CF Statement on Film Tax Credit Study: Flawed report gives lawmakers more reasons to eliminate program
NEWS RELEASE from the Commonwealth Foundation
Harrisburg, PA — Commonwealth Foundation President and CEO Matthew J. Brouillette issued the following statement today in response to a Legislative Budget and Finance Committee report on Pennsylvania’s Film Tax Credit program:
&quot;Just as the $5.7 million tax credit given to the Hollywood filmmakers of Zack & Miri Make a Porno was a bad investment, so too was the money spent on this shoddy report.
No serious economist would accept the assumption that every single producer receiving the tax credit would have filmed in another state but for a handout from hardworking Pennsylvanians. This flawed assumption contradicts, on one hand, the public admission by filmmakers themselves that they would have filmed in Pennsylvania with or without the tax credit, and, on the other hand, the fact that filmmakers were increasingly producing movies in Pennsylvania before the tax credit was successfully lobbied for by the now-indicted Rep. Mike Veon (see the attached chart from the study below).
Further, in suggesting that the Film Tax Credit ‘pays for itself,’ the study’s authors included not only the revenue from films receiving the credit, but that of the entire Pennsylvania film industry—the vast majority of which did not get the credit.
With such flawed assumptions and erroneous conclusions, it is no wonder that this report had to manufacture findings that run contrary to the evidence gathered by the Tax Foundation—an organization frequently cited by Gov. Rendell—which proves that film tax credits are revenue losers that fail to produce real economic development.
Most importantly, the study fails to consider what was lost by giving a tax credit only to the film industry—i.e. what would have occurred had Pennsylvania lowered taxes on all businesses, instead of earmarking tax credits for the politically connected.&quot;
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The Commonwealth Foundation (www.CommonwealthFoundation.org) is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.
CONTACT: Matthew J. Brouillette or Joe Sterns at 717.671.1901
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