Connecticut”™s film tax credit program has had less than boffo results when it comes to job growth or income, according to a new report.
The study of film tax credits here and in four other states ”“ Massachusetts, New York, Georgia and Louisiana ”“ was conducted by the University of Southern California Sol Price School of Public Policy. Those states, which the report says represent 77% of all film incentive expenditures in the U.S., have cost taxpayers a total of nearly $10 billion since their programs were enacted.
“The states investing the most in incentives are not getting the return on investment taxpayers deserve, pure and simple,” said Michael Thom, associate professor at the school and author of the report. “These incentives cost taxpayers billions of dollars, at a time when that money could be directed to other much need public services.”
According to the study, Connecticut issued $1 billion in tax credits for film production between 2006, when the film tax credit program was launched, and 2017. The state”™s tax credits program offers production companies a 10% to 30% tax credit, depending on the production expenses or costs.
According to its 2018 annual report, the state Department of Economic and Community Development said that the annual average total credits issued over the 2009-17 calendar year period was $68.5 million, “suggesting that the average ”˜qualifying”™ value of film, television and digital media production in the state was $228,315,500 per year, or over $2 billion in total for the period for such productions applying to DECD for the 30% credit.”
However, it added, its tabulation “suggests that while there are gains in jobs, the additional revenues gained by the state do not compensate for the loss in state tax revenue due to the credits.”
Nevertheless, the DECD has objected to the USC report, noting the presence of Blue Sky Studios, which relocated to Greenwich from White Plains in 2009, and ITV America”™s and Wheelhouse Entertainment”™s announced move to 860 Canal St. in Stamford, which those firms said would create approximately 450 new jobs. The DECD is supporting that project with a $6 million loan to ITV America and a $3 million loan to Wheelhouse Entertainment, with partial forgiveness based on jobs created.
The report has also come under fire from The Motion Picture Association.
“It is unfortunate that a well-respected academic institution that counts some of the greatest filmmakers, directors, and actors among its alumni, is promoting this fundamentally flawed research,” MPA Senior Vice President Vans Stevenson said. “Reputable economists have found that Prof. Michael Thom”™s previous work had serious deficiencies, and this study is no different.”
