Lessons from Connecticut

We could probably learn a lot of lessons from what we should and should not do from the successes and failures of our nearest neighbor, Connecticut. Although I am not sure we can yet learn anything from their experiences with movie-production tax credits, at least they have some data we might try and analyze.

Before I talk about the data, I feel it is necessary to point out that I really don’t like move-production tax credits. The reason for this is two fold. Firstly, it increases state debt/lost revenue. This is bad because this revenue is used to pay for schools, roads, police, healthcare and every other public service we take for granted. Without this tax revenue, we find ourselves in the current situation: no money in the state budget to pay for all the things we have come to expect and need. Lost your job? Too bad, no money for unemployment. Being robbed? Too bad, no money for police. Want to educate your teenager? Too bad, we closed URI, RIC and CCRI. You get the point. Now you can (and will) argue that tax credits bring jobs and increase local people’s business. This has yet to be seen but the small amount of revenue the average shmuck may earn from working on a TEMPORARY job with movie production is a joke. The money lost to pay for public services is significant. Let’s be honest, the people really making all the money from movie-production already have plenty of it.

The second reason I do not like these credits is because they are patently immoral. They are a legal bribe. I can’t go bribe a the zoning department to let me build in a wetland but the State can bribe a developer to come put in a shopping mall, big box, movie-studio, whatever. I have no problem with shopping malls, big boxes or movie studios. I like movies and cheap toasters. Really. I love to toast the crap out of things. But if you want to build any of these businesses, you should build them because the need is there, the location is good, the business model is sound and the financing exists. You should not build this stuff because you have nothing better to do with your time and will make lots of money in tax credits from the public. Yes, I realize that “everybody is doing it”. I know that every Town and every State has their own legalized bribery scheme in operation and if we don’t also have one, we lose out. And I know we would jump off a bridge if they did it too. We are stupid lemmings. Stupid, stupid, immoral lemmings. I know it but I don’t like it one bit.

Here’s the data. The New London Day, a true pillar of the journalistic arts, published a story last Sunday about movie-production credits in Connecticut entitled, “Enthusiasm, not evidence, backs up tax breaks for film producers”, by Ted Mann. Well, you can see where this is going. The data that is presented is that currently, $55 million in eligible movie-production dollars have been spent. Sadly, only $43 million stayed in Connecticut. Luckily, $20 million of new gross state product was produced. But at a 30% credit, the state actually incurred a debt of $16.5 million dollars (that piece of information is surprisingly lacking from the article). Effectively, private individuals/corporations in the state earned $43 million dollars but the state as a whole (the cop paying, garbage removing, road paving, healthcare providing part of the state) lost money. But somebody earned $43 million. Now you, reading this post: do you think it is remotely likely that you would have earned any of this money if you lived in Connecticut? Maybe? Here is a plausible scenario: suppose you owned a little restaurant where one of the movies was produced. Maybe you would have sold 100 more donuts. Wa-ho! Call your wife! It’s steaks tonight! And a week later, you would be no better off than before. Read Mr. Markham’s quote on my previous post and you further realize how ridiculously unlikely it is that there is much benefit for the locals. Remember when Richard Geer came to Rhode Island in February to shoot a movie? It was observed that the license plate on every single production vehicle was from OUT OF STATE! Mr. Markham seems justified in his concern that this is a losing proposition. Maybe Connecticut actually has a fully formed movie and television production infrastructure, it is apparent we do not. It is also apparent that any previous infrastructure that exists in Connecticut was developed without public tax credits. That’s called the impact of market forces, “see a need, fill a need” as a famous Disney character has been known to say. That same character did not say, “give out free money to get movie stars to come to our state”.

So what about the $20 million in new gross state product? That is a completely made up number. It is a guess, it is a fabrication. It has no basis in reality. It is the “enthusiasm” in Mr. Manns article. The figure could have easily been set at $10 million or $5 million or $150 million. However, $5 million doesn’t seem very substantial and no one would believe $150 million. $20 million is just a strategically appropriate number, designed to look good and believable.

So is there really any benefit to any of this? Is there any benefit to movie-production credits? Unless you own a company that rents movie trailers or stage lighting or camera cranes, probably not. Or unless selling 100 more donuts is going to set you up for life. This is just another example of large corporations making money at the expense of the public good. Large corporations getting larger while the state flounders. Yeah, yeah, yeah, I know you’re saying, “But Ishmael, Ronald Reagan says that money trickles down”. Well, Reagan’s dead, the country is a mess and all that has trickled down is the giant ball of rolling crap that speculators, banks and mortgage companies have so kindly delivered to us on a crap covered platter. There is plenty of the other kind of trickling going on in Providence. You know, evicted homeowners trickling urine into the streets because they don’t have a pot to piss in. How about they get a tax credit?

If you want to make a movie in Rhode Island, feel free to come and do it. We’re happy to have you. We’re nice, friendly New Englanders. But don’t steal from us while you’re at it. I am afraid to say that tax credits for movie-production amount to a ridiculously short-sighted flash-in-the-pan equivalent to corporate welfare. And you can take that to the bank (assuming they will finance your movie).

The only caveat here is that a movie studio (as opposed to a movie, which just films in the state for a few weeks) might actually bring some long term jobs and stability. But that depends on a lot of assumptions, including a sound business model, an actual need for services, some financing and a reputable developer. I have seen none of these when it comes to the fiasco over at Exit 2.

Your neighbor, Ishmael