Lots of hating in these comments for such a benign article about a couple of guys that want more out of life than what they see in their future.
They are working, paying taxes I assume, they are not criminals (well, maybe breaking some drug laws but most of us have) and they are trying to build a storyline for their lives that they can use to break in to the entertainment industry.
Sure, there is a certain desperation to it all but don't all dreams come with a certain stench of desperation until they come true.
I hope it all works for them.
By the way, saw the movie, thought it was silly and a step up from child porn. Korine creeps me out but to each his own.
Always nice to have a fairly civil debate. If you are ever in LA, give me a shout. First drink is on me.
"California had 100 years and is home to every major studio, yet they still need to offer a tax credit to keep production in the state."
Now that's your best point so far.
But it's a different age and Cali shot itself in the foot in many ways...on the other hand, you'll never go broke betting that the Ga. pols will not screw up.
The economy is the deciding factor. If it stays on an upward trend, and state black ink continues... Laissez les bons temps rouler.
I never said programs were cut because of the film subsidy. The point I was making is that, it seems to me, when revenue tanks and the choice is between funding higher education, primary education, pre-K programs, healthcare (the core government functions etc.) or a program that diverts public funds to subsidize 30% of the cost for movies and TV shows, most rational people would have a hard time defending using scarce public funds to pay for movies. I don't know how people can defend such a lavish public subsidy when kids can't get into pre-K.
As for education spending, New Hampshire ranks in the top 10 for achievement and spends over $12,000 per pupil for K-12 (placing it among top 10 states for funding). Georgia was ranked 36th for student achievement in the same Kids Count rankings and per-pupil spending for K-12 was under $3,000 per pupil. New Hampshire's HS graduation rate is also well above the national average, in the 80%+ range and Georgia is well below the national HS graduation rate, in the high 60% range.
While agree that throwing more money at education spending doesn't necessarily mean there will be a correlation in performance, the New Hampshire vs. Georgia example proves the opposite of the point you were trying to make.
Rankings aside, what about that pre-K waiting list? Again, should public revenue go to putting them in a pre-K program or be used to subsidize a movie? I know you want Georgia to "win the fight", but what does that even mean? How about winning a fight to lower tuition costs? Or winning he fight to have universal pre-K? Maybe not as sexy as winning the next Hunger Games movie, but clearly much more important.
I also didn't say Georgia should pick and choose what shoots there, I said that a requirement that the projects be set in Georgia would be a good idea because it would help foster the PR angle and any potential tourism impacts. No, you can't pick what will film in Georgia, but you CAN pick what films will get the subsidy. I offered the suggestion because, one would hope, you would want to get the most bang for the buck.
Wishing for a nation free of state film subsidies isn't some fantastical wishful thinking. Before 2003, it was the reality. No state had a film tax credit program back then. Film tax credits are a blip on the radar in the 100+ years of the US film industry. The historical norm is a level playing field without the subsidy. I am arguing for a return to normalcy. I also recognize there is a competition for these jobs, and it's global. So I think a more pragmatic policy option would be a single national credit. It would keep the jobs domestic and end the costly game of one-upsmanship among the states.
And Pinewood isn't paying to build the studio in Georgia. Rather, they agreed to put their name on the project and manage the facility for the Atlanta-based investors. If you look at the success rate of studios built in areas dependent on large incentives to lure productions, the success rate is horrible. Even Albuquerque Studios in New Mexico has spend most of its existence in bankruptcy. Santa Fe Studios is in trouble. In Michigan, Raleighs Pontiac Studios has been one of the most tragic studio failures and is costing the state millions as it continues to default on bond repayments.
Pinewood Georgia's stages will depend on the ongoing existence of the massive incentive to keep its stages booked. Spending millions on a huge venture when the ultimate success hinges on indefinite public support via the incentive is exactly the most prudent investment. Has the constant bubble crisis taught us nothing? The housing bubble has scary parallels to the current film incentive bubble. After Pontiac's collapse, Raleigh decided to start pulling out of the studio game. And worth noting is the fact that the big six studios themselves haven't thought it prudent to build a single state in a single state outside of California. Disney, Paramount and Universal have all begun massive expansions in Southern California. How, exactly, is Georgia going to win this fight you mention?
