On July 27, Kathy Bergen of the the Chicago Tribune wrote an excellent article about the Illinois film incentive and the efficacy of film incentives generally. Bergen spent time talking to academics (including Susan Christopherson, who is a friend of this site) and other experts who have been critical of film incentives generally:
One researcher who questions the value of the escalating incentives war calls the dynamic, “sexy meets desperate.” Others call it a potential “race to the bottom,” where too much of the economic benefit is given back.
“You can have a project set for Savannah, and if Charleston offers a higher subsidy, (the producers) will pack their trucks and move in a day,” said film incentives researcher Susan Christopherson, a professor at Cornell University. “They are looking for film finance; they are not looking for an alternative Hollywood East.”
Is Illinois getting bang for its buck? In three years, from 2005 to 2008, the state paid out almost $40 million under the film incentive to projects that “generated more than $470 million in spending”:
Filmmakers spent $155 million in the state in 2007, the peak year, up from $25 million in 2003, the year before the incentive program started, according to data from Chicago’s film office. An equivalent of 4,262 full-time jobs were created by various projects in 2007, when projects included a Batman film, “The Dark Knight,” which spent $35.6 million on everything from car rental and catering to carpenters and security.
Other than “The Dark Knight,” Chicago played host to filming for “Transformers 3″, which one producer said would likely have chosen to shoot in Illinois with or without the incentive:
Ian Bryce, one of the producers of the “Transformers 3″ sci-fi action film, painted a softer picture, saying the film likely would have come here without the incentive because of the skyline, the architecture and the skilled crews here, among other factors. “You never know,” he said. “But it’s kind of moot; we knew we were going to get a rebate.”
I am inclined to believe they would have shot in Chicago regardless of the film incentive, seeing as they were also shooting in Wisconsin (which has no incentive) and shot in Egypt (also sans incentive) for “Transformers 2″. Nevertheless, “Transformers 3″ did qualify for a likely $6 million credit for roughly $20 million worth of Illinois shooting. Not a bad deal for the robots.
Not a bad deal for the robots, but what about the state? Again, Bergen gave voice to incentive critics, including Christopherson, who had my favorite quote in the article (its highlighted):
Still, a number of researchers say the costs associated with luring filmmakers to locales are significant and growing. There are the hard costs: Potential tax money that never makes it to strained state coffers. And there are the less tangible costs: Could this money have been spent in more economically productive ways, perhaps on education or social services, or on industries that produce more permanent jobs?
Some observers say such costs often are overlooked in policy discussions because the high visibility of the film-subsidy programs are so appealing to politicians.
“They can say, ‘Look, we’re bringing “Transformers 3,” or outside our windows, there’s “The Dark Knight,”‘” said John Nothdurft, a budget and tax legislation specialist at the Heartland Institute, a free-market research organization. “It’s something the government subsidizes that everyday people can see.”
“I’m sympathetic to the need to create jobs, but these are not a good investment 90 percent of the time,” said Christopherson, of Cornell. “The problem is, this creates work, it doesn’t create jobs.”
To read the entire article, click HERE.
