Issue 12 BIZ Film Locations Illustration - H 2014
Mark NerysThe state of Louisiana’s generous film/TV tax credit program supported 10,800 jobs in 2013, generating $471 million in personal income and $1.6 billion in economic output, according to a new report released Monday.
But Shuprotim Bhaumik, partner in HR&A Advisors of New York City, which conducted the study, said it was a wash in terms of how much the state got back as a result of the tax incentives. In other words, at best the state got back about a dollar for each dollar it spent.
The state spent $179 million on tax credits and issued new credits of $181 million. The amount of credits certified in 2013 (some from previous years) was $247 million.
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Bhaumik said that another study, which found the state got only 23-cents back for each dollar it spent, did not include important factors such as taxes paid by non-state residents and especially the impact of the industry on tourism.
According to Van Stevenson, senior vice president of the MPAA, that is why this new study went beyond similar prior studies in other states to also include the impact of tourism. Typically, when state legislatures look at the results of tax incentives, they do not include tourism.
The study by the Louisiana Film and Entertainment Association and the MPAA revealed that people who had watched shows like True Blood, NCIS New Orleans and Duck Dynasty, as well as older TV shows and movies including A Streetcar Named Desire, came to Louisiana specifically because the shows were filmed there. It found that 14.5 percent of visitors surveyed using an online sampling system (which is not scientific in the classic sense) came because they had watched a show set in the state.
The study found that tourism driven by movies and TV supported 22,700 jobs and generated $767 million in personal income and up to $2.4 billion in economic output statewide. That means overall, according to the study, movie and TV production supported as many as 33,520 jobs and generated almost $4 billion in economic impact.
Still, that means over 85 percent of tourism is not related to the film/TV industry.
The study also included information on the impact of upgrades to the state’s infrastructure — the building of studios and other facilities — and indicated that in 2012 and 2013 infrastructure projects supported another 160 jobs and generated $8.7 million in person income, which amounted to a $21.7 million impact on economic impact.
The program that provided incentives for building infrastructure ended in 2009, and so the on-going effect is less.
Since 2009, Louisiana has offered a 30 percent base tax credit on qualified in-state expenditures (covering both production costs and salaries of stars, directors and producers). An additional 5 percent tax credit is given for salaries to state residents up to $1 million in individual salary. There is no per project cap in Louisiana.
In 2013, 190 productions made use of tax credits. The state hit its high point in productions in 2010 when tax incentives were worth up to 40 percent of the spending in the state.
The study also looked at past economic impact studies and was highly critical of a study done by Loren Scott. It concluded that that study underestimated the impact of the production in the state because it was based on actual revenue received in that year and did not include taxes paid by non-residents or generated by people inspired by movies and TV shows.
The study said that since Louisiana became one of the first states to offer movie/TV incentives in 2002, production spending has grown to over $1 billion annually.
It said employment in the industry has grown from 868 jobs in 2002 to 6,029 jobs in 2013, an increase of 594 percent. When all related industries are factored in, the study indicates that movie/TV production (including digital) supported 10,800 jobs.