Finally, you have failed to address many of my key questions: The problem with the film credit is the plan ahead. How long does it need to be offered? When, if ever, will a sustainable industry exist capable of standing on its own two feet? Since New York, Toronto, BC and now even California are forced to offer incentives to retain production, what makes anyone think they will ever have a self-sustaining industry?? California had 100 years and is home to every major studio, yet they still need to offer a tax credit to keep production in the state.
The laggard Georgia school rankings and test score aren't due to funding levels. Frequently, schools that spend the most have the worst results, and, as in the case of New Hampshire, schools that spend relatively little have outstanding results.
The drop in higher education funding here was because of the precipitous drop in state revenue due to the financial meltdowns felt nationally, globally even. It had nothing to do with bad movies being lured to shoot in Georgia. There was also a drop in every state budget in every department. It is misleading to point to school children and say Ron Burgundy is eating their lunch.
You can't pick and choose which movies come to shoot here. You may not like Anchorman 2, but the caterer's check will clear just as fast as the check for the caterer on the Flight set. And the good will for the state isn't all from a positive image of the state in the picture. A lot of it is from the lips of the people affected, the folks who come here to work on the pictures. Word of mouth is slower than a picture of Savannah but it's pure gold as well.
"If Georgia turns into the new Hollywood, so be it. But competition should be based on the skill and quality of the workforce and the local industry, not a government tax subsidy."
Wishing that things were as they should be can make you crazy. It's a dog eat dog world and you have to fight for everything you get. The fact that an industry "on wheels" is making with the brick and mortar...Pinewood Studios and others...means that we are winning that fight. The word subsidy does make me cringe. But I still say a tax credit is not a true subsidy and that by forgoing potential revenue, Georgia receives a wide range of rewards that more than make up for it.
Sorry if you think I am being negative. It's not my intent. I am just being realistic. And I agree with pretty much everything your last comment mentioned. Yes, it is a great stimulus that means lots of money spent in a pretty quick amount of time that means lots of jobs for lots of people and lots of spending at lots of vendors. That said, Georgia could get the same benefit if it gave a 30% credit to money tourists spend. Better yet, give a 30% credit to any person or company doing large capital expenditures, like a hospital building a new wing...whatever. The stimulus effect can come from almost any sector, not just production spending.
The problem with the film credit is the plan ahead. How long does it need to be offered? When, if ever, will a sustainable industry exist capable of standing on its own two feet? Since New York, Toronto, BC and now even California are forced to offer incentives to retain production, what makes anyone think they will ever have a self-sustaining industry?? California had 100 years and is home to every major studio, yet they still need to offer a tax credit to keep production in the state. Is investing such a huge amount of money to an industry that is on wheels really something that makes sense? If the state spent the $200 million to build infrastructure, at least it would have something durable that can benefit residents for years to come, like new roads--whatever. Hell, how about using state funds to build a studio owned by the state. Hire a group like Pinewood to manage it and split the revenue. And while we are at it, how about a stipulation that Georgia gets a share of profits (should there be any)?
From a national perspective, the US isn't gaining any new net jobs. The jobs created in Georgia means jobs lost in California or someplace else. Almost every state is competing just to move these jobs around the map. About 10 years ago, the main problem was Canada (and they are still a problem). Now the problem is the US fighting itself. I often argue for a single federal film credit that would supersede the state incentives. Let's level the domestic playing field with a single incentive, compete on the global level rather than with each other and let the chips fall where they may. If Georgia turns into the new Hollywood, so be it. But competition should be based on the skill and quality of the workforce and the local industry, not a government tax subsidy.
And Walking Dead rules, BTW. Set in Georgia. Filmed in Georgia. If the state is going to benefit from film tourism, then more projects should be encouraged to change the setting. Crap like Last Vegas, Anchorman 2 or Footloose isn't going to draw tourists. With Last Vegas, Georgia effectively paid out millions for tourism campaign for Nevada. Silly. As for the Georgia logo, move that sucker up front. If Georgia is covering a third of costs, then it deserves to have it's logo up front with the other producers. The vast majority of audiences never see a logo buried at the end of credits.
