Patt Morrison for January 20, 2011

Have production crew, will travel: Goodbye to tax cuts for Hollywood?

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Government subsidies for film and television productions face an uncertain future as lawmakers attempt to reduce government deficit.

States grappling with huge budget deficits are making tough decisions about cuts to social services, pensions, and health care spending while at the same deciding whether to continue giving tax cuts to subsidize Hollywood’s film making machine. Before the economic downturn, states were competing for the attention of Hollywood and the jobs and economic stimulus big production crews brought with them. Today, many are taking a second look. Arizona, Iowa and Kansas have either dropped or scaled back their programs, and Pennsylvania, Michigan and New Mexico are also rethinking their love affair with Hollywood. Some speculate that the cut backs may create a mass exodus to countries like New Zealand where the country is helping to underwrite a $500 million production of J.R.R Tolkien’s The Hobbit. Studies on the economic impact of Hollywood coming to town have rendered very mixed results. One found that film subsidies were costing a state $88,000 a job while another found that the state made $2,000 with each job created. Here in California tax credits for Hollywood are safe…at least for now.

Guest:

Vans Stevenson, Senior Vice President of Government Affairs, Motion Picture Association of America (MPAA)


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