Budget & Tax
Jonathan Small | May 3, 2021
Giving tax money to people who oppose your values
Here’s a simple thought experiment. Would you give your money to someone you know plans to use it to oppose everything you believe in—especially when you will get little or nothing in return?
That, in a nutshell, is what lawmakers are considering with a proposal to dramatically increase Hollywood film bailouts.
Oklahoma already provides $8 million in annual film subsidies. But a new proposal would ramp that up to at least $20 million, and perhaps as much as $50 million, per year.
What would the state get in return? Not much.
Expert evaluations consistently show film subsides do not generate lasting economic benefit. Consultants hired by the Oklahoma Incentive Evaluation Commission previously urged lawmakers to eliminate Oklahoma’s film tax credit. A 2016 study in the American Review of Public Administration reviewed the motion picture incentive programs of 40 states, including the use of transferable tax credits and refundable tax credits, and found neither credit “affected gross state product or motion picture industry concentration.” A 2019 study by Kennesaw State University found Georgia provided up to $119,000 in subsidies per full-time-equivalent job created.
Independent analysis shows the film subsidy produces just 13 cents for every Oklahoma tax dollar provided. Yet House lawmakers ignored reality last month, passing a bill to increase subsidies while declaring they will generate $17 for every $1 in subsidies. That’s 12,976% greater than what independent analysis demonstrated.
Those who benefit from film subsidies are among the individuals targeting states like Oklahoma where citizens support pro-life measures and election security. Actress and political activist Alyssa Milano even released a “State-by-State Guide to Abortion Rights for the Entertainment Industry” to encourage filmmakers to shoot productions in more abortion-friendly states than Oklahoma. In Georgia, film producers are using the threat of yanking productions out of that state to discourage efforts targeting voter fraud.
Making things worse, even as lawmakers consider the Hollywood bailout, they have yet to approve a truly worthwhile expansion of the state’s tax-credit scholarship program, which has allowed many low-income students to escape bad public schools for excellent private schools.
The scholarship program generates $1.39 for every dollar in tax credits issued. So lawmakers appear eager to dramatically increase Hollywood bailouts that generate a 13-cents return when they could reap $1.39 by instead boosting the scholarship program.
Oklahoma legislators often proclaim themselves conservatives and are now touting how they are “pushing back” against federal overreach. But the Hollywood bailout is effectively a funnel that siphons money out of Oklahoma taxpayers’ pockets and deposits it into the bank accounts of Biden donors.
To be a conservative, one’s actions must match one’s rhetoric. Based on how lawmakers vote on the Hollywood bailout, we’ll soon know who’s conservative and who’s pretending.
To take action on this issue, click here.
Jonathan Small, C.P.A., serves as President and joined the staff in December of 2010. Previously, Jonathan served as a budget analyst for the Oklahoma Office of State Finance, as a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department. Small’s work includes co-authoring “Economics 101” with Dr. Arthur Laffer and Dr. Wayne Winegarden, and his policy expertise has been referenced by The Oklahoman, the Tulsa World, National Review, the L.A. Times, The Hill, the Wall Street Journal and the Huffington Post. His weekly column “Free Market Friday” is published by the Journal Record and syndicated in 27 markets. A recipient of the American Legislative Exchange Council’s prestigious Private Sector Member of the Year award, Small is nationally recognized for his work to promote free markets, limited government and innovative public policy reforms. Jonathan holds a B.A. in Accounting from the University of Central Oklahoma and is a Certified Public Accountant.