Tax Breaks For Filmmaking: Not Enough

Louisiana was one of the first states to enact tax breaks as an incentive for filmmakers to shoot on location in the state. But as the Baton Rouge Advocate's editorial board points out, they're now just one of dozens of states offering such incentives--and this is illustrating just how limited the real economic impact of tax incentives proves to be.

In particular, according to the Advocate, filmmakers are saying that the real problem with locating in Louisiana is not tax considerations-- it's the difficulty of finding trained film-making professionals to hire. Solving this problem is harder than just shelling out tax breaks, says the Advocate:

The development and training of personnel is something the state can encourage through community colleges and state universities, but it is tough work — harder and a longer-term commitment than simply giving tax credits to Hollywood studios.

It's often impossible to know whether a given business tax incentive is actually affecting companies' behavior, or whether they're just taking money for something they would have done anyway. But one thing we can be clear on is that these tax breaks aren't creating a smarter, better-trained workforce. In fact, to the extent that tax breaks deplete education funding, they're making it harder to build the educated workforce that ultimately could make Louisiana a more attractive location for businesses. And as the Advocate reminds us, any company that would be actually swayed by corporate tax incentives probably doesn't have much of a business plan to begin with:

To be called “economic development,” a business can’t be based on tax breaks. It has to have solid underlying fundamentals.

Amen to that.