Today in film tax credits

created six thousand jobsIt never ends: production companies asking for, and getting, tax credits for local production when the economic case is cloudy, to say the least. The Washington Post reports:

A few weeks before Season 2 of “House of Cards” debuted online, the show’s production company sent Maryland Gov. Martin O’Malley a letter with this warning: Give us millions more dollars in tax credits, or we will “break down our stage, sets and offices and set up in another state.” …

Both seasons of “House of Cards” were filmed in Maryland, mostly in Baltimore and Harford County, although the House chamber in Annapolis was used as a set.

In addition to bringing a burst of buzz and excitement, the show created nearly 6,000 jobs and pumped more than $250 million into the state economy, economic development officials say.

In May, O’Malley (D) visited the set to promote film tax credits, exulting that Maryland was becoming “the premier destination in America for film production.”

Sure it is.

After each season, Maryland has reimbursed Media Rights Capital, the show’s California-based production company, for a chunk of production expenses. For the first season, that totaled more than $11 million in tax credits. For the second season, reimbursements could reach $15 million.

Maryland economic development officials wanted to promise “House of Cards” another $15 million in credits for the third season, which was supposed to start filming in early spring.

But lawmakers have not agreed to boost the $7.5 million in tax credits the state allocates annually for film and television projects. Two bills that would increase the ceiling — to $11 million or $18.5 million — are in committee. House leaders say some increase is likely, but whether it will be enough to keep the show in town is unclear.

Two questions.

First, if these production credits are a boon to the state’s economy, why put a ceiling on the amount of the credits? Why not make it unlimited, and let the state become fabulously wealthy? But we know the answer: film tax credits help the production companies who lobby for them, but we have scant evidence that the state as a whole benefits.

Second, where do they get those economic impact numbers? imdb.com says the budget for Season 1 of House of Cards was $60 million (films have been made in Maryland for 1/1000th that cost, and have done rather well). Yet somehow this has an “economic impact” of $75 million, or, on another day, another estimate, $140 million. Mind you, the show has created 2,000 jobs. Or maybe 6,000. Or … who knows?

Film tax credits are not arts policy, they are industrial policy. And they are bad industrial policy – chasing klieg lights makes no more sense than the policy of states’ chasing smokestacks in the previous century. Yet states continue to fall for the idea that somehow this all amounts to strategic economic development.

Update: from Alyssa Rosenberg.

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