Louisiana’s Film Tax Credit Program To Continue, With A Cap
BATON ROUGE (AP) — Lawmakers reached a deal Friday to place a long-term spending cap on Louisiana's film tax credit program, which is both derided as wasteful and championed as an economic driver.
With a 33-2 vote, the Senate gave final passage to a compromise reached with industry representatives. A day earlier, the House voted 89-8 for the measure, which heads next to Gov. John Bel Edwards' desk.
The governor, whose administration helped craft the legislation, is expected to sign it.
The deal will continue a $180 million limit on the amount that taxpayers will spend each year on the tax credits doled out to film and TV productions. The cap was set to expire next year.
In addition, the state economic development department could only issue $150 million of those credits annually, in an effort to pay down a $280 million backlog of credits that producers haven't yet cashed into the state.
Incentives have been added to encourage more of a homegrown industry and to encourage productions to film outside the New Orleans area. The entire program will expire on July 1, 2025, unless lawmakers agree to renew it.
The tax breaks have been contentious in the legislature over the last decade as Louisiana has struggled with repeated financial problems but continued to spend tens of millions — sometimes hundreds of millions — annually on the tax breaks for Hollywood South.
Critics slam the program as a wasteful giveaway in a tight state budget, returning only pennies on the dollar to the state treasury.
Rep. Kevin Pearson, a Slidell Republican who voted against the bill, said he can't consider proposals to raise taxes to balance Louisiana's budget as long as the state keeps doling out millions in tax breaks to Hollywood.
"I can't vote for any tax when I see a situation like this," Pearson said. He added: "The return on investment is slim."
Supporters credit the program with bringing thousands of jobs and hundreds of millions in spending to the state.
"This has been good for the state. It's been good for our local economies. It's going to be even better now with the compromise," said Rep. Jean-Paul Coussan, a Lafayette Republican. "This is reining in a program that already has shown benefits to the state, and I believe it's going to show many more benefits in years to come."
Lawmakers praised industry leaders for negotiating on the legislation and agreeing to some limits on the spending.
"I've never been a big fan of the tax credit, but I will say this: I commend the industry for putting their five pounds of flesh on the table," said Rep. Barry Ivey, a Republican from Central.
Tax breaks on "The Green Lantern" cost the state $37 million. HBO's "True Detective" cost $14 million. And "The Twilight Saga: Breaking Dawn" cost $33 million, just to name a few on the long list of productions that have filmed in Louisiana under the generous subsidy program.
Meanwhile, a cottage market for reselling the tax credits to local taxpayers has blossomed.
– by AP Reporter Melinda Deslatte