Wisconsin Film Tax Credit Program: That’s A Wrap?
The Milwaukee Business Journal reports on the results of the Wisconsin Commerce Department’s analysis of the Film Tax Credit Program:
Producers spent more than $18 million, but the department said most of that money went to out-of-state workers and for out-of-state services. Wisconsin’s real economic impact — money spent here, wages to Wisconsin employees and tax revenue from those wages — equated to $5 million. At that level of spending, the $4.6 million in tax credits nearly wipe out the fiscal benefits of the tax incentives program.
The study also said that the film industry in ineffective at creating new jobs. When used for out-of-state film productions like “Public Enemies,” Commerce said the film incentives are 75 percent less effective at generating jobs than other state programs and that each job created costs 20 times more than those created under other state programs. The department said the state’s most expensive program, Community Development Zone, spends $5.96 in incentives for every hour of employment created. For “Public Enemies,” the cost was $444.94 per hour of employment, according to Commerce.
To be sure, backers of the film incentives program have said that the “Public Enemies” project was atypical of the impact of the incentives legislation, but they also acknowledged that certain loopholes in the law should be addressed.
I think that it’s entirely worthwhile to support our burgeoning homegrown film industry, but if this report is correct then some adjustments should be made to the program to keep the tax credit applicable to in-state production costs. Film Wisconsin and The Chief call into question the Commerce Department’s figures. I can’t find the study online — why is it not mentioned on the Dept. of Commerce website and why in 2009 do newspapers still not provide an in-article link to studies? Is the program fundamentally flawed or were we simply hustled by some sharp city slickers? What do you think?