GSU policy brief explores broad economic impact of Georgia’s film tax credits

Editor’s note: This story has been updated to remove an inaccurate reference to the average wage paid in Oregon.

By David Pendered

Georgia’s film tax credit program may be the grand slam Gov. Nathan Deal contends, but a new GSU report reveals caveats such as the average wage paid for film jobs in Georgia was the lowest average wage among the top 10 states.

Wages are but one factor in evaluating the success of any governmental program intended to spark economic development. So making too big a deal about comparatively low pay may be to miss the forest for the trees.

The breadth of the film industry’s economic impact is a matter of concern as state lawmakers consider religious liberty legislation. The legislation could prompt an exodus of the film industry, according to some in the industry, including Bark Bark founder Brian Tolleson.

That’s why the timing couldn’t be better for the policy brief issued Feb. 23 by Georgia State University’s Fiscal Policy Center, “A Description of the Film Tax Credit and Film Industry in Georgia.”

Without mentioning anything but film tax credits and resulting economic impact, the brief provides ample data on the breadth of Georgia’s film industry. As such, the brief paints an economic portrait of an industry the state has courted through tax policy, and is one that could feel unintended consequences of the religious freedom legislation. Not to mention some discussions at the Capitol to reduce or eliminate the program.

Start with cost and benefit.

Film tax credits have cost the state just over $925 million in utilized credits from 2009 though 2014, the brief states, citing data from the Georgia Department of Revenue.

The benefits reaped in just one year, the fiscal year that ended June 30, 2015, totaled $6 billion, the report states, citing a report from the Georgia Department of Economic Development.

Consider wages and jobs.

Georgia had 4,209 jobs that paid an average wage of $41,585 in 2014 in the film and video production industry. Total wages paid in 2014 in Georgia were $175 million. The GSU brief derived these figures by calculating data from the U.S. Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.

Of note, Deal cited figures that are dramatically different. The governor noted them during his remarks at the Georgia Chamber’s Eggs and Issues breakfast in January.

Citing data from the Motion Picture Association of America, Deal said Georgia has 79,000 jobs with an average salary of nearly $84,000. Total wages paid were roughly $4 billion, the governor said, according to his prepared remarks.

Then the governor laid down his ultimatum in the brewing discussion to reduce or eliminate film tax credits:

• “So let me state here and now that I am committed to protecting the film tax credits that make this type of blockbuster economic impact possible…. We have found an incentives structure that works. I see no need to alter or fix something that is not broken…. On the contrary, we should aim to enhance our benefit from this growing industry.”

GSU’s policy brief concludes on a note similar to the governor.

Further study is needed to determine the extent of the role film tax credits play in the growth of Georgia’s film industry, the brief states. Such a cost-benefits analysis would recognize that:

• “Many factors, in addition to financial incentives, influence the locational choice of a film project, including climate, suitable landscapes, availability of skilled labor and accessibility to a major airport. Discerning the impact of the financial incentives relative to the presence of the Hartsfield-Jackson Atlanta International Airport or the cooperating climate, for example, is not a trivial task.”

That said, this comment is nestled in the one-page conclusion:

• “The size and projected growth associated with this credit has prompted concerns about the sustainability of the program in Georgia, leading to calls for the program to be eliminated or … perhaps capped on an annual basis.
• “However, there are potential benefits that stem from increased employment and economic growth from this industry. Since the introduction of the film tax credit, direct employment I Georgia’s film and television production industry has outperformed that of the aggregate state economy.”