Does Georgia have a slight surplus this year? Yes. And that's great. But it didn't have one in many recent years while it was offering its film incentive. During the same time Georgia was paying for movies and TV shows, spending on higher education went from over $11,000 per-student to under $5,000. Adding insult to injury, in order to cope with the budget cuts, tuition is up over 60-70% at the state's major universities just since 2008! Pre-K-12th grade funding has been cut every single year since 2002, totaling cuts of over $4 billion. The Pre-K program has suffered cuts and, even now, there is a waiting list of 8,000 children. And these cuts are just the tip of the iceberg.
In my view, taxpayer money should be used on things like the Pre-K program, not subsidizing the salary Jennifer Lawrence is getting for the latest Hunger Games movie. Is it any wonder why Georgia ranks 40th for middle school math? It's a matter of priorities and, in my opinion, they are out of whack.
Nice article & subsequent discussion. I can't believe I just saw it!
Personally I'm cool with the 20% tax credit incentive for those producing films in GA. But I don't understand handing out an extra 10% just for including the GA logo in the credits. That requirement should be part of the 20%. That's a LOT of money that GA is losing for no good reason. Let's not sell GA short here. The state has every kind of environment desirable to major film studios: big city, swamp, woods, mountains, beaches. And let's not forget the biggest plus for Hollywood: discounted labor. Giant studios with sets are here and more are being built. Hollywood wants us, maybe even needs us. The tax incentives need to stop at 20%.
Re: photo on page 5: Is that Jake "the snake" Roberts?
Good arguments. Not buying...but good arguments.
OK. For the sake of good argument, let's say you tax hounds are right and it IS costing sweet, merciful, bountiful, beautiful Georgia real money, not potential money like I say but real money.
What it boils down to is that the state is cutting taxes to stimulate growth, a proven tactic to improve and stimulate economic activity...a tactic that isn't foolproof or guaranteed, but which sometimes works great. I submit it is working great here. Narrowly focused on one industry, yes, but the stimulative effect spreads out. You can't get over the production company flying high and free like a marauder but what about the truck rental place, what about Bones and a hundred other pricey hash joints, what about the laid off carpenter suddenly building sets, the lumber yard that sends him wood? On and on it goes and these are real Georgia workers and real Georgia companies who, a couple of years ago, were not making much money and not paying many taxes who suddenly are. Even if this burst of tax revenue from locals doesn't equal the real money you say it's costing the state, the money they are making that they weren't before damn sure is a godsend to them, and it's not a narrow little clique in one industry. It's not just grips and make up artists, it's dishwashers and clerks....and Kroger and Williams Bros. and paint stores and furniture rental stores...all paying Georgia taxes.
And this is still unanswered by you Negatonians. When Georgia adopted the tax credit, the economy was stinko. Like everyone, we were recovering from the late unpleasantness. The latest news from the Peach State taxman is that revenues are up and there is a nice surplus. No, I'm not saying The walking Dead, etc. is why, but isn't it obvious that this program isn't hurting the state economically? Would you rather have a little more in the state kitty for the goobers in the legislature to screw up or would you rather the clerks and the Kroger, and yes, the grips, Goddess bless 'em, to have it? Can you at least admit that over the life of the program, state revenues have increased and the state is doing OK, for whatever reason? If it's not hurting the state, why are your panties in such a wad?
And you totally ignore the intangibles of good will and PR for the state. Not readily measurable but it's there. If there were nothing to it, PR as an industry wouldn't exist and good will wouldn't be something in contracts.
The skeptical writer of the article, who went through all the negatives, said it well at the end of the piece: "It's hard to argue that the credit isn't working in Georgia's favor."
If Georgia cut a $30 million check to the movie, that would be a payout, right? Hopefully we can agree on that.
But that sounds bad, doesn't it? A $30 million check to help pay for 30% of the cost on a movie like Hunger Games 2 doesn't sound like wise use of public funds. A direct cash payment to help pay for movies and shows, like Honey Boo Boo, isn't a great idea. But how about getting that $30 million to the movie more indirectly? Sounds great! Just give $30 million in "tax credits" to the production and allow these credits to be sold for 80-95 cents on the dollar to those in Georgia that do pay taxes. They pay the cash to the production and then get to use the "tax credits" instead of having to pay the same fair share that every other person and business in Georgia has to pay.
