Our Views: Legislators need to arrive at a cap number to reduce cost of subsidies program
The reviews are coming in, and it’s not at all clear that the film industry’s idea of austerity will play very well in the State Capitol this year.
And there is good reason for skepticism. The cost of the subsidies to Hollywood have climbed from $40 million to $251 million in a decade. So supporters of a so-called reform bill deserve an Oscar for saying, with a straight face, that they’re doing a favor for Louisiana taxpayers by capping the cost of the program at $300 million for next year.
The good news is that, while the legislative language is not yet clear, there is an appropriate intent to ensure that state government has the unambiguous authority to audit the moviemakers’ books.
The program has been tainted by fraud, but we note that those misdeeds don’t reflect the majority of studios or companies. Still, it’s something the Legislature should tighten up.
Inspector General Steven Street said his office has uncovered three main types of wrongdoing: false statements that inflate expense reports, related parties moving money back and forth and calling it expenses; and defrauding unsuspecting investors who buy tax credits.
Street also suggested that the Legislature consider some sort of process to ensure that those found to have committed fraud can lose their contracts and keep them from applying for future credits.
These are good ideas, but the main event is the money — and there several critics of the industry don’t see as much progress.
Jan Moller, director of the left-leaning Louisiana Budget Project, praised various aspects of the proposed legislation but called the proposed annual $300 million cap, “laughable.”
“That doesn’t come close to controlling the cost, which is the real problem with this program — what it’s costing the state,” Moller said.
Capping the program’s annual cost makes sense. Right now, the subsidies are unlimited, which explains how the program grew by more than 500 percent. But legislators should demand that the cap number reduce the cost of the program, not expand it, especially since every dollar added to the film subsidies subtracts from state aid to higher education and medical care for the poor.
We like the film industry in Louisiana. We think that a lot of smaller businesses have benefited from providing the services needed for filming.
Any state incentive, though, cannot be a permanent subsidy.
Once upon a time, this big tax credit was sold as a way to jump-start filming, so that studios and actors and all the myriad services would be developed in Louisiana, so that the film production would be self-supporting on its own economic basis.
We’ve got the talent, the scenery, the facilities — but after more than a decade of government aid, supporters of the industry say the notion of getting on without subsidies is a fantasy from a galaxy far far away.
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