Budget & Tax

Ray Carter | April 20, 2021

Bill would lavish state subsidies on Hollywood

Ray Carter

A newly filed House amendment would provide up to $50 million in annual state subsidies to Hollywood filmmakers at a time when many filmmakers are attacking election-security efforts in other states.

An amendment filed by state Rep. Scott Fetgatter, R-Okmulgee, creates the “Filmed In Oklahoma Act of 2021.” The legislation would provide up to $50 million in annual rebate payments to film productions shot, at least in part, in Oklahoma.

The bill would dramatically increase Oklahoma subsidies for entertainment productions from the $8 million provided under current law and comes at a time when filmmakers are trying to influence Georgia policymakers by threatening to yank productions out of that state.

In 2019, after the enactment of a Georgia law banning abortion after a heartbeat can be detected from an unborn child, numerous officials in the entertainment industry threatened to pull projects out of Georgia in retaliation, including officials with Netflix and Disney.

This year, some in the entertainment industry are making similar threats following the passage of a Georgia law that altered voting procedures. Critics claimed the law, which eliminated signature-matching as a form of verification for absentee voting and replaced it with a requirement for a form of voter ID, was too restrictive. Those attacks were lobbed even though the Georgia law provides more opportunity for absentee and early voting than what occurs in several other states, including New York.

Many reasons cited by entertainment officials for potentially moving productions out of Georgia also pertain to Oklahoma.

In December 2018, a report by the Guttmacher Institute, which supports abortion, declared Oklahoma to be one of 21 states that were “hostile or very hostile to abortion rights.”

In 2019, actress and political activist Alyssa Milano released a “State-by-State Guide to Abortion Rights for the Entertainment Industry,” declaring that “it has become apparent that those in our industry need to be able to make informed choices on where they will and will not work.”

That report encouraged filmmakers to shoot productions in more abortion-friendly states than Oklahoma that not only offer less generous subsidies than Oklahoma but, in some cases, provide no film subsidies.

Oklahoma’s voting processes are also not as expansive as those included in the new Georgia law. While the new Georgia law provides 17 days of early voting, Oklahoma’s early voting is limited to a handful of days, and Oklahoma lawmakers similarly voted last year to require that absentee voters include some form of identification with their mail-in ballots.

The push to dramatically increase Oklahoma subsidies for film productions is also in contrast with expert evaluation of the economic benefit of those subsidies, not just in Oklahoma but nationwide.

Consultants hired by Oklahoma Incentive Evaluation Commission have previously said film subsidies are not economically beneficial and urged lawmakers to eliminate Oklahoma’s film tax credit.

“There is no evidence that the Oklahoma film industry has strengthened during the time period when the rebate has been available,” the consultants’ evaluation stated. “Documented job creation is neither stable nor sustainable absent state support. The effect on Oklahoma’s image nationwide is unclear, but likely limited.”

A study published in 2016 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. “Neither credit affected gross state product or motion picture industry concentration,” the study found.

Even if Oklahoma provides $50 million in subsidies, that figure will still pale compared to Georgia’s subsidies, which have totaled around $800 million a year.

Efforts to boost film subsidies are occurring in Oklahoma even as efforts to increase the size of a tax-credit program that provides private-school scholarships to low-income children are currently stalled.

Yet prior analysis showed a much greater return on investment is generated by the scholarship tax-credit program than the film program. The Oklahoma Equal Opportunity Education Scholarship Act has produced a per-dollar return of $1.24, while the Oklahoma Film Enhancement Rebate Program produced a return of just 13 cents per dollar spent.

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Ray Carter Director, Center for Independent Journalism

Ray Carter

Director, Center for Independent Journalism

Ray Carter is the director of OCPA’s Center for Independent Journalism. He has two decades of experience in journalism and communications. He previously served as senior Capitol reporter for The Journal Record, media director for the Oklahoma House of Representatives, and chief editorial writer at The Oklahoman. As a reporter for The Journal Record, Carter received 12 Carl Rogan Awards in four years—including awards for investigative reporting, general news reporting, feature writing, spot news reporting, business reporting, and sports reporting. While at The Oklahoman, he was the recipient of several awards, including first place in the editorial writing category of the Associated Press/Oklahoma News Executives Carl Rogan Memorial News Excellence Competition for an editorial on the history of racism in the Oklahoma legislature.

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