State governments across the US provide tax dollars for various services like building roads, funding schools, and providing healthcare. In 38 states, tax dollars are also given to Hollywood to subsidize the making of movies and television, totaling over $25 billion in the past two decades. Despite the intention to boost local economies and create jobs, studies show that these film incentive programs are actually money losers for the states, with only a fraction of the investment returning to them.
Lawmakers continue to increase funding for Hollywood, as competition between states intensifies. Hollywood plays states against each other, leading to states sweetening their deals to attract productions. For example, New York increased its film incentive program by 67% to $700 million to compete with New Jersey, while Oklahoma went from $4 million to $30 million in three years to stay competitive with Texas. Texas then decided to spend nearly seven times that amount, further escalating the competition.
Despite the dubious economic benefits of these film incentive programs, the allure of exclusive parties, the promise of a cameo in a blockbuster movie, and the influence of Hollywood insiders lobbying politicians with campaign donations and perks help maintain and expand these programs. Even when communities benefit from visits by famous people and an influx of cash, states end up paying to subsidize those benefits. The pressure to offer a good deal to productions to prevent them from filming elsewhere drives the escalation of public funds invested in these programs.
In an ongoing investigation, the persistence of these film incentive programs is explored. The supercharging of these programs began around the turn of the century, with the premise that when producers choose to film in a state, the government reimburses them a portion of their costs as a thank you. Lawmakers argue that film and TV shoots create jobs for various crew members, leading to economic benefits for the state. However, studies and analyses have shown that the economic returns from these programs are minimal, with only a fraction of the investment actually benefiting the states.
The competition between states for Hollywood productions is illustrated in the case of Texas and Oklahoma, where Texas committed $200 million, prompting Oklahoma to push for additional millions for its own program. The escalation of funding for Hollywood from state governments continues, as states strive to offer more attractive incentives to keep productions within their borders. Despite the high cost and low returns on investment, states are caught in an arms race of offering increasingly lucrative deals to Hollywood, while more pressing needs for funding in areas like education and healthcare remain unmet.
