By Corey Friedman
North Carolina’s pristine beaches, majestic mountain views and quaint small-town streets are tailor-made for Hollywood. But by padding producers’ profits, the Tar Heel State pays a steep price to attract film and television companies.
State lawmakers approved an extra $60 million in film industry incentives on the final day of this year’s legislative session. A measure to extend tax breaks for another year was slipped into a technical corrections bill, which Gov. Bev Perdue signed into law on July 17.
Doling out tax incentives to coveted companies and pet projects is bad public policy because it gives some businesses a break at others’ expense. Instead of giving big discounts to the favored few, the state should reduce taxes for all businesses.
Defenders of the incentives game say tax breaks bring jobs. What they do, in fact, is subsidize the cost of doing business for some industries while penalizing others. What about the thousands of companies already operating here that employ millions of North Carolinians without special tax cuts?
North Carolina ramped up its incentive offerings in 2009, after Georgia lured a Disney project — “The Last Song,” starring Miley Cyrus —away from the Tar Heel State by sweetening the payoff pot. Between 2002 and 2009, the number of states offering film industry incentives soared from four to 44, according to the Raleigh-based John Locke Foundation.
But in the last three years, eight states have repealed or suspended tax breaks for the movie and television studios. For every dollar spent on incentives, recent studies show that just pennies return to state revenues.
Six feature films and three TV series are being filmed in North Carolina, according to the N.C. Film Office. Disney’s “The Odd Life of Timothy Green,” now in theaters, and “The Hunger Games,” a fantasy hit based on a bestselling young-adult book series, were shot here.
Film scouts scour the state for diverse locations, but most of the cameras are rolling in Wilmington. The port city is home to EUE/Screen Gems Studios, the largest film studio east of Hollywood. Screen Gems boasts 150,000 square feet of stage space where box office hits including “A Walk to Remember” and “Divine Secrets of the Ya-Ya Sisterhood” were filmed.
It’s not that we’re rooting against the film industry. In fact, we think our on-screen cameos are a feather in North Carolina’s cap. But we’d rather see producers choose our state for its natural beauty than for its government largesse.
“Before states began film tax incentives programs, North Carolina was a popular off-Hollywood destination for film crews,” the John Locke Foundation’s Jon Sanders said in a news release. “A right-to-work state with a pleasant climate and a range of natural features, North Carolina held significant advantages for moviemakers.”
Film and television can prosper here without special treatment. Let’s roll out the red carpet for all businesses by lowering taxes and reducing the regulatory burden.
[Ed. Note: This post origninally appeared in The Wilson Times.]
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