Report: Film tax credits not a good investment

The Center on Budget and Policy Priorities released a report stating that film subsidies "benefit mostly non-residents, especially well-paid non-resident film and TV professionals. Some residents benefit from these subsidies, but most end up paying for them in the form of fewer services — such as education, health care, and police and fire protection — or higher taxes elsewhere."

The major contentions of the report are:

• State film subsidies are costly to states and generous to movie producers.
• Subsidies reward companies for production that they might have done anyway.
• The best jobs go to non-residents.
• Subsidies don’t pay for themselves .
• No state can “win” the film subsidy war .
• Supporters of subsidies rely on flawed studies. 

Here is their explanation on how Ohio's "refundable film tax credit" works:

"If a producer lacks sufficient tax liability to use all of a refundable film tax credit, the state pays the producer the whole credit anyway, in effect giving the producer an outright cash grant. For example, suppose that a producer is awarded a film tax credit of $100,000 but has a pre-credit tax liability of only $50,000. A non-refundable credit would reduce the producer’s tax liability to $0 but leave it with $50,000 in unusable credits. If the tax credit is refundable, the state pays the producer $100,000, including the $50,000 in credits it otherwise could not use."

Jeremy Henthorn, the Director of the Ohio Film Office disagreed with the findings of this study.

“Our intent to is create an infrastructure (for film-making),” Henthorn said, “and not simply bring in films for six weeks.”