they don’t want to return their industry’s biggest trade show to Utah. It has nothing to do with subsidies. They don’t like how lawmakers treat public lands and national monuments.
On the floor of the state Senate this week, Sen. Lincoln Fillmore, R-South Jordan, said he opposed lifting the cap for film subsidies.
“This is a check from the state treasury that directly pays 20% of the operating expenses of a private company,” he said. “I cannot imagine us considering that for any industry, but somehow we do it for this one.”
C’mon, senator, you don’t have to have that much of an imagination. In 2018, The State Tax Commission identified 69 tax exemptions Utah had extended to private businesses, adding up to $650 million per year, or about one-fifth of potential sales tax collections.
The problem with these is, while those businesses do help the local economy, newer businesses have a tougher time growing and competing because they aren’t getting the same breaks.
And when it comes to luring business that other states also want, things can get ugly fast. A few years ago, Amazon announced it was looking for a place to put a new headquarters. Just in case the states didn’t get the picture, the company put this in its request for proposals: “Incentives offered by the state/province and local communities … will be significant factors in the decision-making process."
Utah entered that sweepstakes, too, but it kept its offer secret.
If I had a dime for every time I’ve heard politicians explain how they have no choice but to offer incentives because, well, everyone else is doing it, I’d have a lot of dimes I would need to pay taxes on, which is more than those businesses have to do.
Despite all this, I have to give Utah credit. The state at least requires film companies to provide receipts proving they spent money in Utah before getting any credits. Still there is a lot of debate over the value of such productions.
In a 2018 study, economist John Charles Bradbury of Kennesaw State University said states get about 27 cents back on every dollar of film incentives. “Though some studies of (motion pictures industry subsidies) find some positive impacts on the film industry, the estimated effects are small and inconsistent, which calls into question the main pathway for (motion picture subsidies) to produce a multiplier effect,” he said.
That’s academic-speak for, we doubt whether the money film productions spend really helps the economy the way some people say.
The Wall Street Journal said Michigan ended its program in 2015 after its Senate Fiscal Agency found the state had paid up to $186,519 in taxpayer money for every job created in 2008. Another study found these were mainly short-term movie jobs, not the high-paying career jobs that help state economies long-term.
I don’t know whether the same is true in Utah, but I do know that Kevin Costner probably wouldn’t be complaining about money here if other states weren’t being so generous.
The Wall Street Journal said Oklahoma has more than tripled the cash rebates it was offering, in order to lure productions such as “Stillwater,” a film by Matt Damon. Even California, home of Hollywood, is now offering tax credits.
Utah has scored some victories in this competition. “High School Musical” started a pilgrimage, of sorts, to Salt Lake City’s East High School. That was good for tourism.
But not every production yields those results. The question is, how much is too much when giving in to Hollywood’s demands?