How much are we giving and to who? We don't know.
How much are they spending, who are they hiring and where are they from? We don't know.
Who is buying all these credits to get a break state taxes that everyone else must still pay? We don't know.
Wouldn't it be better to just lower taxes for, I don't know, everyone?? We don't know (but yes).
BTW--I loved the "Yo Adrian" comment. I have never heard that before. :)
A Georgia State Expenditure in the amount of $1 to pay for a road has the same exact fiscal impact as Georgia State Expenditure in the amount of a $1 tax credit that means it will not collect $1 in revenue. From a basic fiscal accounting perspective, the is literally no difference. At the end of the day, Georgia is out $1.
Now, are tax collections the state's money? Yes. Citizens pay taxes required of them by law. The money spent by Georgia on things like healthcare or education or roads or on stat police doe not belong, per se, to the government. It belongs to the taxpayers. If the production comapnies that got the subsidy actually owed income taxes in Georgia, then I would agree with you. Indeed, they would be getting to keep more of their own money rather than pay in taxes due. But they not pay or owe corporate income taxes in Georgia. Let me repeat, productions do not pay income taxes in Georgia. If they did, the tax credits would operate like most people assume they do--they would allow the recipient to use them instead of paying money to the state. But since the productions, 99.9% of the time, do not owe a cent, they sell them. This is why they are transferable.
Georgia isn't collecting "less" of "their" money. It's not collecting anything from them. At all. Instead, Georgia issues tax credits for 30% of their spending and those credits are sold for CA$H to very very rich people or companies at a slight discount. Typically, a $1 film tax credit goes for 90-cents. The person or entity that buys the credit pays 90-cents to the film company so it can save 10% on it's own taxes due.
To the average person on the street, most people want to know why these fat cats get a tax break and everyone else doesn't. Even if the vastly inflated number of 25,000 direct and indirect jobs tied to the film industry are accurate (they aren't), then it's still less than 1% of the state's population. The film incentive isn't bringing "massive benefits" to the citizens of Georgia....it's bringing job dependent on a taxpayer subsidy to these 25,000 workers. They benefit. Everyone else is paying for it.
If the people in the film industry (and the indirect positions tied to it) want to keep the subsidy, then perhaps they should agree to a 30% state income tax rate. At least that way Georgia will be breaking even on their subsidized wages.
I'll put it another way. What's the difference if you don't collect the money from a Buckhead fat cat instead of not collecting it from a LA fat cat?
"roughly $30 million was already the state's money."
See, this is the basic problem, one of outlook or point of view. It's not the state's money. It's the money of the person or entity who purchased the credit. In your view, I guess, all money belongs to the government, and they let us keep our share of it and take the rest. The way I look at it, the money we make is ours and the the taxes are the government's money only after we give it to them.
"each $1 credit paid out"
There you go again. It's not a payout.
I agree that it's difficult to determine whether the state is seeing more tax revenue from new business activity than it is forgoing in full taxation of said activity, but the fact remains that it is new revenue that would not have been there, anyway, absent the tax credits. Even if I grant your erroneous assumption of the way government works, the massive benefits to citizens and businesses still remain. Slight detriment to the state trumps great benefits to the citizen...every time. Yeah, if you want to call not taking a dollar spending a dollar, a la the Louisiana studies, then, yes, there is no way ANY tax credit program would EVER be worth it.
I'm sure that's the view that a lot of statists want to prevail, but it ignores the facts that they find inconvenient, and it ignores the success of such programs. It will forever be, "Yeah, well, that's great but the state lost money."
Also you can not deny that, over the period of this program, state tax revenue has been increasing, from whatever source and for whatever reason, so it is most definitely is not hurting the state. Is it that you just can't sleep at night knowing that some potential tax dollar goes uncollected?
"How dense are you? I noted another form of state activity for an industry."
No, you threw that non sequitur at me because you could not defend your assertion. At least this other guy has some structure and logic to his erroneous assertions.
"I have no idea what that "sentence" means."
I'm not surprised. "All you base are belong to us..." is a widely known internet meme known by anyone who is plugged in to what's happenin.' Try googling it. Hint: it's a way to make fun of people who use poor grammar and syntax.
"YOU said it."
How dense are you? I noted another form of state activity for an industry.
