Gov. Kate Brown (D) approved a bill increasing Oregon’s subsidies for film companies operating in the state, expanding the annual budget of the state government’s tax-credit program from $10 million to $14 million.
The bill, signed into law in March, increases funding for the Oregon Production Investment Fund, a taxpayer-funded economic incentive program benefitting media companies filming popular television shows such as Grimm and Portlandia in the state.
‘Amounts to Corporate Welfare’
Steve Buckstein, senior policy analyst for the Cascade Policy Institute, says subsidizing Hollywood studios to film in Oregon is not what taxpayers fund the government to do on their behalf.
“Even if the tax-credit program were to generate enough tax revenue to offset costs, it still amounts to corporate welfare, which is not a proper function of government,” Buckstein said.
Cutting Out the Middleman
Buckstein says the film-tax-credit program benefits individuals who don’t need a helping hand from government.
“These tax credits are actually purchased by high-income individual Oregonians at a discount of 5–10 percent, which they use to offset their Oregon income tax liability,” Buckstein said. “If supporting the film industry is so important, the state should do it directly and save that 5–10 percent, rather than enrich already rich people.”
Digging ‘Holes in the Ground’
Matthew Mitchell, a senior research fellow at the Mercatus Center, says the logic behind film-tax-credit programs is full of holes.
“You could pay half the people to dig holes in the ground and pay the other half of the people to fill them,” Mitchell said. “Those jobs aren’t doing anyone any good; they’re not providing value to customers. You could at least build a philosophical case for privileging a really disadvantaged person, but it’s harder to build the case for privileging George Clooney.”
Mitchell says state lawmakers should craft tax policies benefitting all taxpayers, not just out-of-state movie companies.
“We don’t want to target privileged firms, but [we do want to] create a better overall environment that’s neither discriminatory nor puts policymakers in the position of picking winners and losers,” Mitchell said. “Consumers need to pick winners and losers.”
Jenni White ([email protected]) writes from Oklahoma City, Oklahoma.
Robert Tannenwald, “State Film Subsidies: Not Much Bang for too Many Bucks,” Center on Budget and Policy Priorities, November 17, 2010: https://heartland.org/policy-documents/state-film-subsidies-not-much-bang-too-many-bucks/