Does the “Scene in San Francisco” program work? I’m sure it does for some people, but does it succeed overall, you know, for the Commonweal?
It’s the same deal with the CA state film subsidy program, which was recently looked at by the CA State Legislative Analyst’s Office.
Did San Francisco subsidize the horrible NBC non-hit show Trauma? Yes. Should it have? No.
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All the deets:
We have discussed five issues that could affect the results of the LAEDC and/or UCLA-IRLE studies:
Unknown assumptions embedded in the LAEDC economic models and their failure to consider the benefits of alternative public or private uses of tax credit funds (which could result in the credit program having significantly less net benefit than shown in the studies).
In-state film activity that would occur in California without any tax credit (which results in the credit program having less economic and tax net benefits than shown in the LAEDC study).
In-state economic and employment activity resulting from out-of-state productions (which results in the credit program having less net benefit than shown in the studies).
Crowding out effects (which result in the credit program having less net benefit than shown in the studies in at least some years).
Effects of film-related tourism (which would likely not result in significant changes in net benefits in most years).
While the total effects of these issues are impossible to quantify, their combined effects are likely to be negative in any given fiscal year—that is, resulting in the net benefit of the credit program being less than shown in both the LAEDC and UCLA-IRLE studies.
Given the conclusion that the net benefit of the credit program is likely less than shown in the LAEDC study, the LAEDC’s finding that the output-to-credit ratio was about 20-to-1 is likely overstated, as is its estimate of job gains resulting from the credit program. Moreover, given that UCLA-IRLE adjusted downward to $1.04 the projected state and local tax revenue return from every credit dollar and given that we find that this also was overstated, we believe it is likely that the state and local tax revenue return would be under $1.00 for every tax credit dollar—perhaps well under $1.00 for every tax credit dollar in many years.
In any event, even if the combined state and local tax revenue return is right around $1.00 for every tax credit dollar, the state government’s tax revenue return would by definition be less than $1.00 for every tax credit dollar. The credit program, therefore, appears to result in a net decline in state revenues.”
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