Film Tax Credits Put People to Work: Intangible Benefits to Tax Credit Programs
Film tax credits have propelled the economy forward for a number of states like Georgia, whose generous incentive program has elevated the state to the third in the country for film and television production.
As highlighted in this recent CBS story on the lackluster box office performance of Ghostbusters, filmed in Boston, states like Louisiana and Massachusetts have been scrutinizing their tax credit programs with an eye towards potentially scaling back or discontinuing them. I think it’s unfortunate that this is the case, given there are sizable intangible benefits that don’t precisely impact the film’s bottom line– but certainly are of benefit to those states.
Measuring the value of film tax credits needs to account for the peripheral benefits such productions provide as new businesses are established and existing businesses expand to support ongoing film production in an area. Film tax credits put people to work and bolster local economies. Local lighting companies, grip companies, caterers, restaurants, prop/set-designers, hotels, Uber, airlines and beyond all reap financial gains from film productions – yet those figures do not go onto the bottom line when calculating the success of a film tax credit. The development of the Georgia Film Academy is yet another example of how Georgia’s expanding film industry is spurring education & professional growth.
Take a look at films like Forrest Gump or Midnight in the Garden of Good and Evil. In the decades since these were produced, Savannah has continued to reap the financial gains of fans who flock to the city to enjoy themed tours, purchase souvenirs and eat at restaurants highlighted in the films. Those tourist dollars do not fit into the financial bottom lines of those movies, but most certainly were derived from them.
So, as we consider the financial benefits associated with film tax credits, decision makers and taxpayers alike need to think more broadly about the intangible benefits that these incentives provide that do, in fact, benefit local economies.