Tuesday, March 24, 2009

Quotes of the Day (on the Necessity—or Lack of Same—for Film Tax Incentives)

“If this tax incentive disappears, so will New York City productions. Without state action to support this much-needed tax relief, many shows and movies, especially independent films, will consider locations outside New York.” -- Bill De Blasio and Steve Buscemi, “The State Needs to Protect New York's Marquee Value,” The New York Daily News, March 20, 2009

“Our interviews with film industry executives and state officials suggest that political dynamics which characterize interstate incentive competition for film production shoots are more than likely to intensify. This view parallels research undertaken on the topic of business location and tax incentives, in spite of the belief that the cumulative effects of such incentive benefits are open to question and frequently doubtful.”--Isaiah A. Litvak and Marilyn M. Litvak, “Economic Development and U.S. State Film Incentives,” Economic Development Journal (Vol. 8, No. 1), Winter 2009

The Daily News has more readers, by several orders of magnitude, than Economic Development Journal, a quarterly publication of the nonprofit organization International Economic Development Council, a group with a mere 4,500 members. Nevertheless, the Litvaks’ analysis of the effectiveness of state film tax incentives deserves to reach a readership as wide as that of the op-ed by DeBlasio and Buscemi (respectively, a New York City councilman representing Brooklyn and the actor-director perhaps best known as The Sopranos’ Tony Blundetto).

In fact, DeBlasio and Buscemi’s argument inadvertently ratifies the Litvaks': i.e., that film execs and lobbyists are playing state governments like an orchestra of virtuosi. That argument boils down to this: If we don’t get that tax incentive, we’ll shoot in Vancouver.

God knows that New York is not the most industry-friendly environment among the states. Nevertheless, to these ears, anyway, the film industry is sounding an awful lot like George Steinbrenner and other sports executives over the years who have continually made noises about relocating their franchises to other, presumably more attractive locales—often after state taxpayers have already given them sweetheart deals on stadiums they built, oh, only 20 years before.

In a time of rapidly massive government deficits, state officials are going to have to look very skeptically at the whole notion of tax incentives for film and other industries. Maybe the advocates are right, but they’re going to have to work much, much harder to prove it. Those deficit shortfalls loom larger than ever, and the American taxpayer will have many more questions about the best way for them to be made up.

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