"All your base are belong to us...."
I have no idea what that "sentence" means.
I do not deny the economic activity from film spending. Clearly, if a $100 million movie comes to town, then it spends that huge amount of money at lots of places and hires lots of people. And all of that is great. Not so great, however, is the fact that you had to give up (fine, not spend) $30 million in tax revenue that you would have otherwise collected.
And since the $30 million in tax credits, which the production converts to cash by selling them, is used to pay for the cost of the film, that really means that of the $100 million spent, roughly $30 million was already the state's money.
Some would say, "so what. we still had $70 million in impact". True. But in order for the program to pay for itself (much less make money), that $70 million in private economy spending would need to generate $30 million in new taxes. And that is mathematically impossible.
Louisiana has a 30% rate. Unlike Georgia, they have commissioned no less than five economic impact studies. All of the reports (which look at direct spending AND indirect impacts) show the state only recoups about 18-cents for each $1 credit paid out. Louisiana sees it as an investment. They KNOW they lose money on this. But they are ok with that. Georgia film backers should take the same approach.
Jobs Yes. Spending Yes. Making money for taxpayers NO.
You are neglecting the economic activity that results from the productions that come to the state...and even with your dour angle on it, the state does not expend resources. They are foregoing a portion of as yet uncollected monies...all with a purpose in mind, to attract new business that brings a host of benefits.
All of these criticisms hinge on the twisted view that not collecting a buck means that you spent a buck...and that the three bucks spent by the guy, from whom you didn't collect it, doesn't count.
Since the state has posted a big surplus in tax revenues recently, it's obvious that this program isn't hurting the state. Surely you can admit that, even if you won't recognize the benefit.
The 70% of something is better than 100% of nothing logic sounds great, but it's fundamentally flawed.
Many people think that a production company that goes, for example, to Georgia to make a film is getting a reduction on its taxes of 30%. To the misinformed film backer, the state is still getting the other 70% of the new company’s taxes that would not have come to Georgia in the absence of the film incentive. If this were actually how the film incentive worked, the “70% of something is better than 100% of nothing” talking point would have merit. But this is NOT how film incentives work. Film incentives represent cash, directly (from refundable tax credits) or indirectly (from transferable tax credits) that production companies use to finance their project.
So when $200 million in tax credits are purchased by wealthy Georgians or resident corporations, they use the credits to satisfy their taxes rather than sending actual money. Result: Georgia is OUT $200 million in revenue that it would have collected but for the film subsidy. This is a huge cost.
"Seriously? "the KIA deal has nothing do with the tax credit" No shit. Who said it did?"
"It's not just a matter of cutting checks to film production companies. We (GA) gave away our soul for Kia and also PAID for infrastructure"
YOU said it.
" I didn't even have waste my time reading any further with that statement nor will I."
All your base are belong to us....
Seriously? "the KIA deal has nothing do with the tax credit"
No shit. Who said it did? That was the final nail for me with that sentence that you are either more uninformed than I thought or worse.... I didn't even have waste my time reading any further with that statement nor will I.
Reread my statements until you understand them.
"Good FOR my state"...it should say.
As someone who works in the business, and has been here before the tax incentive, I promise you, this business is bigger than anyone can grasp. Thousands of people have jobs. Thousands of local vendors are benefiting (dozens that RELY on this industry.) In my department alone (with one of the smaller budgets in a production,) I am spending a minimum of 1 million dollars, with about 60% of that going to LOCAL labor. In three months. IN ONE SHOW. The show that I am on now is about 15 times bigger than the ones before. That is over $10 million dollars in local wages, on ONE show. We can sit here and argue economics all day, but I will take 70% over NOTHING. These out of state people that come in pay taxes and spend money the ENTIRE time they are here. From tourist attractions, to housing, to meals three times a day. Who cares if these million dollar companies are getting a tax break? I can give you thousands of names of people who are benefiting also! And PLEASE remember, the current deficit and issues with this state have nothing to do with the fact that we are making Georgia more appealing. It is only going to help this state. Every show I have worked on, and spoken to out of town people in this business all say the same thing....they've seen incentives before, but it has never been done right, and Georgia is on it's way to doing it right! We NEED this business to stay.
Creative Loafing Atlanta
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