In fiscal 2007, Louisiana paid $106 million to film producers and got back what Albrecht estimates was $15 million in added tax revenue. Net cost to taxpayers: $91 million that could have been spent on schools, roads and health care.
Proponents of Hollywood handouts don't want to hear this.
They note a study purporting to estimate that for every dollar New Mexico gave movie producers, that state got $1.50 back in tax revenue. Any economist not being paid to produce one of these things can tell you how questionable those figures are. Relying on huge, unverifiable assumptions, the New Mexico study was commissioned by the state film office, not exactly a disinterested party.
But Maryland's incentives would be "post-expenditure" rebates paid to filmmakers. The state won't give them a penny until the money comes into the economy via moviemaking expenses. And the rebates aren't even listed as an expense on next fiscal year's state budget!
As if they weren't real money being taken from taxpayers and given to private enterprise. Rebates aren't on the budget because they're a contingent expenditure. To repeat: Under this proposal the state would pay studios directly. Little of the money moviemakers spend would end up with Comptroller Peter Franchot. It's a net cost to the state of potentially tens of millions a year as it faces a budget shortfall of $2 billion.
Why 28 percent? Why not 50 percent? Why not cover the full cost if filmmaking in Maryland is so great? Supporters can't say. All they know is that 28 percent is competitive with what's being offered by Connecticut, Michigan, Louisiana and other places.
At least for now.
"Everybody's throwing money at this industry," says Albrecht. "Other states keep upping the ante. I'm sure I'll have proposals to sweeten our deal" from this year's Louisiana Legislature.
A few years ago, Maryland and Baltimore County stretched to come up with $10 million to get General Motors to build a clean, green transmission plant in White Marsh. Hundreds of permanent jobs. Over $400 million in capital investment.
The film industry would have you believe that spending potentially several times that amount, year after year, for jobs lasting a few months, is a great investment for Maryland. Even Hollywood accountants, famous for torturing the books into saying strange things, would have a hard time making that one work.
Thanks, General Assembly, but I'd like to confine my support for the movies to the $8 matinee at the Columbia AMC theaters.
